A scam of just Rs 66 crore seems like peanuts in this day and age, when cases regularly hit the Rs 1 lakh crore mark in losses to the exchequer. So what if you brought that number down to something even smaller, like, say, Rs 2 crore? That's what appears to have happened in former Tamil Nadu Chief Minister J Jayalalithaa's case. The Karnataka High Court on Monday acquitted Jayalalithaa of all charges in a corruption case dating back to the 1990s, saying that the disproportionate assets it was able to make out were simply not big enough to be considered criminal.

"It is well-settled law that according to Krishnanand Agnihotri’s case, when there is disproportionate asset to the extent of 10%, the accused are entitled for acquittal," Justice CR Kumaraswamy wrote in the order overturning Jayalalithaa's conviction. "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. Therefore, accused are entitled for acquittal."

Essentially, the former chief minister managed to get her assets in within the permissible limit. Instead of the Rs 66 crore in disproportionate assets calculated by the trial court judge who had convicted her, Justice Kumaraswamy concluded that the disproportionate was barely Rs 2 crore – and hence too small to go after.

Charting assets

But how did we go from Rs 66 crore to Rs 2 crore?

The matter primarily focuses on a some property, firms and other assets owned either by Jayalalithaa or her aide Sasikala, which the prosecution were ill-gotten gains that were not proportionate to their incomes. Moreover, the police argued that the lavish wedding ceremony of Jayalalithaa's foster son indicated an amount of spending that did not match up with the she was earning. Putting these together, the trial court concluded that Jayalalithaa, and her aides had been responsible for about Rs 66 crore worth of disproportionate assets.

The High Court, however, having re-looked at all the evidence systemically cuts this figure down. It first says that the trial court failed to consider that Jayalalithaa and her aides had taken out major loans to pay for the firms and property that they were alleged to be "ill-gotten".

"The Trial Court has failed to appreciate the evidence in a proper perspective," the High Court said. "The immovable properties were acquired by borrowing huge loan from the Nationalised Banks. It is difficult to infer that the properties were acquired by means of ill-gotten money."  The court concluded that the prosecution had not done enough to prove that there was anything illegal about these.

Sense of disproportion

Specifically the court said that if the loans were considered income, the value of the assets of the land and firms owned by Jayalalithaa and company were not disproportionate.

Then there's the matter of the marriage. The High Court goes into step by step expenses of the wedding ceremony. Here again, the court accepts Jayalalithaa's income tax disclosures saying she spent Rs 28 lakh on the wedding, while the rest of the allegations of money spent by the then-CM – whether it involves a lavish hall or inviting music director AR Rahman to play – was "insufficient and vague" and so could not be held against her.

The court then actually puts together a handy chart (leaving aside the value of "footwear and sarees"). Based on a combination of accepting more income on Jayalalithaa's behalf, by considering loans as income, and systematically cutting down the expenses incurred, the court concludes that the assets aren't all that disproportionate.


"Taking into consideration of overall circumstances and material placed on record, in my view, the Judgment and finding recorded by the Trial Court suffers from infirmity and it is not sustainable in law," the High Court concluded. A few hours later, Jayalalithaa asserted that she had emerged "like tested pure gold".