Indicting former Chief Minister Jayalalithaa, albeit posthumously, of having criminally conspired with aide VK Sasikala to launder ill-gotten wealth, the Supreme Court on Tuesday set aside the Karnataka High Court’s acquittal of Sasikala and two co-accused in the 20-year-old disproportionate assets case.
The court said appeals filed by Karnataka government and others, including DMK leader K Anbazhagan, against Jayalalithaa stands abated with her death on December 5, 2016.
A Bench of Justices PC Ghose and Amitava Roy “restored in toto” the trial court’s conviction of Sasikala, J Elavarasi and VN Sudhakaran in September 2014, and ordered them to surrender forthwith. However, Sasikala’s lawyers may approach the Supreme Court seeking time to surrender on health grounds.
Even after Sasikala comes out after serving her four-year sentence, she will be disqualified to contest elections for the next six years as per the Supreme Court judgment in
The voluminous main judgement authored by Justice Ghose for the Bench held that the trial court’s conviction of the three accused – A2 to A4 – on September 27, 2014, has been restored in full, along with the consequential directions, including payment of fine and attachment of properties.
The trial judge, John Michael Cunha, had sentenced Sasikala, Elavarasi and Sudhakaran under Section 109 IPC read with Section 13 (2) of the Prevention of Corruption Act – abetment of criminal misconduct of a public servant – to simple imprisonment for a period of four years each and pay a fine of ₹10 crore each. In case of default, they would have to further suffer imprisonment for another year.
For the offence of criminal conspiracy leading to criminal misconduct of a public servant (Section 120 (B) IPC read with Section 13 (2)) of the Prevention of Corruption Act, all three were sentenced to simple imprisonment for six months and a fine of ₹10,000 each.
The trial court had sentenced Jayalalithaa to four years’ imprisonment and ₹100 crore in fine for corruption. If alive, she would have had to resign as chief minister and serve the remainder of her prison term, besides pay the fine.
The Supreme Court said Jayalalithaa did not accommodate Sasikala at Poes Garden out of some “philanthropic urge” but with cold-blooded calculation to keep herself secure from any legal complications which may arise from their criminal activities.
“We have analysed the evidence adduced by the parties and we come to the conclusion that A 1 to A 4 (Jayalalithaa, Sasikala, Elavarasi and Sudhakaran) entered into a conspiracy, and in furtherance of the same, A1 (Jayalalithaa), who was a public servant at the relevant time, had come into possession of assets disproportionate to her known sources of income during the check period (1991-96) and had got the same disbursed in the names of A2 to A4 and the firms and the companies involved to hold this on her behalf with a masked front,” the Supreme Court held.
The Supreme Court concluded that in 1991, the assets of the accused were valued at ₹2.01 crore. By 1996, the accused were worth a whopping ₹66.44 crore.
‘Matter of concern’Expressing “deep concern about the escalating corruption in the society”, Justice Roy observed that this case was “startling” in the way corruption was carried out by the accused persons with sheer impunity.
The court described Jayalalithaa as a mastermind who misused her public office, who “masked banking exchanges”, who acquired “vast tracts of land” for pittances and conspired with her co-accused at Poes Garden only to later “feign ignorance”.
The Supreme Court methodically gave reasons why all four accused were guilty of criminal conspiracy.
First was the fact that Jayalalithaa had executed a General Power of Attorney (GPA) in favour of Sasikala in respect of Jaya Publications. This was done, the court said, for Jayalalithaa to maintain a respectable distance from inflow and outflow of money meant for property acquisitions. The court said Jayalalithaa “knew fully well that Sasikala would be dealing with her funds credited to her account in Jaya Publications”.
Second, the court pointed out that the next proof of conspiracy was the speed and manner in which firms were created by the accused persons. “It has come in evidence that 10 firms were constituted in a single day. A2 and A3 started independent concerns and apart from buying properties, no other business activity was undertaken by them,” the Supreme Court noted.
Third, the court concluded that these shell entities were mere extensions of Namadhu MGR and Jaya Publications and they owed their existence to Jayalalithaa and Sasikala. All the business they did was buy property.
Further, the court said there was no use of Jayalalithaa pretending she was not aware of the activities of Sasikala and the two others at Poes Garden.
“Constitution of firms and acquisition of large tracts of land out of the funds provided by A1 (Jayalalithaa) indicate that all the accused had congregated at Poes Garden neither for social living nor had A1 allowed them free accommodation out of humanitarian concern,” Justice Ghose wrote.
The Supreme Court lauded the trial judge for his “investigative approach and exhaustive research regarding every piece of evidence in the case”.
On the other hand, the Supreme Court held that Justice CR Kumaraswamy in the Karnataka High Court had not even bothered to “appraise the evidence available” and stuck to whatever the income tax authorities found in favour of the accused persons.
As examples of the trial court’s reasonableness in appreciating the evidence, the Supreme Court pointed how Judge Cunha had excluded a sum of ₹32 lakh the prosecution pinned on the accused for purchase of sarees.
It highlighted that despite prosecution’s objections, the trial court had reduced the value of gold and diamonds which came under scanner to ₹2 crore. It had toned down Sudhakaran’s wedding expenses by over 50 per cent of what the prosecution had cited. Further, the trial court had discounted the value of constructions by depreciating it by 20 per cent.
The Supreme Court dismissed the High Court finding. “In our opinion, the percentage of disproportionate assets as 8.12 per cent as computed by the High Court is based on completely wrong reading of the evidence on record compounded by incorrect arithmetical calculations,” Justice Ghose held.
Legal questionsOn the legal point whether Sasikala and the two others could be punished for corruption after the death of Jayalalithaa, the sole public servant in the case, the Supreme Court referred to its 2014 judgment in State through CBI versus Jitender Kumar Singh which held that the death of a public servant does not extinguish the corruption case against the other private accused.
On the second legal question on how private citizens like Sasikala can be prosecuted for public corruption, the Supreme Court referred to Judge Cunha’s conclusion.
“The trial court correctly held in this matter that private individuals can be prosecuted on the ground that they had abetted the act of criminal misconduct falling under Section 13 (1) (e) of the 1988 Act,” the Supreme Court said.