Merely showing circulars and a press release that permit holding gold to a certain extent does not amount to accounting for the assets, the Supreme Court has held, restoring a Disproportionate Assets Case against a Bihar public servant that the Patna High Court had quashed on that ground.
New Delhi: A Patna High Court order that threw out cognizance against a public servant because the gold seized from her was within the limits in CBDT circulars has itself been set aside by the Supreme Court, which held that entitlement to possess gold is one thing and accounting for it in a prosecution under the Prevention of Corruption Act is another [State of Bihar v. Phulpari Kumari].
A Bench of Justice K.V. Viswanathan and Justice Arun Palli allowed the State of Bihar’s appeal on November 2, 2026. Advocate Akshay Amritanshu appeared for the State and Advocate Ranjit Kumar for the respondent.
The Supreme Court’s answer
The Bench rejected the High Court’s approach in clear terms:
“…we find that the reasoning of the High Court is totally untenable. In a prosecution under Section 13(1)(e) read with Section 13(2) of the Act, the accused is called upon to explain allegations with regard to owning assets disproportionate to known sources of income. Merely showing certain press release and circulars permitting the holding of gold to a certain extent will not amount to accounting for the possession of the said assets.”
It set aside the High Court’s order, restored the cognizance order of January 28, 2021 and directed that the case proceed from that stage.
The route to the Supreme Court
An FIR was registered on May 11, 2015 at the Vigilance Police Station, Patna (P.S. Case No. 37 of 2015) against Phulpari Kumari and her husband under Section 13(1)(e) read with Section 13(2) of the Prevention of Corruption Act, 1988, alleging ownership of assets disproportionate to known sources of income. After sanction, a chargesheet was filed against her alone on July 29, 2020, and the Special Judge, Vigilance, Patna took cognizance on January 28, 2021 in Special Case No. 20 of 2015.
Before the High Court, she relied on CBDT Instruction No. 1916 dated May 11, 1994 and a Ministry of Finance press release dated December 1, 2016, under which a married woman may possess 500 grams of gold, an unmarried woman 250 grams and a man 100 grams. The High Court accepted the argument. By its order of May 14, 2026 in Criminal Miscellaneous No. 56839 of 2021, it held:
“In the present case, if the gold is calculated with reference to the aforesaid Circular, the petitioner does not possess more than 750 Grams which is the permissible limit of petitioner. Thus, the Vigilance Department has seized the gold erroneously…”
What each side argued
The State argued that the circulars have no application in deciding whether assets are disproportionate to known income or in carrying on a prosecution under the Act. Counsel for the respondent defended the High Court’s view and said there were other aspects which would show the assets were not disproportionate.
Liberty left with the accused
Recording the respondent’s submission that there were other aspects she wished to argue, the Court gave her liberty to take such proceedings as are available in law before the trial court, and said that if she does, they will be decided uninfluenced by the observations in either the High Court’s order or its own. The allegations remain to be tested at trial, and she is presumed innocent until proven guilty.
Why the order matters
Public servants facing disproportionate assets charges often point to the CBDT gold limits, which were framed to guide income tax searches on seizure of jewellery. The order makes clear that those limits do not convert gold into an explained asset. Under Section 13(1)(e), the question is whether the accused can satisfactorily account for assets against known income, and a circular on permissible holdings does not answer that question. Quashing at the cognizance stage on such a ground is therefore not open.
Case Title: State of Bihar v. Phulpari Kumari
Case Number: Criminal Appeal No. 5212 of 2026 (arising out of SLP (Crl.) No. 15711 of 2026)
Bench: Justice K.V. Viswanathan and Justice Arun Palli, Supreme Court of India
Date of Order: November 2, 2026
Appearances: Akshay Amritanshu, AOR, for the State of Bihar; Dr. Ranjit Kumar, Advocate, with Karan Verma, AOR, for the respondent