The key argument of the Karnataka High Court that led it to set aside the conviction of former Tamil Nadu chief minister J Jayalalithaa and her three associates is that the prosecution and the trial court had wrongly estimated the illegal wealth of the accused as being Rs 53.60 crore while convicting them to four years in prison under charges of corruption.
The High Court ruled that Jayalalithaa and her associates had accumulated only the “relatively small’’ amount of Rs 2.82 crore of wealth disproportionate to their known sources of income.
The single-judge bench of Justice C R Kumaraswamy ruled that the trial court convicted Jayalalithaa and others by putting the onus on the accused to disprove charges of accumulation of disproportionate wealth rather than asking the prosecution to prove beyond doubt the allegations of benami transactions.
The judge also ruled that the trial court had erred in not hearing applications filed by nearly 32 companies whose properties were attached during the trial of the case as being benami properties of Jayalalithaa and for considering bank loans of these companies as her income.
During the trial of the case, special court judge John Michael Cunha had ruled that Jayalalithaa and her associates acquired 150 pieces of property at a cost of Rs 20.07 crore; spent Rs 22.53 crore on renovating or refurbishing buildings they owned; bought gold and diamonds worth Rs 2.51 crore and staged a wedding for her adopted son Sudhakaran at a cost of Rs 3 crore. The special court found that Jayalalithaa and her associates accumulated Rs 53.60 crore of wealth between 1991-96 against a known income of Rs 9.91 crore.
During the trial, the special court had concluded that a maze of 32 companies was created or bought by Jayalalithaa’s associates V K Sasikala, V N Sudhakaran and J Illavarasi for the sole purpose of siphoning money illegally earned by Jayalalithaa to buy nearly 3000 acres in Tamil Nadu.
The Karnataka High Court, however, disagreed saying there was absence of evidence to link Jayalalithaa to the firms and ruled that the presence of her associates as directors in the firms was not sufficient to prove she was also part of a conspiracy.
Most importantly, the High Court ruled that the trial court and prosecution had erred in considering bank loans to the tune of Rs 24.17 crore as an income of the companies linked to Jayalalithaa’s associates which was used to purchase property to the tune of Rs 20.07 crore. The value of the properties owned was also only around Rs 6.24 crore and not Rs 20.07 crore, the High Court said.
While the trial court had assessed that Jayalalithaa had spent Rs 22.53 crore to refurbish her home, the High Court ruled that only around Rs 5.10 crore was spent on new or additional construction.
“Everything assessed is done more or less on guesswork rather than actual price prevailing during the check period,’’ the high court said.
One piece of evidence that the special judge had taken into consideration to assess the quantum of illegal income of Jayalalithaa was Rs 14 crore of unaccounted deposits of cash into the bank accounts of a newspaper, Namadhu MGR, operated by a firm with Jayalalithaa as a partner.
The High Court over-ruled this saying this was accumulated through collection of deposits of Rs 18,000 made by each of an estimated 9000 subscribers of the newspaper.
The High Court also found fault with the assessment that Jayalalithaa spent Rs 3 crore on the wedding of Sudhakaran where musicians A R Rahman and Mandolin Srinivas were among the performers. “Just because Accused No 1 was Chief Minister at that time, we cannot saddle all marriage expenses on her part. Relying on income tax returns towards expenditure of marriage, I consider that she has spent about Rs 28,68,000,’’ the High Court ruled.
In the final assessment, the High Court said that Jayalalithaa and her associates had assets worth only Rs 37.59 crore against a total income of Rs 34.76 crore with disproportion of about Rs 2.82 crore. “The percentage of disproportionate assets is 8.12%. It is relatively small. In the instant case, the disproportionate asset is less than 10% and it is within permissible limit,’’ the court said while ordering the acquittal of Jayalalithaa and consequently her associates.