R. SAI BHARATHIversusJ. JAYALALITHA AND ORS.

                          R. SAi BH1}~.A THI                              A
                                   v.
                    J. JAY ALALITHA AND ORS.

                        NOVEMBER 24, 2003

   [S. RAJENDRA BABU AND P. VENKA TARAMA REDDI, JJ.]                      B

       Penal Code, 1860/Preventian of Corruption Act, 1288:::-Sections
 l 20B, 169 and 409/Sections l3(l)(c) and (d) and 13(2)-Prosecution
 under-Corporation-Owning Government Campanies-Ai;ticles of
Association of Corporation provided sale of the property only after C
approval fi·om Government-Property sold by Cmporation in publ(c
 interest by way of open tender-Purchased by the firm of the accused who
 was Chief Minister of the State and her associate-Code of conduct
 refraining the Ministers from buying such property-.Bid of the accused
 was highest and above the market value ascertained by the other two D
 accused-the Government Officials-Complaint against the accused alleging
 that ,the sale caused wrongful gain to the firms of accused and lvrongful
 loss to the Corporation-Conviction of accused u/ss.120-B and 409/PC
 and 13(l)(c) and (d) and 13(2) of the Act-Acquittal by High Court-On
 appeal, held: Property cannot be said to be under-sold causing loss to the E
 Corporation, the sale having been conducted by open tender, the bid being
 highest and above market value and the process of tender not having been
 vitiated-Offence u/s.120-B not established in the facts of the case-
 Section 3(J){d) not attracted because property was not purchased by
 accused by corrupt or illegal means for her pecuniary gain by discarding F
public interest-Section 3(J){c) not attracted as the accused did not act
dishonestly or fraudulently-Corpo~ation being a separate entity from the
 Government the property thereof ccmnot be said to be entrusted to the
 Government creating a trust a.~ the Government had no domination over
 it and dishonest disposal or conversion of property not having been G
established Section 409 not attracted-Offence u/s 169 also not made out
as purchase of the property in question was not prohibited by any statute
 but only by a Code of Conduct-Code of Conduct not having any statutory
force, not enforceable in Court of Law and the same having· only e.(hical
effect, cannot be construed to impose a legal prohibition-Accused H

                                   85
    86                 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A directed to return the property unconditionally in keeping with good ethical
    behaviour.

          State of Tamil Nadu formed Tamil Nadu Small Industries Cor-
    poration Ltd. (TANSI). The Memorandum of Association of the
B Corporation provided that Board could not dispose of the land
    transferred to the Corporation by the Government other than to the
  . State or Central Government or their Departments or Undertakings
    without prior written approval of the Government. A Code of Conduct
    for Ministers was brought into force which provided that a Minister
    shall refrain from buying from, or selling to, the Government any
C immovable property except where such property is compulsorily
    acquired by the Government in the usual course and refrain from
    starting, or joining, any business. After transfer of Government
    Industrial Units to the Corporation, some of the units started incurring
    losses. Government decided that the Corporation should close down
D the units and explore the possibility of disposing the properties.
    Pursuant to advertisement in Newspaper calling for tenders, a firm,
    of which accused-I the Chief Minister of the State and A-2 were the
    partners, offered for the tender. The bid of the firm of the accused I
    and 2 was the highest though much lower than the guideline value. It    •
E was marginally higher than the value fixed by the Collector and
    Commissioner of Land Administration. Since the Corporation had
    already decided to sell land of the same unit to another Company at
    the price lower than as bid by th.e firm of accused, the bid was
    considered reasonable and Board recommended for the sale to the firm
    of accused to the Government. Government approved the sale.
F
         A complaint was lodged. Charges were framed u/ss. 1208, 169
    and 409 IPC and u/ss. 13(1)(c) and (d) and 13(2) of Prevention of
    Corruption Act on the ground that the property in question was
    deliberately sold for less value with a view to confer pecuniary
G   advantage to the firm of A-I and A-2 which resulted in wrongful loss
    to the Government and wrongful gain to A-1 and A-2.

          Trial Court convicted the accused u/ss. 120-B and 409 IPC and
    u/s.13(2) r/w. Section l3(1)(c) and (d) of Prevention of Corruption Act.

H        In appeal High Court acquitted all the accused. Hence the present
                R. S. BHARA THI v. J. JA YALALITHA                    87

appeals and Special Leave Petition.                                         A
     Dismissing the appeals and Special Leave Petition, the Court

     HELD : 1.t. In view of the failure of the prosecution to show the
guideline value and in view of the positive evidence as .brought out
through valuation given by the Collector and Commissioner of Land B
Administration the land of TANSI Foundry unit could be relied upon
particularly when the sale was by way of open tender, it cannot be said
beyond reasonable doubt that the property in question had been
under-sold and thus there was loss to TANSI. (104-G-HI
                                                                            c
     t.2. The scheme of the Stamp Act (as amended by T.N. Act 24 of
1967) and Tamil Nadu Stamp (Prevention of Undervaluation of
Instruments) Rules, 1968 is not sacrosanct, but only a factor to be
taken note of if at all available in respect of an area in which the
property transferred lies. In any event, therefore, if for the purpose of D
Stamp Act guideline value alone is not a factor to determine the value
of property, its worth will not be any higher in the coniext of assessing
the true market value of properties in question to ascertain whether
the transaction has resulted in any offence so as to give a pecuniary
advantage to one party or the other. (109-A-C]
                                                                            E
      1.3. The approach of the High Court in ascertaining the true value
of the land on the basis of the offer of the firm of A-1 and A-2 in the
tender process and the value fixed in respect of the land sold to another
Company cannot be said to be irrelevant or perverse. The tender
process by the T ANSI not being shown to be or demonstrated to be           p
vitiated is a transparent and good piece of evidence to indicate the real
price of the properties in question. The adoption of the value as
Guideline Value will have to be in terms of Tamil Nadu Stamp Act &nd
not de hors the same. (109-C-E]
                                                                            .~
     2. As regards the offence under Section 120-B IPC the manner '-'
of conspiracy is not established. How there have been meeting of the
minds of different accused at different stages and what the common
design has been, is not clear. Even if it is assumed that some of the
officers of the Government were circumspect in their attitude having
come to the conclusion that A-I was interested in purchase of the H
      88                SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R.

 A properties and have put their seal to such act either tacitly or over
      zealously by being too expressive of the same, it cannot be held that
      there was a concpiracy amongst various persons. There is no link to
      show that the conspirators agreed to have the property sold or the
      property purchased at a lesser price so as to cause wrongful loss or
. B   wrongful gain_ or to enable A-1 and A-2 to obtain the property at a
      price less than its value. [110-E-F)

           3.1. The circumstances under which the properties were pur-
      chased by the firms of A-1 and A-2 cannot be treated as one obtained
      in the circumstances arising in Section 13{1)(d) of the Prevention of
 C    Corruption Act. The facts established in the case point out that the
      properties are not purchased by C!}rrupt or illegal means or by abusing
      th~ official_ position as public servant to obtain pecuniary advantage
      discarding public interest. The purchase was effected through open
      sales held by T ANSI. The right to sell the properties in question was
 D    available with the. Corporation which chose to do so in favour of the
      firms A-1 and A-2. If the properties in question were sold by TANSI
      in public interest, the obtaining of the same through purchase in such
      a transaction for valuable consideration which does not fall below
      market value does not come within the scope of Section 13(l)(d). Thus,
 E    the charge under Section 13(1)(d) is not established. [113-D-H; 114-AJ

           3.2. Offence under Section 13(l)(c) of the Prevention of Corruption
      Act would arise if any public servant dishonestly or fraudulently
      misappropriated or otherwise converted for his own use any property
      entrusted to him or under his control as a public servant or allowed
 F    any other person to do so. In the present case, it cannot be said that
      the accused acted dishonestly because there was no wrongful gain or
      wrongful loss and hence it cannot be said that they acted fraudulently.
      It cannot also be said that the accused has converted the property of
      T ANSI inasmuch as property was sold pursuant to a transparent
 G    tender process which is not shown to be vitiated in any manner. The
      property in question to T ANSI a Government Company and it was
      neither trust property nor was it entrusted to or under the control of
      the Chief Minister or any Minister. Hence, Section 13(l)(c) of the
      Prevention of Corruption Act is not attracted to the facts of the case.

 H                                                                 (114-B-DJ
             .• R. S. BHAR)\THI v. J. JAYALALITHA                   89
     3.3. There was no- evidence to show that A-3 Chairman-cum- A
Managing Direct<>r of T ANSI acted against the decision to favour the
firm of A-1 and A-2. The sale of land to the firm is a collective decision
of the Board and not of any individual, the price on which the land
was to be sold and the price on which the buildings were to be sold
were decided by the Board of Directo~s to which the Government gave B
approval and thus there was no independent assignment to A-3 in
deciding the matter nor did he suppress any document by not placing
them before the Board of Directors.

     3.4. A-5, Special Deputy Collector (Stamps), only performed
statutory duty in fixing the value of the property in question after C
notice to the concerned parties. The matter was statutorily referred to
A-5 for fixing the market value of the property and thereafter A-5 fixed
the market value of the property after taking into consideration the
relevant factors. Therefore, A-5 cannot be attributed with any
misconduct. (115-B-C; 116-HJ                                             D
     4.1. The properties in question belongs to TANSI, a corporation
which is a separate and distinct entity from the Government and the
properties are held by it as owner and has complete control over the
same except when the said properties are to be alienated, approval of E
the Government has to be obtained as provided under the Articles of
Association of the said Corporation. In a case of this nature, where
there is no dominion over the properties by a Chief Minister or a
Minister it cannot be treated as entrustment of the properties creating
a trust which is an obligation annexed to the ownership of the
properties and arises out of the confidence reposed and accepted by F
the owner. Indeed there is no material in the whole case to come to
the conclusion that any such trust has been or deemed to have been
created in respect of the said properties and that the relationship
between A-1 and TANSI is one of trustee and beneficiary. (125-A-DJ
                                                                         G
      4.2. The ingredients of Section 409 IPC are not attracted to the
present case at al!. There is absolutely no entrustment of the properties
in any manner, which allows a dominion over it except approving or
disapproving, an act on the part of the Corporation either to sell or
to alienate the properties. It cannot be said that a public servant who H
    90                 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.
                                                                                         ..
A   holds a particular portfolio and has an element of supervisory control         ;..


    in certain matters, has a dominion over the property so as to exercise
    any legal incidents ~!tached to the right of ownership. Therefore, there.
    was no entrustm~nf of the said properties and it cannot be said that
    A-1 had dominion over the said properties either as the Chief Minister
B   or as the Minister of Industries a.nd in ariy case, the evidence does not
    establish the ingredient of dishonest disposal or conversion of property
    for personal use. [125-D-F]

           5.1. On a plain reading of Section 169 IPC and seeking the
    assurance from the marginal heading as well, it is fairly clear that
C   prohibition should flow from a law. Such law in the context of Section
    169 IPC should mean that the law as ordinarily understood, that is to                     .,
                                                                                               '
    say, an enacted law or a rule or regulation framed under such law but
    not an executive order which confers no rights on anybody nor sets
    down legally enforceable obligations. The rules and administrative
D   instructions governing the public servants holding the civil post have
    undisputedly no application in this case. The law, which is pointed out,
    is tfle Code of Conduct for Ministers by the Government ofTamilnadu.
    A perusal of the Code would indicate that they lay down guidelines or
    norms of conduct which the Minister must observe... The rules also
E   prescribe the authority who should ensure compliance with the Code
    and to whom various statements have to be furnished. The procedure
    to be followed is left to the discretion of that authority in case of breach
    of the Code. That authority is the Chief Minister. (121-H; 122-A-D)

         5.2. The Code of Conduct not having a statutory force and not
F enforceable in a Court of law, nor having any sanction or procedure
    for dealing with a contravention thereof by the Chief Minister, cannot
    be construed to impose a legal prohibition against the purchase of
    property of the Government so as to· give rise to a criminal offence
    under Section 169 IPC. In law, there must be a specific provision
G   prohibiting an act to make it illegal. A Code of Conduct prescribed by
    the Government under certain 11otification by itself cannot be elevated
    to the level of law. [122-E-F]

         5.3. Even if the Government order is traced to have been
H   issued under executive power of the State under Article 162 of the
                 R. S. BHARA THI v. J. JAYALALITHA                     91

  Constitution of India, such a Code will not be enforceable when the A
  language used is not in mandatory terms and they are intended to be
  mere guidelines or instructions to the concerned persons in authority.
  Therefore, as long as such a Code of Conduct is not enforceable in any
  court of law and does not even provide what action could possibly be ·
  taken in case of breach by the Chief Minister, the prohibition contained B
  therein is only having ethical or moral effect and any breach thereof
. cannot be treated to be unlawful or even illegal within the meaning of
  _Section 43 IPC. To constitute a ground for civil action under Section
  43, there must be a right in a party which can be enforced. It may be
  a breach of contract or a claim for damages or some such similar right C
  accruing under any law. There is no law which debars the Chief
  Minister from participating in a sale conducted by any Department of
  the Government or any of the Corporations or any public sector
  undertaking affording a cause for civil action especially when no fraud
  or illegal gain is involved. Therefore, the offence under the aforesaid
   provision has not been established. In fact, there is nothing in the D
  charge to indicate nor did the prosecution take a specific stand at any
  stage of the trial that the purchase of T ANSI foundry property by
  A-1 from the Government would furnish a ground for a particular civil
  action. The nature of civil action that could be initiated cannot be left
  to the guess work and the accused cannot be expected to meet such case E
  at this stage. [123-G-H; 124-A-DJ

      5.4. That A-1 was a public servant and the properties were
 purchased by the firm in which she was a partner, would be insufficient
 to establish a charge under Section 169 against her as the main
 ingredifnt of the aforesaid provision is not established. [124-G)       F
       5.5. In the present case, in view of the fact that Government
 headed by A-1 has to give permission in respect of the sale of property
 of these two companies, it certainly exercises powers over the same and
 thus there is conflict of interest. Where there is conflict of interest law G
 has always avoided such sales being effected in favour of those who can
 jeopardise the fair outcome of the transaction. Persons in public life,
 who are gentlemen, follow such Code instead of taking escape routes by
 resorting to technical pleas as arise in criminal cases. Persons in public
 life are expected to maintain very high standards of probity and, H
    92                   SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R.

A   particularly, when ·there is likely to be even least bit of conflict of
    interest between the office one holds and the acts to be done by such
    person, ought to desist himself from indulging in the same. Good ethical
    behaviour on the part of those who are in po\ver is the hallmark of a
    good administration and people in public life must perform their duties
B   in a spirit of public service rather than by assuming power to indulge
    in callous cupidity regardless of self-imposed discipline. A-1 must atone
    for the same by answering her conscience not only by returning the
    property to T ANSI unconditionally but also ponder over whether she
    had done .the right thing in breaching the spirit of the Code of Conduct
C   and giving rise to suspicion that rules and procedures were bent to
    acquire the public property for personal benefit, though trite to say that
    suspicion however strong cannot take place of legal proof in a criminal
    case and take steps to expiate herself. 1127-F-H; 128-A-D]

D        CRIMINAL APPELLATE JURISDICTION : Criminal Appeal Nos.
    115-120 and 121-127 of 2002.

         From the Judgment and Order dated 4.12.2001 of the Madras High
    Court in Crl. A. Nos. 969, 970, 971, 978, 988, 1169 and 972, 973, 974,
    977, 981, 987 and 1168 of 2000.
E
                                     WITH

         S.L.P. (Crl.) No. 477 of 2002.

         T.R. Andhyarujina, N. Nnatarajan, R. Mohan, V.G. Pragasam, Elango,
F Sunder Mohan, Dr. Subramanian Swamy-in-person and Ms. Roxna Swamy
    for the Appellant.

         Altaf Ahmed, Additional Solicitor General, K.K. Venugopal, V.A.
    Bode, Ranjit Kumar, K.V. Viswanathan, K.V. Venkataraman, N. Jothi, B.
G   Raghunath, Ajit Mohan Singh, A.K. Sinha, Ms. Seema Bengani, K.V.
    Vijaykumar, A.T.M. Sampath, V. Balaji, C. Manishankar, P. Venugopal,
    P.S. Sudheer, C.S. Kiran, P.N. Ramalingam, Ms. N. Annapoorani, Raj
    Sekhar, Pillai, C.S.S. Pillai and Rajnish Pathiyil for the Respondents.

H        The Judgment of the Court was delivered by
    R. S. BHARATHI v. J. JAYALALITHA [RAJENDRA BABU, J.] 93

      RAJENDRA BABU, J. These two sets of criminal appeals arise out A
of two criminal cases filed against Respondents Nos. I to 6 an'd the fall
out thereof unfolding against currents and cross currents of political
vicissitudes. Facts leading to these appeals are as under:

        The Government of Tamil Nadu formed a Tamil Nadu Small B
Industries Corporation Limited (for short 'TANSI'). It was registered
under the Companies Act, 1956 as a Government Company. The entire
shares, namely, 100% of the shares of the said Corporation, were held by
the government. In the Memorandum of As~ociation it is stated that the
said company is formed 'to take over .ft-om the Government of Tamil Nadu
any oftheir production and/or servicing units with the rights and liabilities C
of the Government of Tamil Nadu so far as they relate to such units'.
Article 72 of Articles of Association empowers the Government to appoint
all the Directors with the power to remove any Director from time to time.
Article 79 empowers the Government to appoint and remove the Managing
Director. Similarly Government can also appoint a Chairman and Vice- D
Chairman of the Board. The Chairman can reserve for the approval of the
Government any proposals or decisions of the Board in respect of any of
the matters r~garding (a) increase or reduction of the capital of the
Company; (b) loan granted by the Company or giving of a guarantee or
any other financial assistance to any person or concern; (c) winding up E
of the Company; and (d) any other matter which in the opinion of the
Chairman be of such importance as to be reserved for the approval of the
Government. In respect of any proposal or decision of the Board reserved
for the approval of the Government no action shall be taken by the
Company until approval to the same has been obtained. The Government
also exercises the power to issue directives or instructions as it may deem F
fit in regard to finances and the conduct of the business and affairs of the
Company and the Directors shall duly comply with and give effect to such
directives or instructions. T ANSI has I 0 Directors and all of them were
the nominees of the Government of Tamil Nadu; including the Chairman-
cum-Managi11g Director who was an IAS officer.                                G
        Article 77-a(4) provides that the Board shall not dispose of the land
transferred to the Company by the Government other than to Tamil Nadu
Government Departments/Undertakings/Boards or Government of India
Depa1tments/Unde1takings/Board without the previous written approval of H
    94                     SUPREME COURT REPORT$ [2003] SUPP. 6 S.C.R.
A the Government. A Code of Conduct for Ministers was brought into force
    by G.O.Ms, Nos. 1350 on June 16, 1968 which was revised from time to
    time and clause 2(b) thereto provides that 'a Minister shall refrain fiwn
    buying from, or_sel!i11g to, the Government any immovable property except
    where such property is compulsorily acquired by the GoverlJment in the
B   usuq/ co~~se and refrain fi·om starting, or joining, any business'. After the
    form.ation ~(TANSI Corporation and transfer of Government Industrial
    lJn,its to it, sonie of the. units sta1ted incurring losses. Therefore a report
                  ,!
    was sent by ;\NSI to the Government to the effect that some of the
    industri.a(units are consistently incurring losses. On 30th September, 1985
    the Oo~ernme~t decided that eight units mentioned in the G.O.Ms. 832 can
                       0




C   ne~~r be ~~de vi~ble whatever measures to be adopted to achieve the
    objects for which they were set up in the· public sector and therefore their
    continuance will cause a drain on the finance ofTANSI. TANSI Enamelled
    Wires, Guindy and TANSI Foundry, Gufody, situate in Thiru.vi.ka.lndustrial
    Estate were two of the units among .~he eight identi.fied as the units
D   incurring losses mentioned in the said G.O. Therefqre, the Government
    decided that TANSI should close down the 8 units and explore the
    possibility of disposing the properties by inviting offers through
    advertisements in newspapers.

E         In pursuance of the G.O., Ex.P-21, TANS I Foundry unit was officially
    close as per Ex.P.-33. Out of the total extent of 5.535 acres of land ~nd
    3267 sq.rots. of buildings in TANSI Foundry, an extent of0.545 acres.of
    land and 569 sq.rots. ofbuilding wete transferred to Tamil Nadu.Corporatio~
    for Development of Women on 15.5.1987 by TANSI after collecting Rs.
     12.21 lakhs. Advertisements were issued on 31.8.1988 for disposal of th~
F   remaining extent of land and building and four offers were received. Th~
    offers of Ashwini Plastic and ENCOFED were recommended to tl;te
    Government after the approval of the Board, but the Government did not
    give approval on the ground that it will be more advantageous to TANSI
    to call for fresh tenders after parcelling out the land into industrial plo}s
G   in accordance with the Madras Metropolitan Development Authority rules
    and regulations. On 30.4.1990 Jaya Publications, an unregistered partnership
    firm in which J.Jayalalitha, Accused No. l, and Sasikala, Accused No. 2,
    were partners, purchased land adjacent to the TANSI property in dispute · · ·
    from Hitex Equipment company vide sale deed, Ex.P.-57, at the assessed
H   market value of Rs. 6 lakhs per ground which is at par with the guideline
    R. S. SHARATHI v. J. JAYALALITHA [RAJENDRA BABU, J.] 95

value of Registration Department. In the general elections held on 13.5.1991 A
for the Tamil Nadu Legislative Assembly AIADMK party came to power
and J.Jayalalitha, accused No'. I, became the Chief Minister. On 29.9. I 991
Jaya Publications again purchased another adjacent land from Idhayam
Publications vide sale deed (Ex.P-8) at the assessed market value of Rs.
7 .32 lakhs per ground [270 sq. yards]. On I 0. 10.199 I an advertisement was B
published for disposal of TANS! Enamelled Wire Units adjacent to the
T ANSI Foundry in the Thiru.vi.ka.Industrial Estate. Pursuant to this
advertisement R.R. Industries and two other companies submitted tenders
for purchase. Ex.P-22 is the quotation given by R.R. Industries. The price
of one square meter of land had been mentioned in that qu~tation as Rs. C
1850, which works out to Rs. 4.12 lakh per ground.

     \On I 4. I 0.1991 a meeting was held under the chairmanship of the
Chief Minister J. Jayalalitha for the review of the performance of the
T ANSI and A-4 Minister for Rural Industries, A-3 Chairman-cum-Managing
Director ofTANSI, P.W. l I Chief Secretary, P.W. 14 Secretary Industries D
Department and P.W. 16 Secretary, Finance Department attended the said
meeting and several decisions were taken for the revival of T ANSI. One
of the decisions taken at the meeting is that TANSI may sell the properties
of its unit which are defunct and T ANSI Foundry unit was identified as
a defunct unit and the estimated sale price was fixed at Rs. I .5 crore, but E
without any land valuation report on record. It was also decided· that
T ANSI must identify more such properties for sale and can send a proposal
to the Government. along with all details and topography sketches
recommending the sale and that the vacant sites available for the running
units can be plotted out into industrial lots for selling them at market value
with a view to raise some resources. On 6.11.1991 Government directed F
al 1 public sector undertakings to obtain prior approval of the Government
in respect of all tenders for works, equipment, etc. and all purchases
whether by open tender or by limited tender enquiries etc. where the value
of the contract exceeds Rs. 1 crore. It also directed that the proposals
should be sent with the recommendation of the Board to the Administrative G
Department concerned and that Administrative Department may follow
circuit procedures to circulate the file to concerned Minister, Minister for
Finance and Chief Minister.

      The Board of Directors of TANSI resolved to constitute a H
    96                 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A Sub-Committee consisting of the Directors for evaluating the offers
    received in respect ofT ANSI Enamelled Wires pursuant to the advertisement       ...
    issued on I 0.10.1991 and to make recommendations for the disposal of the
    assets of the closed units of TANS!. The members of the Sub-Committee
    appointed by the Board were Chairman-cum-Managing Director ofT ANSI,
B   who is also the Director of TANSI, Abdul Hasan, the Director of TANSI
    and Joint Secretary, Industries Department, and C. Madakkannu, Chief
    Engineer (Buildings), PWD, who is also the Director of TANSI.
    Advertisements were caused to be published in leading newspapers on
    21.11.1991 calling for offers through tenders for the purchase of the
    property of TANSI Foundry. A letter was addressed by the Managing
C   Director (A-3) to the Sub-Registrar, Adayar (P.W. 1) intimating that they
    want to dispose of land in Thiru. Vi.Ka.Industrial Estate and requesting to
    furnish the guidelines price of the lands situate in Block No. 5 at Alandur.
    Sub-Registrar, Adayar replied (Ex.D-39) that there was no guideline value
    for survey numbers 86, 87, 88, 90, 91 Part, 92 Part and 93 Part, in Block
D   No. 5 of Adayar Viilage which are the properties in dispute. He further
    stated that in the adjoining property in Block No. 6 ofThiru.vi.ka.Industrial
    Estate, the value of one sq.feet was Rs. 305, which worked out to Rs. 7.32
    lakhs per ground. It is important to note that Block Nos. 1 to 6 of Adayar
    village are situated in Thiru.vi.ka.Industrial Estate. The Sub-Committee of
E   TANSI met on 25.11.1991 to consider the offers for the disposal of T ANSI
    Enamelled Wires Unit for which an advertisement was published on
    10.10.1991.The tender given by R.R. Industries and other two tenders
    given by other companies were placed before the Sub-Committee and it
    passed a resolution calling for a report regarding the guideline price ·of the
F   land and a report from the Public Works Department regarding the value
    of the buildings. After consideration of all the offers the Sub-Committee
    decided that TANSI may ti)'"again-for better offer by giving advertisements.
    Again advertisements were published on 21.11.1991 and 22.11.1991
    calling for tenders for purchase of the property of TANSI Foundry, four
    tenders were received at the TANSI office and they were opened in the
G   presence of all the tenders on the same day. Ex.P-29 is the offer of Jaya
    Publications in which J. Jayalalitha, A-1 and Sasikala, A-2 are partners.
    Ex. P-13 is the offer of Aban Constructions and Ex. D-15 is the offer of
    ENCOFED. Tamil Nadu Small Industries Development Corporation
    (SIDCO) also submitted a tender. Jaya Publications offered to purchase
H   the entire land at the rate of Rs. 3.0 I lakhs per ground. Aban Constructions
           R. S. BHARATHI v. J. JAY ALALITHA [RAJENDRA BABU, J.] 97
J.-;

       offered to purchase the landed prope11y at the rate of Rs. I, 77,325 per A
       ground, but it offered to purchase only 1.72 acres and not the entire
       property. ENCOFED offered to purchase 2000 sq.mts of land at rate of
       Rs. 1,33,333 per ground while SIDCO offered to purchase the land at Rs.
       502 per sq.mt.

             All the offers were placed before the Sub-Committee for consideration
                                                                                  B
       and it decided that A-3 who is the Chairman-cum-Managing Director,
       T ANSI, should negotiate with Jaya Publications since the offer of Jaya
       Publications was Rs. l,82,13,l50 which is the highest of all the four bids
       and they should take up the matter with the Board by a note in circulation
       for a decision regarding the disposal of the property. Ex. P-30 are the C
       Minutes of the meeting of the Sub-Committee and the same were initiated
       by P.W. 8 and A-3. The Board considered the matter and it was noticed
       that the value offered for the land by the highest bidder was Rs. 1,62,93, 150
       which worked out to Rs. 3.01 lakhs and that though it was much lower
       than Rs. 7.30 lakhs which was the guideline value for Block No. 6 of D
       Thiru.vi.ka.Industrial Estate, it was marginally higher than the value fixed
       by the Collector under Ex.D-20 as the Collector had fixed the price per
       ground for the property at Rs. 3 lakhs. The note further indicated that
       T ANSI had already decided to sell 2.52 acres of land of the same unit to
       Tamil Nadu Sugar Federation at Rs. 3 lakhs per ground and, therefore, the E
       price of Rs. 3.01 lakhs offered by Jaya Publications could be considered
       reasonable. It was also taken into consideration that Rs. 19.20 lakhs was
       offered by the highest bidder for the building and that heavy structures
       available at TANSI Foundry may be useful for a heavy engineering
       workshop and for a buyer who does not intend to put up a heavy
       engineering workshop, the value is only notional and at best is only a scrap F
       value. Therefore, members of the Board recommended to the Government
       selling a portion of the land of about 2.98 acres at the rate of Rs. 1,350
       per sq.mt., that is, Rs. 3.01 lakhs per ground, and that the exact extent of
       the land to be sold could be measured at the time of handing over and the
       exact amount could be collected and the building measuring 2698 sq. mts. G
       could be sold at a cost of Rs. 19,20,200. The resolution was unanimously
       adopted and signed by the Managing Director and other seven Directors.
       A proposal was sent to the Government on 30.12.1991 and the proposal
       of T ANSI was examined by the Government. There were certain notings
       made therein that the rate of 3 lakhs per ground was much lower than the H
    98                  SUPREME COURT REPORT~· [2003] SUPP. 6 S.C.R.

A guideline value of Rs. 7.30 lakhs per ground ;is mentioned by Registration
    Depatiment. Further, the file was marked to 'Minister (Rural Industries)',
    'Minister for Finance' and 'ChiefMinister'. It is stated that the markings
    to other Ministers were cancelled by the Minister (Rt11•al ·Industries). The
    Minister for Finance approved the proposal on 14:1.1992. · By G.O: Ms.
B   No. 18 issued on 20.1.1992 the·Governrrient approved the sale of TANS!
    Foundry property to Jaya- Publications,,i~ faya Publications,- in turn, :was
    informed of the decision ofthe Government by Ex. ·P!36 with whichia draft
    sale agreement for getting N.O.<'.:! !from the Income Tax Depa1tment/Was
    enclosed. An agreement- for sale •was entered'into between ..TANSf and
c   Jaya Publications, on "4.3: 1992. and' ·the r~aid -doclill'ient"WilS ·registered
    conditionally because·thevalue·ofthe<lahdand buildirig.wa5 less than the
    market value and guideline value.        Board of Directors of TANSI took
    note of the fact that the actual extent of land sold was 3 .0786 acres when
    it was measured.

D          Under Section 47-A of the Indian Stamp Act(as in force in Tamil
    Nadu), Sub-Registrar, Adayar, P. W.1, referred to the Special Deputy
    Collector (Stamps) - A-5 - for fixing the market value of the TANS!
    Foundry land by his proceedings Ex. P-3 as the value was less .. By
    proceedings dated 7.12.1992, Ex.P.-6, he fixed Rs; 3.00 lakhs per ground
E   as the market value for the TANS I Foundry iand. In Writ Petition No. 472
    of 1993 in the High Court of Madras relief is sought for setting aside the
    sale deeds executed in favour of Jaya Publications and Sasi Enterprises on
    the ground that the sale deeds are invalid documents and for resumption
    of land by the Government. We are not concerned with this writ petition
    in these proceedings.
F
            A private complaint was lodged before the IX Metropolitan Magistrate
    Court, Saidapet, seeking to punish J. Jayalalitha, respondent No. I herein,
    for offence under Section 169 IPC for having purchased Government.land
    in violation of Code of Conduct for Ministers. In view of several
G   complaints and on the basis _of media reports, the Government referred the
    matter to C.B.C.I.D. on which a crime came to be registered in crime No.
    17 of 1996 Ex. P-75 is the First Information Report in the s~id .crime.
    Investigation was taken up by P.W.27 and two cases were ~egister~~ as
    Special C.C. No. 4 of 1997 _and Special C.C. No. 13 .of 1997 against the
H   respondents.
   R. S. BHARA THI v. J. JA YALALITHA (RAJENDRA BABU, J.] 99

         A-1 was charged under Section I 20-B IPC, Section I 3(2) read with A      ,
Section I 3(1 )(c) & 13(1 )(d) of the Prevention of Corruption Act, and
Sections 409, 169 and 420 read with Section 34 IPC. A-2 was charged
under Section I 20-B IPC, Sections 13(2) read with Section 13( I)( c) and
(d) of the Prevention of Corruption Act read with Section 109 IPC, under
Sections 409 read with 109 IPC, 169 read with 109 IPC and 420 read with B
34 IPC. A-3 was charged under Section 120-B !PC, Section 13(2) read
with 13( 1)(d) of the .Prevention of Corruption Act, Section 119 IPC read
with Section 13(2) read with 13( I)(d) of the Prevention of Corruption Act,
and under Sections 169 read with 109, 420 and 409 IPC. A-4 and A-5
were charged under ,Section 120-B IPC, under Section 13(2) read with
13( l )(d) of the Prevention of Corruption Act, under Section 119 IPC read C
with Section 13(2) read with 13(1)(d) of the Prevention of Corruption Act,
and under Section 169 read with Section 109 !PC. A-6 was charged under
Section 120-B IPC, under Section 119 read with 13(2) read with 13(1 )(d)
of the Prevention of Corruption Act and under Section 13(2) read with
 13(l)(d) read with 109 lPC.                                                D
         The Trial Judge convicted A-1 under Section 120-B read with 13(2)
read with 13 ( l )(c) and ( d) of the Prevention of Corruption Act He also
convicted A-1 under Sections 13(2) read with 13(l)C) and 13(2) read with
13( l )(d) of the Prevention of Corruption Act and under Section 409 IPC E
and for each charge, A-1 was directed to suffer rigorous imprisonment for
a period of three years and to pay a fme of Rs. l 0,000 with the direction
that in default of payment of fine, A-1 will suffer simple imprisonment
for three months. Similarly, the trial Judge convicted A-2 under Sections
120-B IPC read with 13(2) read with 13(l)(c) and (d) of the Prevention
of Corruption Act, under Sections 13(2) read with 13( l )(c) of the Prevention F
of Corruption Act read with l 09 IPC, under Sections 13(2) read with
13( 1)(d) of the Prevention of Corruption Act read with l 09 IPC and under
Section 409 read with l 09 IPC. A-3 to A-5 were convicted under Sections
120-B IPC read with 13(2) read with 13(1 )(c) and (d) of the Prevention
of Corruption Act and under Sections 13(2) read with Section 13(1)(d) of G
the Prevention of Corruption Act and each of them was sentenced to suffer
rigorous imprisonment for a period of three years and to pay a fine of
Rs. 10,000 in default of which each of them was directed to suffer simple
imprisonment for three months for each charge. A-6 was convicted under
Sections 120-B IPC read with 13(2) read with 13(l)(c) and (d) of the H
       100                SUPREME COURT .REPORTS [2003] SUPP. 6 S.C.R.
\..: A Prevention of Corruption Act and he was sentehced to suffer rigorous
       imprisonment for three years and to pay a fine of Rs. 10,000 with a default     -· ·
       sentence of simple imprisonment for three months. The learned trial Judge
       further directed that the sentences imposed upon the accused will run
       concurrently. A-1 was acquitted of the charge framed under Section 420
  B    IPC and also the charge under Section 169 IPC. A-2 was acquitted of the
       charges framed under Section 169 read with l 09 IPC and 420 read with
       34 IPC. A-3 was acquitted under Sections 119 IPC read with 13(2) read
       with 13(l)(d) of the Prevention of Corruption Act and under Sections 169
       read with I 09 IPC, 420 IPC and 409 IPC. A-4 and A-5 were acquitted
       of the charges framed under Sections 119 IPC read with 13(2) read with
  C    13(1)(d) ofthe Prevention of Corruption Act and Sections 169 read with
       I 09 IPC. A-4 is stated to have died subsequent to the disposal of the appeal
       in the High Court and before these proceedings were filed in this Court.
       A-6 was acquitted of the charges under Sections 119 IPC read with 13(2)
       read with 13(1)(d) ofthe Prevention of Corruption Act and under Sections
  D    13(2) read with 13(l)(d) of the Prevention ofConuption Act and 109 IPC.
       The charge Ul)der Section 420 IPC was dropped in view of the concession
       made on behalf of the State of Tamil Nadu in Criminal Appeal Nos. 395-
       397 of 2000 decided by this Court on 25.4.2002 and reported in 2000(4)
       sec 444.
   E
             The accused preferred Cr!. Appeal Nos. 972, 973, 974, 977, 981 and
       987 of 2000 before the High Court. The High Court by a judgment
       pronounced on 4.12.200 I allowed Criminal Appeals by acquitting all the
       accused and dismissing the State appeal.

   F         Summary of the Findings of the High Court are as follows:

       1.    There is no evidence to indicate that the Guideline Value had been
             fixed fo respect of the property in question. In fact, the witn.esses
             admitted that there was no guideline value for this property.
  G
       2.    The charge framed by the Trial Court is based on the Guideline Value
             and it is··not permissible to proceed on the basis of market value as
             the two concepts are different and, therefore, the procedure adopted
             by the Trial Court preju~iees the accused. Prosecution has not
  H          established that market value of the land sold to firms ofrespondents
                R. S. BHARATHI v. J. JAYALALITHA [RAJENDRA BABU, J.] 101
...I -1
                 Nos. 1 and 2 is Rs. 7.32 lakhs or more than the price fetched.            A
          ,.,
          J.     The properties were sold by tender process after due publicity in
                 newspapers and the highest bid has been accepted. Hence the price
                 offered and accepted cannot result in wrongful loss to one party and
                 gain to another party in the absence of any vitiating circumstances.
                                                                                           B
          4.     The Guideline Value not having been established acceptance of Rs.3
                 lakhs per ground is reasonable on the basis of the evidence on record,
                 particularly in view of the offer accepted pursuant to the tender
                 process. Thus there is no wrongful loss to one party or gain to another
                 party.                                                                    c
          5.     Price paid for small extents of land or additional stamp duty claimed
                 on that basis are paid without demur cannot fonn a test for fixing the
                 market value of the land in question.

          6.     The value mentioned in Ex. P.5 for the building or the super-structure D
                 ought to have been taken into consideration by the Trial Court as the
                 same contained the necessary details and though it is stated that
                 Exs. P.58 and P.59 were prepared after ascertaining relevant details,
                 no material was placed in support of the same before the court and,
                 therefore, it could not be said that the properties had been purchased E
                 at a lesser value than what is just.

          7.     The sale effected by TANSI Enamelled Wires to Mis Sasi Enterprises
                 is not vitiated. The Sub-Committee rejected the offer of Mis.
                 R.R. Industries of Rs. 4.12 lakhs on the 'basis of guideline value. It
                                                                                        F
                 is only much later the Sub-Committee realised from Ex. D-39, letter
                 of the Sub-Registrar, that the subject matter of sale therein is only
                 of an extent of 240 sq. feet and is in respect of a small shed. There
                 are other teasons also to reject the offer of R.R. Industries.

          8.     The charge of conspiracy could not be established as the properties G
                 in question were not purchased at a price lower than the Guideline
                 or market value nor is there any independent material to conclude that
                 there. is any conspiracy to commit offences charged herein.

          9.     There is no link established to show that there is a conspiracy to sell
                                                                                           H
    102                SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A         the prope1ties at a lesser price so as to cause wrongful loss and
          wrongful gain to enable A-1 and A-2 to obtain the same.

    10.   In view of the finding recorded that there was no Guideline Value
          and by reason of the properties sold at Rs. 3 lakhs per ground there
          was no pecuniary advantage to Mis Jaya Publications, the charges
B         under Section 13(2) read with Sections 13(l)(c) and 13(l)(d) of the
          PA Act were not established.

    11.   In regard .to A-3, the High Court held that t.he decision to offer the
          land in question was that of the Board and not his.individual decision
C         and he followed the decision of the Sub-Committee and, therefore,
          in view of the collective decision taken by the Board or the Sub-
          committee he cannot be held to be guilty of any charge..

    12.   In regard to charge against A-4, .none of the persons who endorsed
          the file had been attributed with corrupt motive and, therefore, there
D         was no evidence worthy of consideration.

    13.   A-5, who was the Special Deputy Collector (Stamps), was C?nly
          performing his statutory duty and fixed the value of the properties
          in question at Rs. 3 Iakhs per ground after notice to the concerned
E         parties. Hence he cannot be held to be guilty of any charge;
          Moreover, since A-5 was an appellate authority undet the statute, he
          cannot be held tp conspire to fix the value at Rs. 3 lakhs per ground,
          though it may fetch much higher value in the market.

         Against the decision of the High Court in the said appeals, the State
F
    Government not having filed any petitions or appeals, a private party is
    permitted to file these appeals by special leave. Dr. Subramaniam Swamy
    with permission has filed a separate special leave petition and no leave is
    granted to him but ·he has been allowed to address arguments only. We
G   have not separately noticed his arguments but cor:isidered the same in the
    course of our discussion.

          rhe foundation of various charges is that the property in question was
    deliberately sold for less. value with a view to confer pecuniary advantage
    to the firm consisting of Al and A2 which resulted in wrongful loss to the
H   Government Cqmpany and wrongful gain to Al 'and A2.
       R. S. BHARATHI v. J. JAYALALITHA [RAJENDRA BABU, J.] 103
          Examination of the e'vid~ce on record would indicate that the A
    witnesses had admitted that the properties in question had no guideline
    value and hence the charge framed that the properties were purchased
    below the guideline value is defective. Though charge was not based on
    market value, the learned trial Judge proceeded to consider the prosecution
    version by taking Rs. 7.32 lakhs as the 'market value' per ground and held B
    that TANSI suffered Joss; the High Court, however, having examined as
    to what exactly was the market value of the properties in question, held
    in effect that the trial court took into account irrelevant materials and
    overlooked relevant evidence. As observed by the High Court, the property
    was sold by tender process and the bidders quoted their offers and the
    highest offer was that of firiw of respondents Nos. 1-.~nd 2 and under the C
    circumstances, unless the tender process was shown t'51ie vitiated, the price
    quoted by the highest bidder had to be normally taken as the market value.
    Market value being a variable factor and if a price 'Yas quoted and if it
    was not shown that the tender was vitiated, then theprice quoted by the
    highest bidder had to be taken as the market value. It is the admitted D
    case of the prosecution that Jaya Publications offered Rs. 3.01 lakhs per
    ground for the entire land and it offered to purchase the superstructure and
    machinery at Rs. 19 .20 lakhs and other bidders quoted less. On an earlier ·
    occasion when TANSI Foundry unit wanted to sell 3.26 acres of land to
    Tamil Nadu Co-operative Sugar Federation, the value of a ground was E
    fixed at Rs. 3 Jakhs by the Collector, Madras. It could be seen from Ex.D-
    20 which is a letter written by the Collector to the Commissioner of Land
    Administration to the effect that the maximum sale value in the village in
    Block No. 5 ofThiru.vi.ka.Industrial Estate was Rs. 3,12,613 per ground
    based on the sale of a vacant land in S.No. 1617 of Alandur village. He F
    recommended that the rate of Rs. 3 lakhs per ground could be fixed as the
    value for the TANSI Foundry land. That assessment of the Collector was
    accepted by the Commissioner of Land Administration as per Ex.P-61 who
    also fixed Rs.. 3 lakhs as value per ground for the TANSI Foundry land.
    The trial Judge rejected the value of land indicated in Ex.D-20 and Ex.
    P-61 on the ground that TANSI agreed to sell the land to Tamil Nadu G
    Co-operative Sugar Federation at that price in view of the condition that
    the Sugar Feder~tion will put up 15000 sq.ft. of superstructure which would

-   be sold to TANSI at the cost of construction, without paying any amount
    for the land on which the superstructure was to be put up., Therefore, he
    held that Ex D-20, which was accepted by the Commissioner of Land H
     104                 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.
· A Administration under Ex. P-61, could not be correct basis to say that Rs.
     3 Iakhs per ground was the market value of the property of TANSI
     Foundry. However, Tamil Nadu Co-operative Sugar Federation purchased
     the entire property without putting up a superstructure at the rate of
     Rs. 3 lakhs per ground. It cannot also be said that Sugar Federation is
 B   a Government organisation and, therefore, the land was sold to it by TANSI
     at a commercial rate. It was a Federation formed by several co-operative
     societies which were registered under the Tamil Nadu Co-operative
     Societies Act and it could not be treated. as a Government Organisation.
     Therefore, sale of 2.52 acres of land of 'PANSI Foundry to the Sugar
     Federation was a sale to a private party and the price of Rs. 3 lakhs per
 C   ground offered by the Sugar Federation could be taken into consideration
     for reflecting the market value of the property in question. Ex. D-io and
     Ex. P-61 in connection with that sale indicating that the value of Rs. 3 lakhs
     per ground fixed by the Collector, Madras and Commissioner of Land
     Administration could be relied upon.
 D
           While on this point the High Court referred to the fact that in Ex.D.20,
     the Collector stated that the market value of the land in Block No.4 works
     out to Rs. 1,68,649 per ground and the disputed property which is situate
     in Block No.5 is only 180 meters from that land. The Collector, however,
 E   took into account the sale under Ex.P.60, according to which the sale price
     per ground is Rs. 3,12,613. The High Court then adverted to the argument
     of the learned Public Prosecutor that Ex.P.60 should be eschewed from
     consideration on the ground that it lies within the jurisdiction of a different
     revenue district and observed that if Ex. P.60 is to be ignored, the market
 F   value of the disputed property would only be Rs. 1,68,649 and not even
     Rs. 3,00,000.

            In view of the failure of the prosecution to show that the guideline
     value is ..Rs. 7.32 lakhs per ground and in view of the positive evidence
 G   as brought out through Ex. D-20 and P-61 that the ·value of the land of
     TANSI Foundry unit could be about Rs. 3 lakhs per ground particularly
     when the sale was by way of open tender, it cannot be said beyond
     reasonable doubt that the property in question had be.en un~er-sold and thus
     there was loss to TANSI. The view taken by the High Court appears to
 H   us to be a reasonably possible view.
    R. S. SHARA THI v. J. JAYALALITHA (RAJENDRA BABU, J.] I 05

       Now we shall examine whether Ex. P-8, P-57, P-70 and P-71 could A
be considered to assess the market value of the disputed property as
Rs. 7.32 lakhs per ground. Each of these documents was accompanied
by Form I-A wherein the parties acquiesced in the claim for payment of
excess stamp duty. The land comprised in Exs. P-70 and P-71 are small
in extent and they could not be taken into consideration to be safe guide B
to find value of the land sold by TANSI to Jaya Publications because it
will be 53 times higher than the extent of land conveyed under those
documents. In fact, PW.I admitted that they are not comparable sales. The
sale deed executed on 22.9.I991 [Ex.P.8] by Idayam Publications in favour
of Jaya Publications had shown the value of the land at Rs. 4,78,488 per C
ground. It was in respect of a small extent situate in block No. 6 of Adyar
Village. The said sale deed did not show that the value was Rs. 7.32 lakhs
per ground and when the Sub-Registrar wanted to collect additional stamp
duty, it was paid without any demur and from this fact, it could not be
inferred that the value of TANSI Foundry land was Rs. 7.32 lakhs per
ground. Therefore, there is no justification in taking the sale consideration D
mentioned in Ex. P-8 which was only Rs. 4 lakhs and odd per ground and
putting it against the accused by stating that the market value of the
property in question is Rs. 7.32 lakhs per ground. Ex. P-8 cannot offer
a true index to assess the market value ofTANSI Foundry land at Rs. 7.32
lakhs per ground. As regards P.57, which was a sale deed in favour of E
Jaya Publications in respect of 5658 sq.ft. situate in block No.6 of Adyar
Village, the sale price mentioned therein is Rs. 76,344 only per ground.
But, the Sub-Registrar fixed the value for the purpose of stamp duty at
Rs. 6 \akhs and the stamp duty was paid accordingly. Hence, it stands on
the same footing as Ex.P-8.
                                                                            F
      It is strongly contended that the recommendation of Rs. 3 lakhs per
ground in respect of a transaction to be entered into with Tamil Nadu Sugar
Cooperative Federation is stated not to offer a good guide for fixing the
value of the properties in the present case. The High Court took note of
the fact that Tamil Nadu Sugar Cooperative Federation is not a Governmental G
organisation to which a concession has been shown on that basis. It is to
be noticed that the Trial Cou1t relied upon four documents, viz., Exs.
P-8, P-57, P-70 and P-7 I, to show that the market value of the land in
question is Rs.7.32 lakhs per ground. Each of these documents was
accompanied by Form No. IA wherein the parties acquiesced in the claim H
    106                SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.
A   for the payment of excess stamp duty. It is correctiy assessed by the High
    Court that the price ranged between Rs.76,344 to Rs.4,78,484 per ground .
    Indeed, Exs.P-70 and P~71 indicated that Rs. 8 lakhs• per ground would be
    the value but those documents involve ·transfer of a running business. The
    High Cowt also gave impo1tance to the history of the efforts on the patt
B   of TANS! to bring the properties to sale and its failure to obtain the
    reasonable price at the earlier floated tenders. The prope1ties, therefore,
    became a dead investment and inter.est was being paid by TANSI on loans
    borrowed from the banks. At the time of the present transaction, the
    borrowings extended to Rs. 1.87 crores and had to pay Rs.18 lakhs of
    interest per annum· and, therefore, it was not possible to conteqd that
C   bringing the properties in question for sale was imprudent nor it cduld be
    demonstrated that the advertisement did not give sufficient particulars or
    that the tender forms were not made freely availab_le or that anyone of the
    bidders was pressurized into not bidding or bidding for a lower amount
    or that a cartel had been fonned or that the bidding in open tender was
D   vitiated In any manner whatsoever. In such cases the courts have always
    held that the best price obtained through open tender is an index of the
    market value of the property. The Collector ofMadras and the Commissioner
    of Land Reforms looked into the matter and held that an amount of
    Rs. 3 lakhs per ground is the market value of the land in question. Contrary
E   to what is stated by the prosecution, the valuation in Ex.D-20 was not made
    on the basis of sale being to a Government Corporation but on the basis
    of the independent data relating to sales ofland in the neighbouring blocks.
    The effort of the prosecution to show that the actual sale when made to
    the Tamil Nadu Sugar Cooperative Federation was at a far higher price than
    Rs. 3 ·1akhs per ground since 15000 sq. ft of bl)ilt area was to be given at
F   a cost to T Al'.'ISI without the plinth area be.ing valued. This exclusion of
    the plinth area has not been established and,. on the other hand, the T ANSI
    Board had passed a resolution not to go in for office space due to financial
    constraints but the price per ground.was not altered in any manner. The
    High Court has gone into this aspect in detail, citing the relevant
G   documents. Therefore, the price offered by the respondents and accepted
    by TANSI cannot be termed to be not a fair price in regard to the properties
    in question going by the state of evidence ori record. If the value of the
    properties is determined, as stated above, the view taken by the High Court
    in respect of the various charges under Sections 13(1 )(c), (d), 13(2) of the
H   Prevention of Corruption Act and unjer Sections 409 and 120-B IPC would
          R. S. SHARATHI v. J. JA YALALITHA [RAJENDRA BABU, J.] 107

       stand to reason.                                                           A
             The argument of Sri Andhyarujina and Shri Natarajan is that officers
 I'"
       had proceeded initially on the basis that the land in question had a
       Guideline Value ofRs.7.32 lakhs pi::r ground and hence the same constituted
       a benchmark. The High Court has gone on to examine the case as if it B
       is a valuation court and did not examine the matter in the perspective in
       which charges are framed agail)st the :iccused. This argument ignores that
       the gist of the charge is causing wrongful loss or gain in the sale of the
       land which could be, only on the basis of its market value and not on
       assumed figures or notional value. Thus, the finding of the High Court
       that the prosecution has not succeeded in establishing that the market value C
       of TANSI Foundry land sold to Jaya Publications as Rs. 7.32 lakhs per
       ground cannot at all be said to be a perverse finding.

               We may now proceed to consider the valuation of superstructure.

.,     Exhibit P-5 showed that the building was worth Rs. 18,22,654 which is D
       less than the value offered by Mis Jaya Publications. This amount of
       Rs.18,22,654 was assessed by one Sivaraman at the instance of PW-I after.
       the sale was effected. The assessment ofSivaraman under Exhibit P-5 was
       not impeached. On the contrary, the prosecution placed reliance upon the
       same and adve1ting to the evidence of PW-19, the Design Engineer, and E
       Ex.P-59 approved by the Chief Engineer wanted to contend that the value
       of the building is Rs. 53,12,354. PW-19, the Design Engineer, assessed it
       at Rs. 4,64,75,036 as could be seen from Ex. P-58. Subsequently, the same
       was modified by the Chief Engineer by bringing it down to Rs. 53,12,354.
       There is a big difference of amount of more than 4 crores between the value
       assessed by the PW-19, the Design Engineer and the value fixed by the F
       Chief Engineer. They did not contain any details as to how the value had
       been finally arrived at Rs. 53,12,354 of the building. In Ex. P-58, the value
       of the structural columns were shown at Rs. 54,32,130 but in Ex. P-59,
       it was shown as 39 lakhs, and no evidence was adduced before the Court
       to show that how these figures were arrived at, although, it is stated that G
       the witnesses had taken about 40-50 pages of note. If that was so, the same
       should have been produced by the prosecution and in the absence of
       production of those notes, forming part of evidence is difficult to accept
       that the value mentioned in Exs. P-58 ·and P-59 was the correct value for
       the building. Ex. P.5 shows calculation and indicated that as to how the H
    108                SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A value for the building was arrived at which is a document offered by the
    prosecution in evidence.

          The guideline value has relevance only in the context of Section
    4 7-A of the Indian Stamp Act (as amended by TN Act 24 of 1967) which
B   provides for dealing with instruments of conveyance which are undervalued.
    The guideline value is a rate fixed by authorities under the Stamp Act for
    purposes of determining the true market value of the property disclosed
    in an instrument requiring payment of stamp duty. Thus the guideline
    value fixed is not final but only a prima facie rate prevailing in an area.
    It is open to the registering authority as well as the person seeking
C   registration to prove the actual market value of property. The authorities
    cannot regard the guideline valuation as the last word on the subject of
    market value. This position is made clear in the explanation to Rule 3
    of Prevention of Undervaluation oflnstruments Rules. The said explanation
    reads as follows :-
D
              "Explanation.-The ''Guidelines Register" supplied to the officers
             is intended merely to assist them to ascertain prima facie, whether
             the market value has been truly set forth in the instruments. The
             entries made therein regarding the value of properties cannot be
             a substitute for market price. Such entries will not foreclose the
E
             enquiry of the Collector under section 47-A of the Act or fetter
             the discretion of the authorities concerned to satisfy themselves
             on the reasonableness or otherwise of the value expressed in the
             documents."

F        This explanation also will have to be read in conjunction with
    explanation to Section 47-A of the Indian Stamp Act (as amended by TN
    Act 24 of 1967) which reads :-

              "Explanation.- For the purpose of this Act, market value of any
G            property shall be estimated to be the price which, in the opinion
             of the Collector or the Chief Controlling Revenue Authority or the
             High Court, as the case may be, such property would have
             fetched or would fetch, if sold in the open market on the date
             of execution of the instrument of conveyance, exchange gift,
             release of benami right or settlement"
H
          ... ·· ..   -·




        R. S. BHARATHI v. J. JAYALALITHA [RAJENDRA BABU, J.) 109

          This scheme of the enactment and Rules contemplate that guideline A
    value will only afford a prima facie basis to ascertain the true or correct
    market value undue emphasis on the guideline value without reference to
    the setting in which it is to be viewed will obscure the issue for
    consideration. It is clear, therefore, that guideline value is not sacrosanct
    as urged on behalf of the appellants, but only a factor to be taken note of B ·
    if at all available in respect of an area in which the property transferred
    lies. In any event, therefore. if for the purpose of Stamp Act guideline
    value alone is not a factor to determine the value of property, its worth
    will not be any higher iri the context of assessing the true market value
    of prope1ties in question to ascertain whether the transaction has resulted C
    in any offence so as to give a pecuniary advantage to one patty or the other.

          In ascertaining the true value, the High Court has taken note of
    several features. Firstly, the price has been offered by the firm of A-1 and
    A-2 in a tender process pursuant to an advertisement issued in a newspaper.
    A tender process by the TANSI not being shown to be or demonstrated D
    to be vitiated is a transparent and good piece of evidence to indicate t~e
    real price of the properties in question. That line adopted by the High Court
    cannot be faulted with at all. Secondly, the adoption of Rs. 7.32 lakhs per
    ground as Guideline Value will have to be in tenns of Tamil Nadu Stamp
    Act and not de hors the same. In the view we have expressed as to the E
    nature of guideline value the finding recorded by the High Comt that no
    Guideline Value has been fixed in respect of the properties in question need
    not be further examined. The next basis upon which the High Court
    proceeded to fix market value is the price of Rs. 3 lakhs per ground in
    respect ofland sold to Tamil Nadu Sugar Corporation Federation. The said
    land forms part of the land out of which a portion is sold to the firms of F
    respondents. The contention of the prosecution that this is not a comparable
    transaction has been rejected by the High Court for valid reasons. The
    approach of the High Court cannot be said to be irrelevant or perverse.

          Argument regarding the extent of land that was sold to the firms of G
    Respondents Nos. l and 2 is raised. It was pointed out that an extra piece
    of l;md of 9 cents or so [about I/10th of an acre] over and above the
/   approximate extent mentioned in the advertisement was sold to the firm
    of respondents. We do not think that this aspect assumes any significance
    especially in view of the fact that one of the terms in the advertisement H
    110                SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R.
A itself stipulates that the actual area to be sold will be according to
    measurement. Thus the view taken by the High Court in this regard is
    perfectly in order and calls for no interference.

          The contention that there was enough material on record to show that
B A-l had knowledge of the purchase of the TANSI Foundry land and
    A- l had signed several documents in relation thereto need not be examined
    because even proceeding on the basis on which the learned counsel
    contended would not carry the matter any further. The stand of respondents
    Nos. 1 and 2 is not that the firms of which they are partners have not
    purchased the properties in question, but only that respondent No. 1 has
C   not signed some of the documents leading to sale of the properties in
    question. There is overwhelming evidence on record to indicate that
    accused No. 1 has signed the documents in question, but the denial of
    respondent No. 1 appears to be too naove to be accepted in a court of law.
    May be respondent No. 1 might have tried to be unduly cautious without
D   fully understanding the implications in law. Fact remains that properties
    in question have been sold to firms of which respondents Nos. 1 and 2 are
    partners. That fact in the case not being in dispute, it is unnecessary to
    dilate on this aspect any more.

E         Insofar as the offence under Section 1208 is concerned, it is not clear
    from the arguments made by the learned counsel on behalf of the appellants
    in what ~anner the conspiracy is sought to be established. How there have
    been meeting of the minds of different accused at different stages and what
    the common design has been, is not clear. Even if we assume for the
    purpose of argument that some of the officers of the Government were
F   circumspect in their attitude having come to the conclusion that A- I was
    interested in purchase of the properties and have put their seal to such act
    either taciOy or over zealously by being too expressive of the same, we
    cannot hold that there was a conspiracy amongst various persons.

G          In the present case, conspiracy was sought to be inferred from the
    conduct of several accused. The contention on behalf of the State was that
    while putting a note on 13.1.1992 A-4 had stated that he verified with
    A-3 and came to know that the market value of the property was Rs. 3 lakhs
    per ground for larger extent and that A-4 could not have verified it with · d
H   A-3 on 13.1.1991 and, therefore, conspiracy could be inferred. The note
     R. S. BHARATHI v. J. JAY ALALITHA [RAJENDRA BABU, J.] 111

• file indicates that A-4 discussed with Secretary (Industries), Joint Secretary A
  (Industries) and Chairman-cum-Managing Director, TANSI (A-3) which
  means that before he made the said note, he discussed the issue not only
  with A-3 but also with other two persons and thereafter came to the
  conclusion that the price was Rs. 3 lakhs per ground. One of the contentions
  raised on behalf of the State in the case was that the note file - Ex.P-48 B
  - prepared at the Secretariat was not circulated to A-1 and it was a
  deliberate omission on the part of A-4 and, therefore, it would be inferred
  that there was a conspiracy in the matter. It was also indicated that G.O.
  Ms. No. 836of1991 - Ex.P-53 - directed that the Board of Management
  should exercise proper scrutiny in the approval of all tenders and purchase C
  contracts and that prior approval of the Government should be obtained
  in respect of all tenders for works, equipments, etc. and all purchases
  whether by open tender or by limited tender enquiries, etc. where the value
  of the contract exceeds Rs. 1 crore. Therefore, the said note file should
   have been circulated to A-1 for approval and not circulating the said note
   file to A-1, offence of conspiracy could be held to have been made out. D
  The learned Judge held that G.O. Ms. No. 836 of 1991 had to be read in
  its entirety and if it is so read, it would show that it would be applicable
  only in respect of financial outgo by means of tender for works or for
  purchase of equipments and all purchases as noted in different paragraphs
  thereof and this G.O. was issued only as a financial discipline measure and E
  to monitor the expenditure above Rs. 1 crore and the word 'tender' used
   in the said G.O. did not mean that the sale ofland by T ANSI will also come
   within the ambit of the said G.O. since it was clear from the word
   'contracts' used in the said paragraphs that the G.O. was applicable to the
   tenders for works, equipments, etc. if it is for purchase and not for sale F
  of property. Inasmuch as in the markings in the note file there was
   reference to 'Minister (Rural Industries)', 'Minister (Finance)' and 'Chief
  Minister' and according to the prosecution, it was scored off by PW-14
  at the instance of A-4, the prosecution wanted to draw support from this
   fact. In fact, PW-14 admitted that when she put up her note, she only
   stated that it had to be circulated to A-4 and PW 11 wanted the file to be G
   circulated to Minister (Rural Industries), Minister (Finance) and Chief
   Minister and PW 14 did not make such a note ang, therefore, by merely
   finding the letters "M(Rl)", "M(F)" and "CM" and thefr scoring off, we
   cannot come to the conclusion that they were first entered and later scored
   off at the instance of A-4. It was, therefore, not possible to hold that there H
    112                 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A   was conspiracy among the accused on that account.

            An argument was put fo1ih that A-5 did not follow the procedure
    contemplated under the Tamil Nadu Stamp (Prevention of Under-valuation
    of Instruments) Rules, 1968 since he did not wait for 21 days for the parties
B   to submit their representations before he passed the final order under Rule
    7 of the said Rules and A-5 ought to have waited for 21 days as
    contemplated under Rule 4 of the said Rules and thereafter he should have
    passed a provision_al order under Rule 6 and then final order under Rule
    7. The objections of Jaya Publications were received on 3.12.1992. There
    is no rule that A-5 should wait for 21 days since the period of 21 days as
C   contemplated under Rule 4 of the said Rules was only the upper limit for
    filing of objection~. A-5 inspected the property on 4.12.1992 and then
    assessed the value of the property by passing the final order on 7.12.1992.
    The question of passing of a provisional order would have arisen in the
    event of A-5 coming to the conclusion that market value was more than
D   the value mentioned in the sale deed so as to call upon the parties to submit
    their objections, if any, to determine the market value. If A-5 came to the
    conclusion that the market value of the property was as indicated in the
    sale deed, then there was no necessity for A-5 to pass a provisional oider
    at all and call for objections.    Hence this conduct on his part could not
E   indicate that there was a conspiracy.

         On scrutiny of the entire evidence led by the prosecution the charge
    of conspiracy cannot stand as there is no link to show that the conspirators
    agreed to have the property sold or the property purchased at a lesser price
    so as to cause wrongful loss or wrongful gain or t~ enable A-1 and A~2
F   to obtain the property at a price less than its value.

             Section 13( l )(d) of the Act states as follows :-

             "A public servant is said to commit the offence of criminal
             misconduct, if he
G
             (i)    by corrupt or illegal means, obtains for himself or for any
                    other person any valuable thing or pecuniary advantage; or

             (ii)   by absuing his position as a public servant, obtains for
H                   himself or for any other person any valuable thing or
-       R. S. BHARATHI v. J. JAYALALITHA [RAJENDRA BABU, J.] 113

                     pecuniary advantage; or

                (iii) while holding office as a public servant, obtains for any
                                                                                  A

                       person any valuable thing or pecuniary advantage without
                     · any public interest."

          To attract provisions of Section I3(l)(d) of the Prevention of B
     Corruption Act, public servant obtains for himself or any other person any
     valuable thing or pecuniary advantage

          (i)    by corrupt or illegal means, or

          (ii) by abusing his position as public servant, or
                                                                                  c
          (iii) without any public interest.

            The circumstances under which the properties were purchased by
     Mis Jaya Publications and Mis Sasi Enterprises cannot be treated as one D
      obtained in the circumstances arising in Section 13(1)(d). The facts
      established in the case point out that the prope1ties are not purchased by
      corrupt or illegal means or by abusing the official position as public servant
      to obtain pecuniary advantage discarding public interest. The purchase was
      effected through open sales held by TANSI. The right to sell the properties E
      in question was available with the Corporation which chose to do so in
      favour of Mis Jaya Publications and Mis Sasi Enterprises. It is not
      established that A-1 or any other person obtained for herself any valuable
      thing or pecuniary advantage by abusing her position as public servant. On
      the other hand, as stated earlier, the properties in question were sought to F
      be sold from time to time and pursuant to such steps taken the properties
      had been sold to two firms in question. The sale has been held pursuant
      to various resolutions of the Government since 1985 and that the putting
      up of the properties in question for sale itself was not against any public
      interest. When the two firms of which A- I is a partner offered appropriate
      price the same having been accepted, it cannot be said that it has resulted G
      in obtaining any pecuniary advantage or valuable thing by abuse of the
      official position. Ifthe properties in question were sold by TANSI in public
      interest, the obtaining of the same through purchase in such a transaction
    · for valuation consideration which does not fall below market value does
      not come within the scope of Section 13(l)(d). Thus, the charge under H
    114                 SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A Section \3(1)(d) is n9t established and we concur with the findings
    recorded by the High Court in this regard.

          Offence under Section 13(1 )(c) of the P1'evention of the Corruption
    Act would arise if any public servant dishonestly or fraudulently
B   misappropriated or otherwise converted for his own use any property
    entrusted to him or under his control as a public servant or allowed any
    other person to do so . In the present case, it cannot be said that the accused
    acted dishonestly because there was no wrongful gain or wrongful loss and
    hence it cannot be said that they acted fraudulently. It cannot also be said
    that the accused has converted the property of T ANSI inasmuch as property
c   was sold pursuant to a transparent tender process which is not shown to
    be vitiated in any manner. The property in question belonged to T ANSI
    a Government Company and it was neither trust property nor was it
    entrusted to or under the control of the Chief Minister or any Minister.
    Hence, Section 13(l)(c) of the Prevention of Corruption Act is not attracted
D   to the facts of the case.

            The only evidence against A-6 is that he spoke about the disposal
    of file relating to sale of land in question to be expedited. This fact is
    spoken to by PW-12. PW 12 stated in her evidence that she voluntarily
E   appeared before the Magistrate and gave a statement without being
    sponsored by the Investigating Officer though PW 23, Investigating Officer
    stated that he gave a requisition for recording her statement. A-6 did not
    participate in the meeting held on 14.10.1991 nor did he participate in the
    meeting held on 6.11.1991. The High Court did not accept the evidence
F   of PW-12. This evidence does not in any manner advance the case of the
    prosecution to establish that A-6 has committed any offence. ·

           Regarding the charge against A3, who was the Chairman-cum-
    Managing Director ofTANSI from 1.8.1991 to 10.7.1992, we have to bear
    in mind certain facts. The decision to accept the offer of Jaya Publications
G   was that of the Board and not of A-3 alone. PW 8 the General Manager
    and Company Secretary of T ANSI admitted that all the decisions were
    taken by the Sub-Committee and no decision was taken independently by
    any individual and A-3 followed the decision of the Sub-Committee, which
    was approved ~y the .Board. Therefore, there was no evidence to show
H   that A-3 acted against the decision to favour Jaya Publications. The sale
    R. S. BHARATHr v. J. JAYALALITHA [RAJENDRA BABU, J.] I 15

of land to J~ya Publications is a collective decision of the Board and not A
of any Individual, the price on which the land was to be sold and the price
on which the buildings were to be sold were decided by the Board of
Directors to which the Government gave approval and thus there was no
independent assignment to A-3 in deciding the matter nor did he suppress
any document by not placing them before the Boru·d of Directors.            B
        A-5, Special Deputy Collector (Stamps), only performed statutory
duty in fixing the value of the property in question at Rs. 3 lakhs per ground
after notice to the concerned parties. The matter was statutorily referred
to A-5 for fixing the market value of the property and thereafter A-5 fixed
the market value of the prope11y after taking into consideration the relevant C
factors. A-5 took into account the fact that in the vast extent of about 2
to 3 sq.kms. the land purchased by Jaya Publications was 3/4 km. away
from Grand South Trunk road and King Institute was at the eastern
boundary of the land in the industrial estate and the land value was only
Rs~ 3 lakhs per ground in the front portion and about Rs. 2 lakhs per ground D
in the extreme n011h because of the threat of inundation of river Adayar
during flood season. Ex. P-6 shows that A-5 had taken into consideration
several verdicts of the Madras High Court which say that the guideline was
not final and it was only a preliminary exercise to find out the· real,market
value ofa pa11icular property and he also compared the other sales and then E
arrived at the value. He referred to Ex. D-10 which is a sale deed by which
an extent of 6695 sq.ft. of land in Bloek No. 6 at Adayar village was sold
on I 2.10. I 990. The vendor is Paramount Pollution Control Limited. The
value per ground is shown to be Rs. 99,984. The question of valuation
was referred under Section 47-A of the Stamp Act and A-5 fixed the value F
of the property at Rs. 2, 17 ,008 per ground. Another document No. 1442
of I 991, which was referred under Section 47-A of the Stamp Act, was
sale by Wazir Begum to Capro Industries and through this transaction an
extent of 5393 sq.ft. of land was sold which is about two ground. The
executant in the deed had shown the value of land per ground as
Rs. 1,89,120 and A-5 fixed the vaiue at Rs. 3 lakhs per ground but in the G
course of his proceedings - Ex. P-6 - had referred to this document but
oniy made a factual error in stating that the property was sold to SIDCO.
Ex.P-68 is a deed registered on 31.5.1991 by which an extent of 5538.5
sq.ft. of land was transferred. The executant had valued the land at Rs.
2,07,984 per ground and on being referred under Section 47-A of the H



                                                                                  ,
        116                SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

    A   Stamp Act, A-5 fixed the value of the land at Rs. 2, 78, 184 per ground.
•       These three sale deeds related to the sale of property falling within Block
        No. 6 of Adayar village and the properties covered by the said documents
        were smaller in extent. Since the maximum extent being 2.78 acres \Vhich
        was conveyed under Ex.D-10 and even for that property A-5 had fixed Rs.
    B   2, 17,008 as value per ground and, therefore, he held that the value fixed
        by A-5 at Rs. 3 lakhs per ground for the property in dispute could not be
        stated to be an under valuation.

               In answer to the contention that Exs. P-8, P-57, P-70 and P-71 were
    C   not taken into consideration by A-5 when he fixed the value for disputed
        property at Rs. 3 lakhs per ground, it could be seen that the lands comprised
        in these documents were not comparable and did not reflect the true value
        of the property in dispute. By letter - Ex. D-20, the Collector had fixed
        the value of the property, Ex. P-61 - the Commissioner of Land
    D   Administration fixed the value of the disputed land at Rs. 3 lakhs per
        ground. In Ex. D-21, PW l himself admitted that Exs. P-70, 71 and 8 were
        not the comparable sales and further it was seen from the evidence that
        the land conveyed under Ex. P-8 was close to I 00 feet road and the extent
        was also smaller as is in the case of Ex. P-57. Ex. P-4 is a letter addressed
        by way of answer to his subordinate setting out the guidelines. A-5 fixed
    E   the market value of the property covered under Ex. P-68 at Rs. 2,78,184         .
        per ground and not at Rs. 6 lakhs though the property was situate
        within Block No. 6 of Adayar Village. Ex. P-68 was referred under
        Section 47-A of the Stamp Act and A-5 was not bound by the guidelines
      ~Je assess;ng the value of the pcoperty and that he need not even accept
    F ·, 'value mentioned in Ex. P-8, P-57, P-70 and P-71 as the properties
        conveyed under the said sale deeds were smaller in extent.

               The trial Judge proceeded on the basis that A-5 committed an error
       in taking into consideration the sale to SIDCO for fixing the market value
    G of the property in dispute though, in fact, document No. 1442 of 1991 was
       not the sale to SIDCO. But these documents have not been put to A-5 and
       he had no opportunity of explaining the circumstances under which these
      documents had come into existence and, therefore, the trial Judge was not
      justified to test his veracity with reference to those documents. Therefore,
    H A-5 cannot be attributed with any misconduct.
    R. S. BHARATHI v. J. JAYALALITHA (RAJENDRA BABU, J.] 117

       As regards the charge under Section 169 IPC, the findings of the A
Trial Court are affirmed by the High Court.

       The property in question is not owned by the Government but a
public sector undertaking and under the Articles of Association, prior
approval of the Government is needed before sale of any immovable B
prope1ty by it. The High Court has considered that in the context of Section
169 IPC, such obligation cannot convert property as belonging to or owned
by the Government. It was also held that the Code of Conduct cannot be
construed to spell out a legal prohibition.

      On behalf of the appellants, it is urged that A-I had purchased the C
TANSI Foundry land as a public servant and she was legally bound not
to bid for purchase for this property and thereby she had abused her
position as a public servant to obtain for herself and A-2 the valuable
property TANSI Foundry and also a pecuniary advantage ofRs.3.5 crores.
There cannot be serious dispute that A- I was a public servant at the D
relevant time. According to the prosecution Section 169 IPC embodies a
prohibition on a public servant not to purchase or bid for certain properfy
being legally bound as such a public servant not to purchase or bid for that
property. The ~rnphasis laid is that the principle underlying under Section
 169 IPC is that a public servant is in fiduciary obligation in relation to E
property which is in his ?harge or over which he could have control and
he should not put himself in a position of conflict of interest between his
public duty in relation to that property and his private interest in purchasing
that property and the general law in this regard being that persons in
fiduciary position are not to derive advantage from their position and tl4~, F
should not place themselves in a position where there would be a conflict ·
of interest in duty, whether such transaction would result in a loss to public '
or not. In this context, the provisions of Section 52 of the Indian Trust
Act, 1882, Section 136 of the Transfer of Property Act, 1882 and Order
XXI, Rule 73 CPC are brought to our notice and reliance was also placed
on the decision of the Privy Council in (Seth) Kanhaya Lal, since deceased G
(Now represented by Seth Hanuman Prasad & Ors.) v. National Bank of
India Ltd. New Delhi, AIR (1923) PC 114, wherein it was observed that
there should not be merging of two positions, namely, that the interest of
the seller to get the highest price and the buyer to get the lowest price in
the same person. In such an event, there will definitely be a conflict. H
    118                  SUPREME COURT REPORTS (2003] SUPP. 6 S.C.R.

A Applying the same principles, even in relation to the position of Ministers,
     Ministers ought not to enter into any transaction whereby their private
     pecuniary interest might even conceivably come into conflict with their
     public duty. It is urged that the expression "legally bound not to purchase'
     in Section 169 IPC must, therefore, be understood in the context of a
B fiduciary duty or obligation of a public servant not to purchase or bid for
     property from the Government or in respect of which he or she is in-charge
     or control. It is further urged that the expression "legally bound to" must
     be given a wide connotation so as to cast an obligation on a public servant
     arising in any legal way, viz., by law in the sense of statute law, by contract
     or bond, by an order of a competent authority having the force of law, or
C by an order of court, or by any fiduciary obligation imposed on a public
     servant by the law of trusts or otherwise. The words "legally bound" do
     not necessarily only mean the law made by the legislature or statutory law.
     Section 43 IPC contains a definition of a person being legally bound to
....
     do, that is, a person is stated to be legally bound to do whatever it is illegal
D in him to omit. The submission is that this definition will have to be given
     a proper meaning by reference to cognate and grammatical variations _and
     a person is stated to be legally bound not to   I
                                                       do something whatever it is
     illegal in him to do. The said provision also provides for a definition of
     what is "illegal", that is, everything which is an offence or which is
E prohibited by l(lw or which furnishes a ground for civil action. In the
     present case; purchase of the TANSI Foundry land was prohibited by law             ..
     to A-1 and, therefore, contended that a high official like a Chief Minister
     cannot purchase Government property or property over which the
     Government has control when such an elementary obligation is imposed
F on smaller officials. It is submitted that Rule 2(b) of the G.O.No.1012
     issued by the Tamil Nadu Government states that after taking office and
     so long as he remains in office a Minister shall refrain from buying from,
     or selling to, the Government any immovable property. This order of the
     Government has been issued in exercise of the executive power of the State
     vested in the Governor under Article 154 read with Article 162 of the
G Constitution and the executive have power to make any regulation which
     would have the effect of a law so long as it does not contravene any
     legislation already covering the field and such executive orders having
     been made under Article 73 of the Constitution have for their operation
     an equal efficacy as an Act of Parliament or the rules made by the President
H under Article 309 of the Constitution. The order of the Governor bound
     R. S. BHARATHJ v. J. JAYALALITHA [RAJENDRA BABU, J.] 119

 · A-1 not to purchase property from the Government. The contention is that A
   Rule 2(b) of the GO is not a rule of moral instruction or guidance to be
   observed or not-Observed as the Minister deems fit or not and it was meant
   to be a bindi11g rule of action and in this context, reference was made to
   the decision In Vidadala Harinadhababu & etc. v. N.T. Ramarao, Chief
   Minister, State ofAndhra Pradesh, Hyderabad & Ors., AIR (I 990) AP 20, B
   the Full Bench of the Andhra Pradesh High Court observed that no minister
   would claim or would have the temerity to claim that he is not bound by
   restrictions contained in the Code of Conduct and the mere fact that the
   Government order is not statutory is irrelevant and even executive orders
   have a binding force in law and it could not be spelt out that sanction is C
   not logically essential for a law and, therefore, the Chief Minister was also
   bound and was within the scope of the order. For this purpose, it was also
   submitted that the question is not whether T ANSI Foundry land was
   technically the property of the Government but of a Government company,
   but whether A-1 was purchasing it from Government within the prohibitio~ D
   of Rule 2(b) of the GO and whether A-1 was purchasing property which
   was completely under the charge and control of the Government. In this
   case, A-1 was the Chief Minister and the Minister for Industries at the
   relevant time and she was in charge of the said Department fror.1 24.6.1991
   to 13.5.1993. Article 77A(4) of the Article.s of Association of TANSI
   forbids T ANSI from disposing of lands transferred to the company by the E
   Government without previous approval of the Government. Inasmuch as
   the Government's approval had to be given the Government had necessary
   control over the said properties and such properties fall within the concept
   of the G.O. which prohibited in terms of Rule 2(b) of GO from purchasing
   the prope1ty whose disposal was completely under the control of the F
   Government. Even otherwise, he submitted that in a case of this nature
' it is necessary to lift the veil of the corporate personality of TANS I and
   find out that the property really belonged to the Government and T ANSI
   was another emanation thereof and corporate personality cannot be used
   to commit fraud or improper conduct or to evade an existing obligation G
   or to protect crime. In this context, heavy reliance is placed on the Code
   of Conduct.

        We may now advert to the contentions of the learned senior counsel
 appearing for the 1st Respondent:                                         H
    120                SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A          The arguments of the le~rned counsel for the appellant goes beyond
    the scope of the charge, that the phrase "legally bound not to" has not been
    defined in the IPC but what is defined in Section 43 is the opposite concept
    i.e. "legally bound to do", that in order to attract Section 169 there must
    be a prohibition under the statute or statutory rules or regulations and there
B   is no such law in the present case. The Code of Conduct is not statutory
    and cannot be enforced by the Court. It is more in the natu1e of internal
    guidelines meant for governing the conduct of Ministers and does not give
    a right to third party to maintain a civil action, much less, the violation
    thereof attracts any penal provision. The enormity of the result of the
    appellant's argument being accepted would be that a public servant would
C   be guilty of an offence under Section J 69 if there is any contravention
    arising out of a plethora of administrative instructions. Article Jq2 of the
    Constitution cannot elevate the Code of Conduct to the status of statute or
    statutory rules, even assuming that the State can legislate on the topic. In
    any case, it is contended, Code of Conduct contains no prohibition against
D   the purchase of the property in question which is owned oy the Government
    Corporation, namely, Tamil Nadu Small Scale Industries Corporation. A
    distinction is maintained in the Code itself between the property of the
    Government and the property of the Government undertakings. The
    property of a Government Company, which has a distinct legal identity,
E   cannot be equated to the property of the GO\:ernment though the Government
    may have control over the Corporation. The prohibition must be clear and
    unaihbiguous to give rise to the offence. The theory of lifting the veil of
    the Company cannot be invoked while dealing with the criminal offences
    alleged to have been committed by a third party. While elaborating the
F   point that the definition of "legally bound to do" ca!1not be imported,
    attention is drawn to Sections 175, 176, 177, 179, 181, 191, 202, 221, 222,
    223 and 225-A IPC wherein that expression occurs. The learned counsel,
    therefore, submits that the said definition is relevant only while construing
    those Sections and what is contemplated in the above Sections is that the
    act which a person is legally bound to do but ifhe omits to do that particular
G   act, an offence is made out, but, Section 169 only recognizes an act as
    an offence if a public servant being legally bound not to purchase or bid,
    purchases or bids for the property. Finally, it is contended that it would
    be violating the basic principle of criminal law to convict a person for an
    act which may furnish grounds for civil action but which, otherwise, is not ..
H   prohibited by law. In any case, it is submitted, the Code of Conduct being
         R. S. BHARATHI v. J. JAY ALALITHA [RAJENDRA BABU, J.] 121

     unenforceable in a court no civil action would lie and no such civil action      A
     has been spelt out anywhere in the charge or in the course of trial.

          These contentions, by and large, were accepted by the High Cou1t.

          Section 169 IPC bears the marginal heading "Public Servant unlm1fully
     buying or bidding for property" (emphasis supplied). Section 169 IPC sets B
     out that (I) the person should be a public servant, (2) in such capacity as
     public servant, he is legally bound not to purchase or bid 'certain property',
     and (3) either in his name or in the name of another or jointly, or in shares
     with others.
                                                                                      c
            The offence under Section 169 !PC is incomplete without the
     assistance of some other enactment which imposes the legal prohibition
     required. "The enactment containing the prohibition naturally and necessarily
     defines the area which is covered by it, both as to the class of public
     servants to whom it applies and the nature of the dealings in which those D
     servants are prevented from engaging" [Vide 11 Cr.L.J. Reports 613,
     Narayan v. Emperor]. Therefore, in order to come within the clutches of
     Section 169 IPC, there should be a law which prohibits a public servant
     from purchasing certain property and if he does it, it becomes an offence,
     under Section 169 IPC. Section 481 Criminal Procedure Code, Section 189 E
     of the Railways Act, 1989 and Section 19 of the Cattle Trespass Act, 1871'
     and instances of that nature in several enactments are available in which
     persons mentioned therein shall not directly or indirectly purchase any
     property at a sale under those Acts. Similarly Section 136 of the Transfer
     of Property Act provides that no Judge, legal practitioner, or officer F
     connected with any Court of Justice shall buy or traffic in, or stipulate for,
     or agree to receive any share of, or interest in, any actionable claim and
     no Court of Justice shall enforce, at his instance, or at the instance of any
     person claiming by or through him, any actionable claims so dealt with by
     him as stated above. Thus, in these circumstances where a law has
•'   prohibited purchase of property or to bid at an ~uction, the prohibition G
     contained therein will be attracted and will become an offence under
     Section 169 IPC.

            On a plain reading of the Section and seeking the assurance from
     the marginal heading as well, it is fairly clear that prohibition should flow H
    122                SUPREME COURT REPORTS [2003] SUPP. 6 S.C.R.

A   from a law. Such law in the context of Section 169 IPC should mean that         ...,,,_
    the law as ordinarily understood, that is to say, an enacted law or a rule
    or regulation framed under such law but not an executive order which
    confers no rights on anybody nor sets down legally enforceable obligations.
    The rules and administrative instructions governing the public servants
B   holding the civil post have undisputedly no application in this case. The
    law, which is pointed out, is the Code of Conduct for Ministers issued in
    G.O.Ms.No. 1350, dated 26.7.1968 by the Government of Tamilnadu in
    the name ~f Governor. Para 2(b) thereof enjoins that a Minister, so long
    as he remains in office; shall "refrain from buying from or selling to the
C   Government, any immovable property except where such property is
    compulsorily acquired by the Government in usual course".

           A perusal of the Code wouid indicate that they lay down guidelines
    or norms of conduct which the Minister must observe. The rules also
    prescribe the authority who should ensure compliance with the Code and
D   to whom various statements have to be furnished. The procedure to be
    followed is left to the discretion of that authority in case of breach of the
    Code. That authority is the Chief Minister.

            In our view, the Code of Conduct not having a statutory force and
    not enforceable in a Court of law, nor having any sanction or procedure
E   for dealing with a contravention thereof by the Chief Minister, cannot be
    construed to impose a legal prohibition against the purchase of property
    of the Government so as to give rise to a criminal offence under Section
    169 IPC. In law, there must be a specific provision prohibiting an act to
    make it illegal. A Code of Conduct prescribed by the Government under
F   certain notification by itself cannot be elevated to the level of law as has
    been rightly held by the Andhra Pradesh High Court in the case of Vidadala
    Harinadhababu v. N.T. Ramarao, AIR (1990) A.P. 20. Although there are
    certain strong expressions used in the course of the said decision to the
    effect that "no minister or Chief Minister can have the temerity to act
G   contrary to such a Code" and it is binding on the Minister, still it cannot
    be elevated to the level of prohibition under law. Following observations
    made by a Full Bench of the A.P. High Court in V. Harinathababu's case
    are quite apposite.

             "The Codes of Conduct issued by the Union Government and the
H            State Government are not statutory in nature. They lay down rules
   R. S. BHARATHI v. J. JAY ALALITHA [RAJENDRA BABU, J.] 123

          of conduct which the Ministers must observe. They are in the A
          nature of guidelines. They also prescribe the authority who should
          ensure compliance with the said Code; it is to him that the
          statements contemplated by paragraphs I (a), 2(a) and 2(e) have
          to be furnished. Even the procedure to be followed in the case of
          an alleged or suspected breach of the Code is also left to the B
          discretion of such authority. Having regard to the facts and
          circumstances of the Code, the 'authority' shall evolve the
      !   appropriate procedure. Evidently, the nature of action to be taken
          on such enquiry is also left to him. Not being statutory, Coutts
          will not enforce them."
                                                                             c
          At paragraph 50, it was futther observed-

          "(i) There is no provision in the Constitution, nor is there any
          provision of law which ~egulates the conduct of a Minister-
          which expression includes Chief Minister and Prime Minister. D
          There is also no constitutional or statutory provision prohibiting
          a Minister from engaging himself in any profession, occupation, ·
          or business, whether actively for gain or otherwise ..

          (ii) The Code of Conduct issued "by the Union Government-and
          by the State Government-is of great significance and sanctity, E
          though it is not statutory. It fills a great void. The Code is evolved
          with an eye upon good Government and clean administration, not
          only in action but also in appearance. It is binding upon all
          Ministers. It prescribes the authority who shall ensure observance
          thereof. The procedure to be followed by him and the action to F
          be taken thereon is also left to him. Similar rules have also been'
          evolved in .United Kingdom. However, for the reasons given
          hereinbefore, the petitioners cannot seek to enforce the Co~e
          through the Court."

Even if the Government order is traced to have been issued under executive G
power of the State under Article 162, such a Code will not be enforceable
when the language used is not in mandatory tenns and they are intended
to be mere guidelines or instructions to the concerned persons in authority.
Therefore, as long as such a Code of Conduct is not enforceable in any
court oflaw and does not even provide what action could.possibly be taken H
                                                                                       /
                                                                                      .._
    124                 SUPREME COURT REPORTS [2003) SUPP. 6 S.C.R.

A   in case of breach by the Chief Minister, the prohibition contained therein
    is only having ethical or moral effect and any breach thereof cannot be
    treated to be unlawful or even illegal within the meaning of Section 43 IPC.
    To constitute a ground for civil action under Section 43, there must be a
    right in a party which can be enforced. It may be a breach of contract or
B   a claim for damages or some such similar right accruing under any law.
    There is no law which debars the Chief Minister from participating in a
    sale conducted by any Department of the Government or any of the
    Corporations or any public sector undertaking affording a cause for civil
    action especially when no fraud or illegal gain .is involved. Therefore, we
    are constrained to hold that the offence under the aforesaid provision has
C   not been established. In fact, there is nothing in the charge to indicate nor
    did the prosecution take a specific stand at any stage of the trial that the
    purchase of TANSI foundry property by A- I from the Government would
    furnish a ground for a particular civil action. The nature of civil action that
    could be initiated cannot be left to the guess work and the accused cannot
D   be expected to meet such case at this stage.

          In the view we have taken, it is not necessary to consider the further
    questions debated at the bar, namely, whether the prohibition extends to
    the property of Government Undertaking as well, whether the State can
E   legislate in respect of the conduct of Ministers and whether the expression
    'legally bound not to purchase' should be necessarily construed in the light
    of the definition of 'legally bound to do'. But, we would like to observe
    one thing-whether or not the word 'Government' in para 2(b) of th~ Code
    of Conduct includes Government Company or Undertaking, the spirit and
    intention behind the Code of Conduct set out in para 2(b) is apparently not
F   to maintain any such distinction. Whether appropriate language has been                 • t

    employed to give effect to such intention is a different matter.                        \,

           That A- I was a public servant and the properties were purchased
    by the firm in which she was a partner, would be insufficient to establish
G   a charge under Section 169 against her as the main ingredient of the
    aforesaid provision is not established. The High Court is justified in
    holding that the first respondent is not guilty of the offence under Section
    169 IPC and the other respondents not guilty of abetment.

          The next charge we have to deal with is one arising under Section
H 409 !PC. Criminal breach of trust has been defined under Section 405 IPC.
    R. S. SHARA THI v. J. JA YALALITHA [RAJENDRA BABU, J.] 125

For the offence of criminal breach of trust by a public servant the A
punishment is provided under Section 409 IPC. The properties in question
belongs to T ANSI, a corporation which is a separate and distinct entity
from the Government and the prope1ties are held by it as owner and has
complete control over the same except when the said prope1ties are to be
alienated, approval of the Government has to be obtained as provided under B
the A1ticles of Association of the said Corporation. In a case of this nature,
where there is no dominion over the prope1ties by a Chief Minister or a
Minister it cannot be treated as entrustment of the prope1ties creating a trust
which is an obligation annexed to the ownership of the properties and arises
out of the confidence reposed and accepted by the owner. Indeed there C
is no material in the whole case to come to the conCiusion that any such
trust has been or deemed to have been created in respect of the said
properties and that the relationship between A-1 and TANSI is one of
trustee and beneficiary. Therefore, the ingredients of Section 409 IPC are.
not attracted to the present case at all. There is absolutely no entrustment
of the properties in any manner, which allows a dominion over it except
                                                                                D
approving or disapproving, an act on the part of the Corporation either to o
sell or to alienate the properties. It cannot be said that a public servant
who holds a particular port folio and has an element of supervisory control
in certain matters, has a dominion over the property so as to exercise any
legal incidents attached to the right of ownership. Therefore, there was E
no entrustment of the said properties and it cannot be said that A-1 had
dominion over the said properties either as the Chief Minister or as the
Minister of Industries and in any case, the evidence does not establish the
ingredient of dishonest disposal or conversion of property for personal
use. Thus the charge under the aforesaid section is also not established F
as rightly held by the High Court.

      Though learned counsel wanted us to re-appreciate the evidence with
reference to the files of the Government and other material on record, we
refrain from doing so but have only broadly looked at facts adduced in G
evidence so as to judge whether in a proceeding under Article 136 of the
Constitution we should interfere with the order of acquittal. For the reasons
stated above, we think that none of the offences charged against the
accused are established. There is no ground to interfere with the order
under appeal. Hence, these appeals are liable to be dismissed.                H
     126               SUPREME COURT REPORTS [2003) SUPP. 6 S.C.R.

A           Before we part with the matter, it is necessary to notice certain
     aspects of the matter.

        Crime is applied to those acts, which are against social order and are
  worthy of serious condemnation. Garafalo, an eminent criminologist,
B defined 'crime' in terms of immoral and anti-social acts. He says that
   "crime is an immoral and harmful act that is regarded as criminal by
  public opinion because it is an injury to so much of the moral sense as
  is possessed by a community - a measure which is indispensable for the
  adaptation of the individual to society. " The authors of the Indian Penal
  Code stated that :-
c
             " .... We cannot admit that a Penal Code is by any means to be
             considered as a body of ethics, that the legislature ought to punish
             acts merely because those acts are immoral, or that, because an
             act is not punished at all, it follows that the legislature considers
D            that act as ,innocent. Many things which are not punishable are
             morally worse than many things which are punishable. The man
 •           who treats a generous benefactor with gross ingratitude and
             insolence deserves more severe reprehension than the man who
             aims a blow in passion, or breaks a window in a frolic; yet we
             have punishment for assault and mischief, and none for ingrati-
E            tude. The rich man who refuses a mouthful of rice to save a
             fellow-creature from death may be a far worse man than the
             starving wretch who snatches and devours the rice; yet we punish
             the latter for theft, and we do not punish the former for hard-
             heartedness."
F
          Though we have come to the conclusion that A-1 is not guilty of
  the offences with which she was charged, it is clear that the property
  belonging to public sector unde11akings was sold to firms of which A-1
  is a partner at a time when she held the Office of the Chief Minister. Under
G the articles of association of the public sector undertaking, there is a
  requirement that before the sale of property is effected approval of the
  government is needed and sale cannot be completed without such approval
  because such an act will be ultra vires the powers of the Board of Directors
  of the company. Such approval was readily given by the Government
H machinery, though on paper she remained out of picture.
    R. S. BHARATHI v. J. JAYALALITHA [RAJENDRA BABU, J.] 127

        Officers even holding small posts like a Railway Property Keeper A
or a Cattle Pound Keeper or a Process Nazir who is put in charge of the
sale of properties in a court· auction cannot purchase the prope1ties over
which they have control. In the present case, in view of the fact that
Government headed by the l st Respondent has to give permission in,
respect of the saie of property of these two companies, it certainly B
exercises powers over the same and thus there is conflict of interest.
Where there is conflict of interest law has always avoided such sales being
effected in favour of those who can jeopardise the fair outcome of the
transaction. Whatever may be our findings on the question of valuation
of the prope1ty whether it resulted in a pecuniary advantage to A-I or not, C
we are clear in our mind that if the officers and others become aware of
the fact that the Chief Minister of the State is interested in purchasing some
properties, the bureaucracy will be over-enthusiastic to see that the sale
goes through smoothly and at a price desired by such Chief Minister.
Though we can visualise such situation, such facts have to be established
by concrete evidence to be convicted in a criminal case and is hard or D
difficult to get. At any rate, it is plain that such conduct is opposed to the
spirit of the Code of Conduct ifnot its letter. Morally speaking, Can there
be one law for small officials of the Government and another law for the
Chief Minister? In matters of such nature, is the Code of Conduct meant
only to be kept as an 'ornamental relic' in a museum but not to be E
practised? These aspects do worry our conscience. Respondent No. l
in her anxiety to save her skin went to any length even to deny her signature
on documents which her auditor and other Government officials identified.

        Report leading to IPC ·makes it clear that criminal law merely
prescribes the minimum standards of behaviour, while in public life, those F
who hold high offices should not take shelter under the umbrella of
criminal law but stand by high probity. Further, criminal law is meant to
deal with criminals ordinarily, while Code of Conduct is observed as
gentlemen's agreement. Persons in public life, who are gentlemen, follow1
such Code instead of taking escape routes by resorting to technical pleas G
as arise in criminal cases. Persons in public life are expected to maintain
very high standards of probity and, particularly, when there is likely to be
even least bit of conflict of interest between the office one holds and the
acts to be done by such person, ought to desist himself from indulging in
the same. Such standards of behaviour were scrupulously observed in the H
    128                SUP,REME COURT REPORTS [2003] SUPP. 6 S.C.R.

A   earlier days after independence, but those values how now dwindled and
    instances of persons holding high elective offices indulging in self-
    aggrandisement by utilising Government prope11y or in distribution of the
    largesse of the Government to their own favourties or for certain quid pro
    quo are on the increase. We have to stroi:igly condemn such actions. Good
B   ethical behaviour on the part of those who are in power is the hallmark
    of a good administration and people in public life must perform their duties
    in a spirit of public service rather than by 'assuming power to indulge in
    callous cupidity regardless of self imposed discipline. Irrespective of the
    fact whether we reach the conclusion that A- I is guilty of the offences with
    which she is charged or not, she must atone for the same by answering
C   her conscience in the light of what we have stated not only by returning
    the property to TANSI unconditionally but also ponder over whether she
    had done the right thing in breaching the spirit of the Code of Conduct and
    giving rise to suspicion that rules and procedures were bent to acquire the
    public property for personal benefit, though trite to say that suspicion
D   however strong cannot take place of legal proof in a criminal case and
    take steps to expiate herself.

           In the result, we dismiss these appeals and special leave petition,
    subject to the observations made above.

E K.K.T.                                            Appeals/Petition dismissed.