# Scope of 10% Disproportionate Assets threshold and burden of proof under PC Act

- Link: https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/
- Published: 2026-10-30T14:31:17+00:00
- Author: Ramprakash Rajagopal

Contents

 * [Appellant and impugned order challenged](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#appellant-and-impugned-order-challenged)
 * [Factual matrix](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#factual-matrix)
 * [Other courts verdicts](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#other-courts-verdicts)
 * [Core legal arguments of appellant vs respondent](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#core-legal-arguments-of-appellant-vs-respondent)
 * [Ratio Decidendi](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#ratio-decidendi)
 * [Directions issued](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#directions-issued)
 * [Important Paragraph](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#important-paragraph)
 * [No hard and fast rule on no prosecution if the excess is less than ten per cent](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#no-hard-and-fast-rule-on-no-prosecution-if-the-excess-is-less-than-ten-per-cent)
 * [If the excess was comparatively small it would be right to hold that assets found in possession were not disproportionate to his known sources of income u/s 5(3)](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#if-the-excess-was-comparatively-small-it-would-be-right-to-hold-that-assets-found-in-possession-were-not-disproportionate-to-his-known-sources-of-income-us-53)
 * [Criminal misconduct explained](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#criminal-misconduct-explained)
 * [What does the prosecution legally require to establish initially in disproportionate assets cases?](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#what-does-the-prosecution-legally-require-to-establish-initially-in-disproportionate-assets-cases)
 * [When will the burden shifts to the accused?](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#when-will-the-burden-shifts-to-the-accused)
 * [Section 13(1)(e) PC Act](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#section-131e-pc-act)
 * [Conclusion](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#conclusion)
 * [Appellant failed to render a satisfactory explanation to the disproportionate assets](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#appellant-failed-to-render-a-satisfactory-explanation-to-the-disproportionate-assets)
 * [Resources](https://section1.in/scope-of-10-disproportionate-assets-threshold-and-burden-of-proof-under-pc-act/#resources)

**V. Gopalakrishnan v. The State of Kerala – Criminal Appeal No. 5399 of 2025 – 
2026 INSC 1172 – October 28, 2026 – Sanjay Kumar, J. and Sanjeev Sachdeva,J.**

[https://api.sci.gov.in/supremecourt/2025/14061/14061_2025_8_1502_75658_Judgement_28-Oct-2026.pdf](https://api.sci.gov.in/supremecourt/2025/14061/14061_2025_8_1502_75658_Judgement_28-Oct-2026.pdf)

##### **Appellant and impugned order challenged**

The appellant, who joined government service as a Lower Division Clerk in 1971 and
rose to Sub Registrar in 1993, challenged the High Court order dated 29.01.2025 
in Criminal Appeal No. 1937 of 2009, which confirmed his conviction under Section
13(2) read with Section 13(1)(e) of the [Prevention of Corruption Act](https://section1.in/terrorist-act-bail-is-a-fundamental-right-under-article-21-of-the-constitution-even-for-unlawful-activities-prevention-act-1967-shoma-kanti-sen/),
1988, but partly allowed the appeal by taking a lenient view of the procedural delay,
age, and trauma to reduce the sentence from two years to one year of rigorous imprisonment
and the fine from Rs. 5,50,000/- to Rs. 2,00,000/- with a default [sentence](https://section1.in/appreciation-of-the-quantum-of-sentence-is-explained/)
of three months. [paras 1, 2].

##### **Factual matrix**

An FIR was registered on 15.01.2001 alleging that while serving as a [public servant](https://section1.in/sanction-manufacturing-or-fabrication-of-public-documents-and-records-cannot-be-a-part-of-the-official-duty-of-a-public-servant-hence-sanction-not-required/)
between 01.01.1993 and 16.01.2001, the accused accumulated assets disproportionate
to his known sources of income. The prosecution tabulated basic statements establishing
beginning assets of Rs. 1,93,898.26, ending assets of Rs. 12,37,720.00, income during
the check period of Rs. 10,12,117.20, expenditures of Rs. 4,93,424.00, and likely
savings of Rs. 5,18,693.00, arriving at disproportionate assets of Rs. 5,25,129.00,
which constituted an excess of 51.88% over the earned income and significantly exceeded
the permissible 10% threshold. [paras 2, 3, 4, 5, 6]

##### **Other courts verdicts**

The [Special Judge](https://section1.in/p-c-act-special-judge-discharge-shall-be-u-s-227-cr-p-c-and-not-u-s-239-cr-p-c/),
by judgment dated 27.08.2009 in Complaint Case No. 40 of 2005, convicted the accused
under Section 13(2) read with Section 13(1)(e) of the [Prevention of Corruption Act](https://section1.in/prevention-of-corruption-once-the-undue-advantage-if-proved-court-is-entitled-to-raise-the-presumption-under-this-act/),
1988, sentencing him to two years of rigorous imprisonment and a fine of Rs. 5,50,000/-.
The High Court, via judgment dated 29.01.2025, affirmed the conviction upon finding
the documentary proof unimpeachable, but reduced the substantive [sentence to one year of rigorous imprisonment and the fine](https://section1.in/sentencing-fine-forcing-the-accused-to-pay-duplicate-fines-for-the-same-sentence-would-be-amount-to-double-punishment/)
to Rs. 2,00,000/- due to delay and the appellant’s age. [paras 1, 8, 11, 12]

##### **Core legal arguments of appellant vs respondent**

The appellant argued that the prosecution’s case rested purely on speculative estimations
rather than actual evidence, contending that his family’s household expenses were
incorrectly computed at Rs. 1,968.96 per month using agricultural consumer price
indices instead of his claimed maximum of Rs. 1,200 per month, that the commercial-
cum-residential building construction was valued excessively at Rs. 8,59,153/- instead
of his actual expenditure of Rs. 6,69,000/- recorded in a seized notebook, and that
legitimate salary receipts, Chit fund differences, and GPF loans were improperly
omitted; conversely, the respondent state argued that the foundational facts were
fully substantiated through [documentary evidence](https://section1.in/fir-is-a-public-document-and-also-a-dying-declaration-and-hence-it-shall-be-treated-as-substantive-piece-of-evidence-and-admissible-u-s-321-evidence-act-1872/),
official schedule rates, and testimony from economic and engineering officials, 
whereas the appellant failed to discharge his statutory burden under Section 106
of the Evidence Act/Section 109 of the BSA, with the High Court noting that even
conceding the appellant’s claimed deductions on demurrer, the disproportionate assets
still exceeded 26% to 33% of known income. [paras 8, 9, 10, 11, 13, 14, 15, 17, 
18, 20, 29]

##### **Ratio Decidendi**

In prosecutions under Section 13(1)(e) of the Prevention of Corruption Act, 1988,
the expression “known sources of income” strictly refers to lawful sources reasonably
ascertainable and known to the prosecution upon lawful investigation, rather than
every undisclosed or hypothetical source subsequently asserted by the accused; once
the [prosecution proves foundational](https://section1.in/in-pocso-cases-section-29-comes-into-play-only-after-prosecution-proves-the-foundational-facts/)
disproportion, the investigating agency is not bound to conduct open-ended or roving
inquiries into undeclared avenues, and the evidentiary burden shifts squarely to
the public servant under Section 106 of the Evidence Act (Section 109 of the Bharatiya
Sakshya Adhiniyam) to satisfactorily and credibly account for the excess from legitimate
resources. [paras 16, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28]

##### **Directions issued**

The [Supreme Court](https://section1.in/burden-of-proof-public-prosecutor-while-explaining-the-principles-of-106-iea-in-criminal-cases-honble-supreme-court-has-addressed-the-government-to-appoint-skilled-lawyers-as-public-prosec/)
vacated the interim bail granted to the appellant on 28.03.2025 and directed him
to surrender before the concerned Trial Court within two weeks to undergo the remaining
sentence.

##### **Important Paragraph**

##### **No hard and fast rule on no prosecution if the excess is less than ten per cent**

6. In the case of the Appellant, as per the computations produced, the Value of 
Assets acquired during the check period was assessed as Rs. 10,43,822.00. Likely
savings during the check period were assessed at Rs. 5,18,693.00. Thus, the Disproportionate
Assets computed were Rs. 5,25,129.00. i.e. 51.88% of the income of the [Appellant and his family members](https://section1.in/dowry-death-complainant-displayed-honesty-by-making-allegations-only-against-the-appellant-and-not-implicating-other-family-members-unnecessarily/)
during the check period, which is much beyond the 10% threshold laid down by this
Court in Krishnanand Agnihotri versus State of Madhya Pradesh. Though, in Krishnanand
Agnihotri it has been held that in a case of possessing disproportionate assets,
an excess of less than ten percent would not justify application of the presumption,
but it does not lay down a hard and fast rule that in all cases where the excess
is less than ten percent, there can be no prosecution. It would [depend on facts and circumstances](https://section1.in/sentencing-policy-depend-upon-facts-and-circumstances/)
of each case. However, in the [present case](https://section1.in/how-sanctioning-authority-shall-examine-the-case-presented/),
the disproportionate assets assessed are in excess by over 50% of the income.

##### **If the excess was comparatively small it would be right to hold that assets found in possession were not disproportionate to his known sources of income u/s 5(3)**

7. This Court in B.C. Chaturvedi versus Union of India, while referring to Krishnanand
Agnihotri (supra), wherein this Court had held that if the excess was comparatively
small (it was less than 10% of the total income in that case), it would be right
to hold that the assets found in the possession of the accused were not disproportionate
to his known sources of income raising the presumption under sub-section (3) of 
Section 5, went on to hold that said principle was evolved by this Court to give
benefit of doubt, due to inflationary trend in the appreciation of the value of 
the assets and the benefit thereof (10%) was the maximum and if the percentage began
to rise in each case, it would extended till it reached the level of incredulity
to give the benefit of doubt. It thus declined to extend the principle of deduction
beyond 10% in calculating disproportionate assets of a delinquent officer.

##### **Criminal misconduct explained**

16. In terms of Section 13 (1) (e) of the Act, if the public servant has, at any
time during the period of his office, been in possession of pecuniary resources 
or property disproportionate to his known sources of income, for which he cannot
satisfactorily account, he is said to have committed the [offence of criminal](https://section1.in/wrong-a-wrongful-contract-may-constitute-both-civil-wrong-and-criminal-offence/)
misconduct.

19. This Court in P. Nallamal & Anr. versus. State, held that “the two postulates
must combine together for crystallization into the offence, namely, possession of
property or resources disproportionate to the known sources of income of public 
servant and the inability of the public servant to account for it. Burden of [proof regarding the first limb is on the prosecution](https://section1.in/prosecution-not-proved-the-murder-case-beyond-reasonable-doubt/)
whereas the onus is on the public servant to prove the second limb……… [Emphasis 
supplied].

##### **What does the prosecution legally require to establish initially in disproportionate assets cases?**

> 22. **In a prosecution for possession of disproportionate assets, the prosecution
> is required, in the first instance, to establish the foundational facts, namely,
> the known sources of income of the public servant during the check period and 
> the assets, pecuniary resources, and expenditures attributable to him during the
> same period**. The expression “known sources of income” does not refer to sources
> known merely to the accused, but to sources known to the prosecution upon a thorough
> and lawful investigation. Once the prosecution discharges this initial burden 
> and demonstrates that the assets possessed by the public servant are disproportionate
> to his known sources of income, a prima facie case stands established.

23. Law does not [cast](https://section1.in/if-a-member-of-s-c-s-t-converts-to-christianity-he-is-no-longer-sc-st-since-christianity-does-not-recognise-a-hierarchical-caste-based-system/)
an impossible burden upon the prosecution to negate every hypothetical source from
which the accused may claim to have derived income. Such an interpretation would
render the statutory provision unworkable and defeat its very object. The prosecution
is only required to establish, on the basis of material collected during investigation,
the income legitimately attributable to the public servant and the extent of the
assets found in his possession. Where a disproportion emerges from such exercise,
the evidentiary burden shifts to the accused to account for the same.

24. The rationale underlying this principle is that the source, nature, and mode
of acquisition of any undisclosed income, asset, or pecuniary resource are matters
peculiarly and exclusively within the knowledge of the public servant. Such facts
are not ordinarily accessible to the prosecution and are incapable of being established
except through disclosure by the person concerned. Consequently, any income or asset
not reflected in the disclosed or known sources of income falls within the realm
of the accused’s special knowledge. The statutory scheme, read in conjunction with
the principles underlying Section 109 of the Bharatiya Sakshya Adiniyam ([Section 106 Evidence Act](https://section1.in/in-npds-cases-confession-is-hit-under-section-25-indian-evidence-act/),
1872), places the obligation upon the public servant to furnish a satisfactory and
credible explanation regarding the existence and acquisition of such assets.

##### **When will the burden shifts to the accused?**

25. Once the prosecution establishes the disproportion between the assets possessed
and the known sources of income, the burden squarely rests upon the accused to demonstrate,
through cogent and reliable material, that the assets in question were acquired 
from lawful and legitimate sources. In the absence of such explanation, the prosecution
cannot be faulted for its inability to establish facts which lie exclusively within
the [knowledge](https://section1.in/as-per-section-21-pocso-act-only-those-who-received-credible-information-directly-could-be-prosecuted-for-failure-to-report-and-not-all-the-teachers-or-office-bearers-of-the-institution-also-no-suppre/)
of the accused himself.

##### **Section 13(1)(e) PC Act**

28. Explanation to Section 13(1)(e) of the PC Act, therefore, embodies a legislative
recognition of this practical reality. It relieves the [prosecution of the obligation to undertake an endless search](https://section1.in/acquittal-ndps-search-before-the-police-is-not-the-third-option-and-the-prosecutions-claim-of-using-electronic-weighing-scale-is-also-questionable/)
for every possible source of income and places the corresponding responsibility 
upon the public servant to disclose and substantiate any source relied upon to explain
the assets found in his possession. Once disproportionate assets are shown with 
reference to the known sources of income established during investigation, it becomes
incumbent upon the accused to furnish a satisfactory, credible, and verifiable explanation
for the excess assets. Failure to do so necessarily entitles the [Court](https://section1.in/in-exceptional-circumstances-the-court-may-grant-anticipatory-bail-to-an-absconder-but-a-co-accuseds-acquittal-does-not-ipso-facto-entitle-him-to-a-b-relief/)
to draw an adverse inference against the accused and to hold that the disproportion
remains unexplained.

##### **Conclusion**

##### **Appellant failed to render a satisfactory explanation to the disproportionate assets**

29. As noticed hereinabove, Prosecution has established that the Appellant accumulated
assets disproportionate to his known source of income by over 51%. Even if the explanation
given by the Appellant were to be taken on a demurrer, the disproportionate assets
exceed 26% of his known sources of income. Looked at from any angle, Appellant has
failed to render a satisfactory explanation to the disproportionate assets accumulated
during the check period.

30. We find no infirmity in the view taken by the [Trial Court in holding the Appellant](https://section1.in/reversal-of-acquittal-appellate-court-cannot-reverse-the-acquittal-on-fresh-appreciation-of-evidence-and-without-recording-any-illegality-error-of-law-or-of-fact-in-the-trial-court-judgment/)
guilty of the offence under Section 13(2) read with Section 13(1)(e) of the PC Act
and the High Court in affirming the same. There is no merit in the appeal. The same
is accordingly dismissed. Consequently, the interim [bail granted to the Appellant by order](https://section1.in/pmla-section-88-cr-p-c-an-order-accepting-bonds-under-section-88-cr-p-c-from-the-accused-does-not-amount-to-a-grant-of-bail-a-detailed-discussion-on-arrest-summons-warrant-bail-and-bond-under/)
dated 28.03.2025 is vacated. He is granted two weeks’ time to surrender before the
concerned [Trial Court](https://section1.in/22786-2/) to undergo the remaining sentence.

##### **Resources**

 * **Judgments Cited**
    - _Krishnanand Agnihotri v. State of Madhya Pradesh_, (1977) 1 SCC 816 – Held
      that an excess of disproportionate assets of less than 10% of total income
      may not justify applying the presumption of criminal misconduct, though it
      is not an inflexible rule for all cases.
    - _B.C. Chaturvedi v. Union of India_, (1995) 6 SCC 749 – Clarified that the
      10% deduction rule evolved in _Krishnanand Agnihotri_ is the maximum leeway
      allowed to accommodate inflationary asset appreciation and cannot be extended
      indefinitely.
    - _P. Nallammal v. State_, (1999) 6 SCC 559 – Reaffirmed the twin postulates
      of the offence, placing the burden of proving disproportion on the prosecution
      and the onus of satisfactorily accounting for it on the public servant.
    - _State of [Tamil Nadu](https://section1.in/as-per-tamil-nadu-liquor-possession-for-personal-consumption-rules-1996-a-person-is-entitled-to-possess-4-5-litres-of-indian-made-foreign-spirits/)
      v. R. Soundirarasu_, (2023) 6 SCC 768 – Held that “known sources of income”
      means sources known to the prosecution through lawful intimation, relieving
      [investigators from conducting roving inquiries](https://section1.in/if-the-accused-resides-outside-the-jurisdiction-there-need-not-be-a-separate-inquiry-or-investigation-under-section-202-crpc-for-complaints-filed-by-public-servants/)
      into unstated sources.
    - _State of Madhya Pradesh v. Awadh Kishore Gupta_, (2004) 1 SCC 691 – Emphasized
      that the accused must “satisfactorily” account for disproportionate wealth
      by presenting an explanation that is worthy of judicial acceptance.
    - _N. Ramakrishnaiah v. State of A.P._, (2008) 17 SCC 83 – [Established that the first part of the Explanation to Section](https://section1.in/dowry-death-since-witnesses-stating-the-dowry-demand-only-before-the-court-significant-omission-would-not-establish-section-304b-ipc/)
      13(1)(e) strictly encompasses income received from legal or lawful sources.
 * **[Acts and Sections Involved](https://section1.in/deprecated-practice-involving-the-relatives-of-husband-for-offence-under-section-498a-ipc-and-section-4-of-dowry-prohibition-act-1961/)**
    - Prevention of Corruption Act, 1988
       * Section 13(1)(e) – Criminal misconduct by a [public servant possessing pecuniary resources or property](https://section1.in/sanction-not-necessary-for-the-public-servants-who-have-conspired-and-issued-patta-in-favour-of-some-other-person-other-than-the-property-owner/)
         disproportionate to known sources of income without a satisfactory account.
       * Section 13(2) – [Punishment for the offence of criminal](https://section1.in/disposal-of-criminal-cases-more-than-3-years-involving-offences-punishable-with-imprisonment-of-upto-3-years-pending-at-trial-appeal-or-revision-stage/)
         misconduct by a public servant.
    - Indian [Evidence Act](https://section1.in/fact-discovered-and-recovery-mahazar-witnesses/),
      1872 / Bharatiya Sakshya Adhiniyam, 2023
       * [Section 106 of the Evidence Act](https://section1.in/fact-discovered-and-recovery-mahazar-witnesses/),
         1872 / Section 109 of the Bharatiya Sakshya Adhiniyam, 2023 – Burden of
         proving a fact especially within the knowledge of any person.

### Further Study

 * [Subject Study on Prevention Of Corruption Act 1988](https://section1.in/subject-study-on-prevention-of-corruption-act-1988/)
 * [Prevention of Corruption: Once the undue advantage is proved court is entitled to raise the presumption under this act](https://section1.in/prevention-of-corruption-once-the-undue-advantage-if-proved-court-is-entitled-to-raise-the-presumption-under-this-act/)