Justice M. Nagaprasanna passed the order while allowing a petition filed by Mr. Sarfaraz, who had questioned the regularity of the First Information Report (FIR) registered against him on December 23, 2025, for allegedly possessing assets exceeding his known sources of income based on the source report of December 1, 2025, on his income, assets, and liabilities prepared by the sleuths of the Lokayukta police.
The court ruled that the Lokyukta police had failed to follow the procedure evolved by them way back in 2023 prior to registering an FIR for allegedly possessing assets exceeding one’s known sources of income. The court pointed out that no preliminary inquiry was conducted before registering the FIR, as was mandated in the procedure laid down by the Lokyukta police themselves way back in 2023.
IT returns
More importantly, the court pointed out that Mr. Sarfaraz had declared all his assets, which were prima facie termed disproportionate to his known sources of income by the Lokayukta police, in his income tax returns and before the Competent Authority as obtaining under the Karnataka State Civil Service (Conduct) Rules, 2021.
Citing the apex court’s judgement in Nirankar Nath Pandey’s case, which was relied by the High Court to quash a DA case against another public servant, Justice Nagaprasanna noted the apex court had held that for evaluating cases relating to disproportionate assets involving public servants, the authorities must consider economic fluctuations and presume income tax returns to be accurate unless specifically proven to be false and the importance and relevance of the income tax returns have been taken into account.
It was argued on behalf of Mr. Sarfaraz that, had the Lokayukta police conducted a preliminary investigation, the facts about the assets would have become clear, including from the income tax returns.
From affluent family
The Lokayukta police had alleged that Mr. Sarfaraz, who was holding the post of the Director of Cooperative Audit and was on deputation as Private Secretary to the Minister when the FIR was registered, had amassed assets worth ₹9.42 crore, amounting to 135.04% assets disproportionate to his known income. However, the court noted that except for ₹66,500 in cash, no significant cash recovery was made during the searches conducted at his residences and other places, including bank lockers.
Earlier, the court was informed that the petitioner came from an affluent family and had no need to accumulate wealth beyond his known sources of income. It was submitted that his grandfather had served as a police inspector under the pre-Independence Madras Presidency and owned several immovable properties. His father was a landlord and held a senior government position, while his mother owned prime lands, residential sites, and houses.
The petition further stated that his younger brother is an independent businessman running a sports training centre and horse-riding school and owns several houses and apartments, and that his sister is married to a Kerala-cadre IPS officer, who retired as a Director General of Police.
