NEW DELHI: The Supreme Court has ruled that merely possessing gold within the prescribed limit does not exempt an accused in a disproportionate assets (DA) case from explaining its source.
The apex court observed that government circulars and other documents permitting the possession of gold do not, by themselves, establish that the property was acquired through legitimate income or sources.
A bench of Justices K V Viswanathan and Arun Palli accepted the appeal of the Bihar government and set aside the order of the Patna High Court.
The HC had earlier quashed the cognisance taken by the lower court against the accused woman in the DA case.
According to the case, on May 11, 2015, an FIR (First Information Report) was registered at the Vigilance Police Station in Bihar against Phoolpari Kumari and her husband on charges of possessing assets disproportionate to their income.
After the completion of the investigation, on July 29, 2020, a chargesheet was filed only against accused, Phoolpari Kumari.
Thereafter, on January 28, 2021, the Special Vigilance Court in Patna took cognisance of the case.
The woman had challenged the cognisance order in the Patna HC.
Her argument -- before the HC -- was that as per the Income Tax Department's instructions dated May 11, 1994 and the Central Board of Direct Taxes (CBDT) press release dated December 1, 2016, a married woman can keep 500 grams, an unmarried woman 250 grams and a man 100 grams of gold.
It was argued on behalf of the woman that she did not possess gold beyond the prescribed limit; therefore no action could be taken against her.
The Patna HC accepted this argument, saying that the woman did not have more than 750 grams of gold and the Vigilance Department had made a mistake in calculating the weight of gold.
On this basis, the HC quashed the criminal proceedings against her. Subsequently, the Bihar government challenged the HC's decision in the Supreme Court.
On behalf of the State government, it was argued that eligibility to keep gold and accounting for the source of that gold in a corruption case are two different things.
The bench, terming the Patna HC's reasoning as completely unjustified, set aside its order of May 14, 2026, and restored the cognizance taken by the Special Vigilance Court on January 28, 2021 and directed that the trial proceedings will continue from that stage.
However, the SC has given the woman liberty to raise other legal arguments before the trial court as per law.
The court clarified that those arguments will be decided without being influenced by the observations of the SC and HC.