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How the courts tracked the cash flow in Poes Garden

February 14, 2017 07:48 pm | Updated November 28, 2021 09:54 pm IST

File photo of Jayalalithaa at her Poes Garden residence.

File photo of Jayalalithaa at her Poes Garden residence.

The Supreme Court on Tuesday upheld a Trial Court’s verdict convicting AIADMK’s interim general secretary V.K. Sasikala, her relatives V.N. Sudhakaran and J. Ilavarasi, of criminal conspiracy to acquire and possess assets grossly disproportionate to their known sources of income.

Since the main accused in the case, former Tamil Nadu Chief Minister Jayalalithaa, has died, the charges against her have abated. But the conviction and sentence against the accused have been upheld, and they have to surrender before the Trial Court in Bengaluru and serve out the remainder of sentence awarded to them.

The Trial Court had taken into consideration valuation of income and expenditure and assets from July 1, 1991 to April 30, 1996. The case of the prosecution was that, as on July 1, 1991, Jayalalithaa had assets in her name and in the name of Sasikala, who was living with her at her Poes Garden residence in Chennai, to the extent of Rs.2,01,83,957, including properties acquired in the name of Jaya Publications, Sasi Enterprises and Namadhu MGR, which had been floated by Jayalalithaa and Sasikala as partners. But, after July 1, 1991, there was sudden spurt in the acquisition of assets, and during this period, Jayalaithaa and Sasikala floated several firms in the names of Sasikala, Sudhakaran and Elavarasi.


Here are the notable facts from the judgment, upholding the Trial Court’s findings

There were no business activities at all at many of the firms, and in others the activities were more in the nature of acquiring assets like lands, machinery, building etc., which were not production oriented. The fact that in a single day, 10 such firms were constituted with identical features was reiterated. No income-tax returns were filed by these firms, nor was there any assessment for commercial tax done with respect to the business of these firms. Jayalalithaa also did not file her income-tax returns for the assessment years 1987-88 to 1992-93 till November, 1992 when this issue was raised in Parliament.

The Trial Court noted that at the commencement of the period there were hardly 10 to 12 bank accounts standing in the names of Jayalalithaa and Sasikala but thereafter 50 accounts mushroomed.

An amount of Rs.13,55,28,685.50 in all, had been deposited by cash through pay-in-slips in the current accounts of Sasikala, Sudhakaran and Elavarasi and the firms, not matching with their income. Apart from being in large amounts -- varying from above Rs.50,000 to Rs.33,70,000 – on every occasion, the deposits were also made quite frequently. The pay-in-slips provided in support of such cash deposits even disclose deposits of various amounts in different accounts on the very same date.

The Trial Court noted that the absence of deposits in the account of Jayalaithaa proved that the wealth in circulation had its origin in her coffers. Not only are cash deposits of such huge amounts out of the ordinary, but the mode of deposit -- by pay-in-slips through a selected few and at regular frequencies -- pointed to laundering of gigantic amounts of unaccounted cash.

There were frequent transfers of amounts between accounts to facilitate illegal acquisition of assets. The huge quantum of such assets, when viewed in the context that Jayalalithaa was holding the office of Chief Minister and that Sasikala, Sudhakaran and Elavarasi were living under the same roof as Jayalalithaa without sufficient means to acquire the assets in their names, established that the assets were actually acquired by Jayalalithaa.

Evidence submitted in the trial showed that a member of staff at Jayalaithaa’s house in Poes Garden used to fill in challans at the direction of Sasikala, and remitted money into various bank accounts on her instructions. The amounts used to be dispatched in suit cases and bags through domestic servants.

The Trial Court took note of the fact that Jayalalithaa, as partner in Jaya Publications, had executed a general power of attorney in favour of Sasikala. Though Jayalaithaa’s defence claimed that such a power of attorney was to give Sasikala a free hand in the management of Jaya Publications and that she was unaware of transactions carried on by her, the Trial Court held that by the execution of such power of attorney, in law, Jayalalithaa rendered herself liable for all acts and deeds of Sasikala.

Not only did Sasikala and Sudhakaran start independent concerns in their names, even defunct companies were purchased/taken over by the respondents. However, none of these firms or companies actually carried on any business except acquiring huge properties. Referring to the fact that at the time of opening of the bank accounts of these firms/companies, none of these entities had any independent resources, the Trial Court deduced that these firms/companies were nothing but extensions of Namadhu MGR and Jaya Publications and owed their existence to the benevolence of Jayalalithaa and Sasikala for continued sustenance.

The joint residence of all the accused persons also was a factor contributing to the charge of conspiracy and abetment. The free flow of money from one account to the other of the respondents, and the companies also proved beyond reasonable doubt that all the accused persons had actively participated in the conspiracy to launder the ill-gotten wealth of Jayalalithaa for purchasing properties in their names.

The Trial Court said that evidence was provided by Sub Registrar, North Beach, Sub Registrar’s Office and Radha Krishnan, Horticulture Officer, that they were called to Poes Garden and on the instructions of higher officers, and they obliged Jayalalithaa by relaxing the rules in the registration of large number of documents and also overlooked the fact that properties were undervalued. This showed the involvement of Jayalalithaa in these transactions. Registering authorities had even permitted the registration of six documents without incorporating the names of the purchasers.

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