Spouse's Independent Income Can't Be Clubbed With Public Servant's Income To Launch Disproportionate Assets Case: MP High Court

The Madhya Pradesh High Court recently quashed a sanction order issued by tax authorities to prosecute a woman's husband–a public servant–under the Prevention of Corruption Act, by including the wife's independent income as an advocate in her husband's income. The division bench of Justice Vivek Kumar Singh and Justice Ajay Kumar Nirankari held that the investigating agency and the sanctioning authority erred in ignoring the independent income of the wife on which she had been paying taxes. It said:"In the present case, it is quite discernible that since the petitioner No.1 (wife) has clearly justified the amount claimed as the income from her professional work, the Income Tax Returns as well as income from farm, receipt from respective Mandi justifying sales and the agricultural equipment unearthed during the raid, all of it points towards only one conclusion that if the professional and subsequent agricultural income petitioner No.1 is taken into account in that case, the sanctioning authority ought not to have granted sanction and nipped the matter in the bud itself"It referred to the term "known sources of income” which is income duly disclosed in accordance with Rule 19 Madhya Pradesh Civil Service (Conduct) Rules, 1965, vis-a-vis Income Tax Returns which have already been filed. The court said that the income which is formally intimated to the department under the applicable service rules and substantiated through statutory tax filings, constitutes “known” and legitimate income in the eyes of law. "this Court is of the view that the Investigating Agency and the sanctioning authority had wrongly denied to recognize petitioner No.1's independent professional identity and treated her merely a spouse of government servant and inclusion of her income in the income of petitioner No.2 is unreasonable and not a correct assessment of income of petitioner No.2, as the sanctioning authority was required to apply its mind to the entire material placed before him and on examination thereof, was required to reach a conclusion fairly, objectively and consistent with public interest as to whether or not in the facts and circumstances, sanction could be accorded to prosecute the government servant". The petitioners-the wife an advocate and her husband who is a public servant had challenged an order of Commercial Tax Department granting sanction to prosecute the petitioner no.2–husband, under Sections 19(1)(b) and (c) of the Prevention of Corruption Act.The case was registered for criminal misconduct by a public servant under Section 13(1)(b) of the PC Act and Criminal Conspiracy (Section 120-B) of the IPC.A complaint was lodged by Kamta Prasad following which a search operation was conducted by the Lokayukt at the residential and official premises of the husband. During the inquiry, the Lokayukt compiled data relating to the assets and expenditure of the petitions from September 4, 1998, to October 15, 2019 and concluded that their income exceeded their known sources of income by approximately 88.20%. Based on these recommendations, the Department granted a sanction. The petitioners assailed the sanction order as arbitrary and mechanical, contending that both the investigating agency and the sanctioning authority had wrongly excluded the legitimate income of the wife, who was an advocate. The court noted that the wife's Income Tax Returns constituted valid and reliable proof of income, particularly in light of the fact that the statutory period for maintaining professional records under Rule 6F of the Income Tax Rules had already elapsed. The bench further observed that the sanctioning authority failed to appreciate that the wife's professional and agricultural income was legitimate, duly disclosed, and verified during the investigation. The bench observed that the appropriate authority, while granting sanction, cannot take into consideration irrelevant facts or extraneous consideration which are not relevant for passing said order. It emphasized; "An order granting or refusing sanction must be preceded by application of mind on the part of appropriate authority on material placed before it. While granting sanction, the authority can neither take into consideration an irrelevant fact nor can it pass an order on extraneous considerations not germane for passing a statutory order". Accordingly, the bench allowed the petition and quashed the sanction order and consequent proceedings. Case Title: Meenakshi Khare v State of Madhya Pradesh [WRIT PETITION NO.33484 of 2025]Click here to read/download the Order

Spouse's Independent Income Can't Be Clubbed With Public Servant's Income To Launch Disproportionate Assets Case: MP High Court

Jayanti Pahwa

Tags