2022 LiveLaw (SC) 192

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION
AJAY RASTOGI; ABHAY S. OKA, JJ.
February 21, 2022.
CRIMINAL APPEAL NO. 261 OF 2022
(Arising out of SLP (Criminal) No. 7182 of 2019)
K. SHANTHAMMA v. THE STATE OF TELANGANA
Prevention of Corruption Act, 1988 - Section 7, 13 - The proof of demand of bribe
by a public servant and its acceptance by him is sine quo non for establishing
the offence under Section 7 of the PC Act - The Failure of the prosecution to
prove the demand for illegal gratification would be fatal and mere recovery of
the amount from the person accused of the offence under Section 7 or 13 of the
Act would not entail his conviction thereunder. [Referred to P. Satyanarayana
Murthy v. District Inspector of Police, State of Andhra Pradesh (2015) 10 SCC 152].
(Para 7)
(Arising out of impugned final judgment and order dated 04-06-2019 in CRLA No. 2/2007 passed
by the High Court For The State Of Telangana At Hyderabad)
For Petitioner(s) Mrs. V. Mohana, Sr. Adv. Mr. Shishir Pinaki, Adv. Mr. D. Mahesh Babu, AOR
For Respondent(s) Ms. Bina Madhavan, Adv. Mr. S. Udaya Kumar Sagar, Adv Ms. Sweena Nair,
Adv Mr. P. Mohith Rao, Adv.
JUDGMENT
ABHAY S. OKA, J.
Leave granted.
1. The Special Court under the Prevention of Corruption Act, 1988 (for short ‘the PC
Act’) convicted the appellant for the offences punishable under Sections 7 and 13
(1)(d) read with Section 13(2) of the PC Act. The order of conviction has been
confirmed in appeal by the High Court of Telangana.
2. The prosecution case, in brief, is that the appellant was working as a Commercial
Tax Officer at Secunderabad. PW1 Shri R.Seetharamulu @ Sharma is the
complainant. PW1 was working at the relevant time as a supervisor in Farmers’
Service Co-operative Society (for short ‘the said Society’). He was doing the work of
filing returns of commercial tax of the said Society. Though the assessment of the
said Society for the year 1997-98 was completed, till February 2000, the returns of
the said Society for the year 1996-97 remained pending for assessment. The
appellant issued a notice dated 14th February 2000 calling upon the said Society to
produce cash book, general ledger, and purchase and sales statements for the year
1996-97. In February 2000, on the instructions of the Managing Director of the said
Society, PW1 attended the office of the appellant along with the concerned record.
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After PW1 showed the documents to the appellant, she called PW4 Ahmed
Moinuddin, ACTO, and directed him to verify the records. The case of PW1 is that on
24th February 2000, when he met the appellant, she demanded a bribe of Rs.3,000/-
for issuing an assessment order. Though he showed unwillingness to pay the amount,
for consecutive three days, the appellant reiterated the demand. On 29th February
2000, PW1 requested the appellant to issue final assessment order. At that time, the
appellant informed PW1 that unless the bribe as demanded is paid, she will not issue
final assessment order. On 23rd March 2000, PW1 again approached the appellant
when she scaled down her demand to Rs.2,000/-.
3. On 27th March 2000, PW1, along with the Managing Director of the said Society,
visited the office of the Anti-Corruption Bureau (ACB) at Hyderabad. PW1 filed a
written complaint to the Deputy Superintendent of Police, ACB. Accordingly, a trap
was laid. The allegation of the prosecution is that when PW1 tendered the tainted
currency notes of Rs.2,000/- to the appellant in her office, instead of taking the amount
directly, she took out a diary from her table drawer and opened the same. She asked
the appellant to keep the currency notes in the diary. Accordingly, PW1 kept the notes
in the said diary. After closing the diary, the appellant kept the same in her table
drawer. She locked the table drawer and kept the key in her handbag. After that, she
called ACTO along with the record. The appellant signed on the last page of the ledger
and cash book by putting the date as 26th February 2000. Thereafter, the appellant
directed the attender to affix an official rubber stamp below her signature. Accordingly,
a rubber stamp was put by the attender. PW1 collected the general ledger and cash
book from the attender, and after coming out of the office, he gave a signal to the trap
party. Then the trap party entered the office of the appellant. When the appellant was
questioned by the Deputy Superintendent of Police, she showed her right-hand side
table drawer. She took out the key of the drawer from her handbag and opened the
table drawer. She took out the diary from the drawer and placed the same on the
table. After the diary was opened by the Deputy Superintendent of Police, he found a
wad of currency notes. The numbers on the currency notes tallied with the serial
numbers of currency notes described in pre-trap proceedings. After that, the seizure
was carried out, and necessary formalities were completed. The Special Court found
that the demand of bribe and acceptance of bribe was proved by the prosecution. The
High Court has affirmed the said finding.
4. Mrs. V. Mohana, the learned Senior counsel appearing for the appellant, has taken
us through the evidence of the prosecution witnesses. Her first submission is that the
demand for a bribe by the appellant was not proved, and the evidence of PW1 to that
effect is an improvement. Moreover, LW8, who was instructed by the Deputy
Superintendent of Police of ACB to accompany PW1 inside the chamber of the
appellant, did not enter the chamber along with the appellant. She pointed out that
when the sodium carbonate test was conducted, the fingers of the appellant did not
turn pink; therefore, it was not established that she accepted the currency notes. The
alleged recovery of currency notes was shown from a diary. The recovery has not
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been proved. She pointed out the appellant’s defence that PW1 deliberately kept the
currency notes in the diary lying on her table when she went to the washroom before
leaving her office. Her submission is that the recovery of currency notes has not been
proved.
5. The learned Senior Counsel pointed out that the notice dated 26th February 2000
issued by the appellant was admittedly served on the said Society on 15th March 2000,
which recorded that the net turnover of the said Society was nil in the year 1996-97.
Therefore, the Society was not liable to pay any tax. Her submission is that this makes
the entire prosecution case about the demand extremely doubtful. She pointed out
that PW4, ACTO had a grudge against the appellant as, admittedly on 22nd March
2000, the appellant had served a memo on him pointing out the defaults committed
by him in the discharge of his duties. The learned counsel relied upon various
decisions of this Court in support of the proposition that unless the demand and
acceptance of bribe are established, a presumption under Section 20 of the PC Act
will not apply. She urged that the demand and acceptance have not been proved. She
also pointed out the case made out by the appellant in her statement under Section
313 of the Code of Criminal Procedure, 1973 (for short “the CrPC”). Her defence is
that at about 5.30 pm on 27th March 2000, she went to the washroom attached to her
chamber before leaving the office. When she came back, she found PW1 sitting in
her room. She informed PW1 that the file was no longer pending with her. Afterward,
she called PW4-ACTO through the attender and returned the account books to PW1.
She pointed out that PW7, P.V.S.S.P. Raju, and PW8, U.V.S.Raju, the then Deputy
Superintendent of Police, ACB, Hyderabad, accepted that there is a washroom
attached to the chamber of the appellant. She submitted that both the Courts have
committed an error by convicting the appellant.
6. Ms. Bina Madhavan, the learned counsel appearing for the respondent, supported
the impugned Judgments. She pointed out that the evidence of PW1 on continuous
demands made by the appellant is trustworthy as there is no reason for PW1 to make
any false allegation or falsely implicate the appellant. She submitted that the tainted
notes were found in the diary of the appellant, which was kept in her table drawer.
She was in possession of keys of the table drawer. She herself opened the table
drawer and produced the diary from her custody in which tainted notes were kept. Her
submission is that though communication may have been served on the said Society
on 15th March 2000 recording that the Society is not liable to pay any amount, the
appellant did not issue the final assessment order. She pointed out that the demand
made by the appellant was for issuing final assessment order, which was issued on
the day of the trap. Her submission is that the Special Court and the High Court, after
appreciating the evidence, have recorded findings of fact based on evidence on
record. Her submission is that under Article 136 of the Constitution of India, no
interference is called for.
7. We have given careful consideration to the submissions. We have perused the
depositions of the prosecution witnesses. The offence under Section 7 of the PC Act
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relating to public servants taking bribe requires a demand of illegal gratification and
the acceptance thereof. The proof of demand of bribe by a public servant and its
acceptance by him is sine quo non for establishing the offence under Section 7 of the
PC Act. In the case of P. Satyanarayana Murthy v. District Inspector of Police,
State of Andhra Pradesh and another, (2015) 10 SCC 152 this Court has summarised the
well-settled law on the subject in paragraph 23 which reads thus:
“23. The proof of demand of illegal gratification, thus, is the gravamen of the offence under Sections
7 and 13(1)(d)(i) and (ii) of the Act and in absence thereof, unmistakably the charge therefor, would
fail. Mere acceptance of any amount allegedly by way of illegal gratification or recovery thereof,
dehors the proof of demand, ipso facto, would thus not be sufficient to bring home the charge under
these two sections of the Act. As a corollary, failure of the prosecution to prove the demand
for illegal gratification would be fatal and mere recovery of the amount from the person
accused of the offence under Section 7 or 13 of the Act would not entail his conviction
thereunder.”
(emphasis added)
8. The prosecution’s case is that the appellant had kept pending the return of
commercial tax filed by the said Society for the year 1996-97. The appellant had
issued a notice dated 14th February 2000 to the said Society calling upon the said
Society to produce the record. Accordingly, the necessary books were produced by
the said Society. The case made out by PW1 is that when he repeatedly visited the
office of the appellant in February 2020, the demand of Rs.3,000/- by way of illegal
gratification was made by the appellant for passing the assessment order. However,
PW1, in his cross-examination, accepted that the notice dated 26th February 2000
issued by the appellant was received by the said Society on 15th March 2000 in which
it was mentioned that after verification of the books of accounts of the said Society,
exemption from payment of commercial tax as claimed by the said Society was
allowed. PW1 accepted that it was stated in the said notice that there was no necessity
for the said Society to pay any commercial tax for the assessment year 1996-97.
According to the case of the PW1, on 23rd March 2000, he visited the appellant’s office
to request her to issue final assessment order. According to his case, at that time,
initially, the appellant reiterated her demand of Rs.3,000/-. But she scaled it down to
Rs.2,000/-. Admittedly, on 15th March 2000, the said Society was served with a notice
informing the said Society that an exemption has been granted from payment of
commercial tax to the said Society. Therefore, the said Society was not liable to pay
any tax for the year 1996-97. The issue of the final assessment order was only a
procedural formality. Therefore, the prosecution’s case about the demand of bribe
made on 23rd March 2000 by the appellant appears to be highly doubtful.
9. PW1 described how the trap was laid. In the pre-trap mediator report, it has been
recorded that LW8, Shri R.Hari Kishan, was to accompany PW1 - complainant at the
time of offering the bribe. PW7 Shri P.V.S.S.P. Raju deposed that PW8 Shri U.V.S.
Raju, the Deputy Superintendent of Police, ACB, had instructed LW8 to accompany
PW1 - complainant inside the chamber of the appellant. PW8 has accepted this fact
by stating in the examination-in-chief that LW8 was asked to accompany PW1 and
4
observe what transpires between the appellant and PW1. PW8, in his evidence,
accepted that only PW1 entered the chamber of the appellant and LW8 waited outside
the chamber. Even PW7 admitted in the cross-examination that when PW1 entered
the appellant’s chamber, LW8 remained outside in the corridor. Thus, LW8 was
supposed to be an independent witness accompanying PW1. In breach of the
directions issued to him by PW8, he did not accompany PW1 inside the chamber of
the appellant, and he waited outside the chamber in the corridor. The prosecution
offered no explanation why LW8 did not accompany PW1 inside the chamber of the
appellant at the time of the trap.
10. Therefore, PW1 is the only witness to the alleged demand and acceptance.
According to PW1, firstly, the demand was made of Rs.3,000/- by the appellant on
24th February 2000. Thereafter, continuously for three days, she reiterated the
demand when he visited the appellant’s office. Lastly, the appellant made the demand
on 29th February 2000 and 23rd March 2000. On this aspect, he was cross-examined
in detail by the learned Senior Counsel appearing for the appellant. His version about
the demand and acceptance is relevant which reads thus :
“In the vicinity of office of AO the jeep, in which we went there was stopped and I was asked to go
into the office of AO and the trap party took vantage positions. Accordingly, I went inside the office
of AO. I wished AO. At that time apart from AO some other person was found in the office room of
AO and he was talking to the AO. AO offered me a chair. After discussion with the AO the said other
person left the room of AO. I informed AO that I brought the bribe amount as demanded by her and
also asked her to issue the Final Assessment Orders. Then I took the said tainted currency notes
from my shirt pocket and I was about to give the same to the AO and on which instead of taking the
same amount directly by her with her hands she took out a diary from her table drawer, opened the
diary and asked me to keep the said amount in the diary. Accordingly, I kept the amount in the said
diary. She closed the said diary and again kept the same in her table drawer and locked the drawer
and kept the keys in her hand bag which was hanging to her seat. She pressed the calling bell and
a lady attender came into the room of AO, then she instructed the lady attender to call concerned
ACTO to her along with the concerned society records.
Accordingly, ACTO came to AO along with record. After going through the Ledger and Cash Book
etc., AO signed on the last page of the said Ledger and Cash Book mentioning 26.02.2000 below
her signature in the said register though she signed on 27.03.2000 in my presence. AO directed her
attender to affix official rubber stamp below her signature in the Ledger and Cash Book and
accordingly attender affixed the same. AO also signed on the office note of Final Assessment Orders
at that time. Thereafter, I collected the General Ledger and Cash Book from the attender after
affixing the said rubber stamp thereon and came out of the office of AO and relayed the pre-arranged
signal to the trap party.”
(underlines supplied)
11. Thus, PW1 did not state that the appellant reiterated her demand at the time of
trap. His version is that on his own, he told her that he had brought the amount. What
is material is the cross-examination on this aspect. In the cross-examination, PW1
accepted that his version regarding the demand made by the appellant on various
dates was an improvement. The relevant part of the cross-examination of the
appellant reads thus:
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“I did not state to ACB Inspector in section 161 Cr.P.C. statement that on the evening of 24.02.2000
I met the AO and that she demanded the bribe. I did not mention in Ex.P3 complaint that continuously
for 3 days after 24.02.2000 I met the AO and the AO reiterated her demand. I did not mention in
Ex.P3 complaint that on 29.02.2000 I approached the AO and the AO demanded bribe of Rs.3,000/-
and that unless I pay the said bribe amount she will not issue final assessment orders. I did not state
in my Sec.164 statement before the Magistrate that 13.03.2000 to 16.03.2000 I was on leave and
from 01.03.2000 to 12.03.2000, I was engaged in recovering the dues of the society. It is not true to
suggest that I did not meet the AO continuously 3 days i.e., on 25th, 26th and 27th of February, 2000
and that 27.02.2000 is Sunday. It is not true to suggest that I did not meet the AO in the evening of
24.02.2000 and that AO did not demand any money from me. I did not state in my section 161
Cr.P.C. statement to Inspector of ACB that before I left the office of DSP on the date of trap I made
a phone call enquiring about the availability of AO and the AO was in the office and informed me
that she should be available in the office from 6.00 to 7.00 P.M. on that day so also in my Sec.164
Cr.P.C. I made such a phone call from the office of the DSP, ACB. I do not remember as to from
which phone number I made phone call on that day. I cannot describe office telephone number of
the AO. It is not true to suggest that I did not make any such phone call to AO and that she did not
give any such reply to me. I did not state to ACB Inspector in my 161 Cr.P.C. statement or to the
Magistrate in my S.164 Cr.P.C. statement that I went inside the office of AO and I wished AO and
at that time apart from AO some other person was found in the office room of AO and that he was
talking to the AO and that the AO offered me a chair and that after discussion with the AO the said
person left the room of AO and then I informed the AO that I brought the bribe amount. I did not
state that said aspects to DSP during the post trap proceedings also.
(underlines supplied)
12. Thus, the version of PW1 in his examination-in-chief about the demand made by
the appellant from time to time is an improvement. As stated earlier, LW8 did not enter
the appellant’s chamber at the time of trap. There is no other evidence of the alleged
demand. Thus, the evidence of PW1 about the demand for bribe by the appellant is
not at all reliable. Hence, we conclude that the demand made by the appellant has
not been conclusively proved.
13. PW2, Shri B.D.V. Ramakrishna had no personal knowledge about the demand.
However, he accepted that on 15th March 2000, the said Society received a
communication informing that the said Society need not pay any tax for the year 1996-
97. PW3 Shri L. Madhusudhan was working as Godown Incharge with the said
Society. He stated that on 15th March 2000, when he visited the appellant’s office,
ACTO served the original notice dated 26th February 2000 in which it was mentioned
that the Society was not liable to pay any tax. It is his version that when he met the
appellant on the same day, she enquired whether he had brought the demanded
amount of Rs.3,000/-. However, PW3 did not state that the appellant demanded the
said amount for granting any favour to the said society.
14. PW 4 Ahmed Moinuddin was ACTO at the relevant time. He deposed that on 27th
March 2000, the appellant instructed him to prepare the final assessment order, which
was kept ready in the morning. He stated that he was called at 6 pm to the chamber
of the appellant along with books of the said Society. At that time, PW1 was sitting
there. He stated that the appellant subscribed her signature on a Register of the said
Society and put the date as 26th February 2000 below it. He was not a witness to the
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alleged demand. However, in the cross-examination, he admitted that the appellant
had served a memo dated 21st March 2000 to him alleging that he was careless in
performing his duties.
15. Thus, this is a case where the demand of illegal gratification by the appellant was
not proved by the prosecution. Thus, the demand which is sine quo non for
establishing the offence under Section 7 was not established.
16. Hence, the impugned Judgments will have to be set aside. Accordingly, the appeal
is allowed. The conviction of the appellant for the offences punishable under Sections
7 and 13(1)(d) read with Section 13(2) of the PC Act is set aside and the appellant is
acquitted of the charges framed against her.

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