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CASE NO.: Appeal (crl.) 719 1995

PETITIONER: N.  NARSINGA RAO

       Vs.

RESPONDENT: STATE OF ANDHRA PRADESH

DATE OF JUDGMENT:       12/12/2000

BENCH: U.C.Banerjee, R.P.Sethi

JUDGMENT:

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     J U D G M E N T

     THOMAS, J.

     Can  a  legal  presumption  be   based  on  a  factual presumption?  The latter is discretionary whereas the former is  compulsory.  Such a question arose in this appeal and in view  of  the importance of the issue a two-Judge Bench  has referred this case to be heard by a larger bench.  The legal presumption  envisaged  in Section 20 of the  Prevention  of Corruption  Act 1988 (for short the Act) is that on  proof of  certain  fact  the court shall presume  certain  other fact.  When there is no direct evidence for establishing the primary  fact  the court has to depend upon the  process  of inference  drawn from other facts to reach the said  primary fact.   The  crux  of the question involved,  therefore,  is whether  an  inference thus made could be used as a  premise for  the  compulsory presumption envisaged in Section 20  of the Act.

     The  aforesaid  question  arose   from  the  following assortment  of  facts.   Appellant  was manager  of  a  Milk@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ Chilling Centre attached to Andhra Pradesh Dairy Development Co-operative  Federation.   He is alleged to  have  received bribe  money of Rs.500/- from a milk-transporting contractor (PW1-Satya  Prasad).  He was caught red handed on  20.4.1989 in  a trap arranged by the officials of the Anti  Corruption

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Bureau  (ACB).   They  charge-sheeted him before  a  Special Court  for  offences  under Sections 7 and 13(2)  read  with Section  13(1)(d) of the Act.  After trial the Special Judge convicted him and sentenced him to rigorous imprisonment for two  years  and a fine of Rs.2000/- under each of the  above counts.   The  High  Court of Andhra Pradesh  confirmed  the conviction  but  reduced the sentence of imprisonment  to  a period of one year.  This appeal is in challenge of the said conviction and sentence.

     A   summary  of  the   allegations  made  against  the appellant  are  thess:   PW1-Satya Prasad was  to  get  some amount from Andhra Pradesh Dairy Development Corporation for transporting  milk  to or from the Milk Chilling  Centre  at Luxettipet (Adilabad district).  He approached the appellant for taking prompt steps so as to enable him to get the money disbursed.   But appellant demanded Rs.500/- for sending the recommendation  in  favour of payment of the amount  due  to PW1.  As the appellant persisted with his demand PW1 yielded to  the  same,  but  before handing over the  money  to  the appellant  PW1  lodged a complaint (Ex.P2) with the  DSP  of Anti  Corruption Bureau.  On the basis of the said complaint PW7   (DSP)  registered  Ex.P18  FIR   and  then  made   all arrangements  for a trap to catch the corrupt public servant red handed.

     On  24.4.1984  PW1 brought the currency notes  to  the office  of the ACB for making up the demanded bribe  amount. The  said  currency notes were treated with  phenolphthalein powder  by or at the direction of PW7 as preparation for the trap.   PW1  and the already arranged witness  PW2  together went  to  the  house of the appellant by about  noon.   When appellant  asked  whether the amount was brought PW1  handed over  the  phenolphthalein  smeared currency  notes  to  the appellant.   He  accepted  the amount and put  the  currency notes  in his pocket.  Thereupon, a pre-scheduled signal was transmitted  to the members of the ACB team who were waiting outside.   They  suddenly  rushed  to the  place  where  the appellant was then standing, caught the appellant red-handed and  the  tainted  currency notes were  recovered  from  his pocket.   All  the  usual follow up  steps  were  thereafter adopted   by  the  ACB  team   and  on  completion  of   the investigation  the  case  was charge-  sheeted  against  the appellant.

     It took four years thereafter for the Special Judge to commence evidence taking for the prosecution.  The said long interval, perhaps, helped the appellant as is reflected from the  fact  that PW1 and PW2 made a volte-face in  the  trial court  and  they  denied  having paid  any  bribery  to  the appellant  and also denied that appellant demanded the bribe amount.   PW1 said, for the first time, that he acted at the behest of one Dr.  Krishna Rao and went to the office of the appellant and did everything as directed by the said Krishna Rao.  Both the witnesses were declared hostile by the Public Prosecutor  and  both were cross-examined in detail.   After examining  the  remaining  witnesses   for  prosecution  the appellant  was  called upon to answer questions put  to  him under  Section  313 of the Code of Criminal  Procedure  (for short the Code).  He then submitted a written statement in which  he said that Dr.  Krishna Rao bore grudge against him and  that person orchestrated this false trap against him by employing  PW1  and  PW2.  According to the  appellant,  the tainted  currency  notes  were  forcibly  stuffed  into  his pocket.   He examined two witnesses on the defence side  and

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both  of them said that on the dates when the alleged demand was  made  by  the appellant he was on tour at  a  different place.

     Both  the  trial court and the High Court  disbelieved the defence evidence in toto and found that PW1 and PW2 were won  over  by  the  appellant and that is  why  they  turned against  their  own  version recorded by  the  investigating officer  and subsequently by a magistrate under Section  164 of  the Code.  The Special Judge ordered those two witnesses to  be prosecuted for perjury and the said course  suggested by the trial judge found approval from the High Court also.

     In the appeal the High Court dealt with the contention that  it is not possible to draw any presumption against the delinquent  public servant in the absence of direct evidence to  show  that the public servant demanded bribery and  that the  same was paid to him.  Learned single judge of the High Court  observed thus on that aspect:  It is true that there is no direct evidence in this case that the accused demanded and  accepted  the money.  But the rest of the evidence  and the  circumstances  are  sufficient to  establish  that  the accused  had  accepted the amount and that gives rise  to  a presumption under section 20 of the Prevention of Corruption Act  that  he  accepted the same as  illegal  gratification, particularly  so  when the defence theory put forth  is  not accepted.

     Mr.   L.   Nageswara  Rao,  learned  counsel  for  the appellant,  adopted  a twin contention.  First is  that  the@@ JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ presumption  under Section 20 of the Act could be drawn only when  the prosecution succeeded in establishing with  direct evidence  that  the  delinquent public servant  accepted  or obtained  gratification.   That premise cannot depend on  an inference for affording foundation for the legal presumption envisaged in Section 20 of the Act, according to the learned counsel.   The  second limb of his contention is that it  is not  enough that some currency notes were handed over to the public  servant  to  make it  acceptance  of  gratification. Prosecution  has a further duty to prove that what was  paid amounted to gratification, contended the counsel.

     In  support  of the first contention, learned  counsel relied on the decision of a two judge bench of this court in Sita Ram vs.  State of Rajasthan {1975 (2) SCC 227}.  It was held  by  the bench that on mere recovery of certain  money from  the  person  of an accused without the  proof  of  its payment  by  or  on behalf of some person to  whom  official favour was to be shown the presumption cannot arise.

     The  said observation was made in the background of  a finding  made  by  the  High Court in  that  case  that  the evidence  of the witnesses was not reliable and particularly because  so many jerks and jolts seem to have been given to the prosecution case by contradictory and hostile statements of  the witnesses that a good part of it had to be  rejected by  the High Court. That decision and the observation could thus  confine  to  the  facts of that  case,  and  no  legal principle   for  future  application   could  be   discerned therefrom.

     Learned  counsel then relied on another decision of  a two judge bench of this court in Suraj Mal vs.  State (Delhi Administration)  {1979  (2)  SCC   725}  wherein  the  bench

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observed  that  in  our  opinion, mere  recovery  of  money divorced  from  the circumstances under which it is paid  is not  sufficient to convict the accused when the  substantive evidence in the case is not reliable. In that case also the said  finding depended upon the veracity of the testimony of the  witnesses.   But the contention raised by  the  learned counsel  in  this case on the point convassed by him  cannot find any support from the said decision either.

     While adverting to the first contention of the learned counsel  we  may reproduce Section 20(1) of the Act.   [That sub-  section  is virtually the same as Section 4(1) of  the predecessor  Act of 1947].  20(1) Presumption where  public servant accepts gratification other than legal remuneration. -(1)  Where,  in  any trial of an offence  punishable  under section  7  or  section 11 or clause (a) or  clause  (b)  of sub-section  (1) of section 13 it is proved that an  accused person  has accepted or obtained or has agreed to accept  or attempted  to  obtain for himself, or for any other  person, any  gratification  (other than legal remuneration)  or  any valuable thing from any person, it shall be presumed, unless the  contrary  is  proved, that he accepted or  obtained  or agreed  to accept or attempted to obtain that  gratification or  that valuable thing, as the case may be, as a motive  or reward such as is mentioned in section 7 or, as the case may be,  without  consideration or for a consideration which  he knows  to be inadequate. Before proceeding further, we  may point  out  that  the expressions may presume  and  shall presume  are defined in Section 4 of the Evidence Act.  The presumptions   falling  under  the   former   category   are compendiously   known   as     factual   presumptions   or discretionary  presumptions  and those falling  under  the latter as legal presumptions or compulsory presumptions. When  the  expression  shall be presumed  is  employed  in Section  20(1)  of the Act it must have the same  import  of compulsion.

     When  the sub-section deals with legal presumption  it is  to  be  understood  as in terrorum i.e.  in  tone  of  a command that it has to be presumed that the accused accepted the  gratification  as  a  motive or  reward  for  doing  or forbearing  to  do any official act etc., if  the  condition envisaged  in  the former part of the section is  satisfied. The  only  condition  for drawing such a  legal  presumption under  Section  20 is that during trial it should be  proved that  the  accused  has  accepted or agreed  to  accept  any gratification.   The  section  does not say  that  the  said condition  should be satisfied through direct evidence.  Its only  requirement is that it must be proved that the accused has  accepted  or  agreed to accept  gratification.   Direct evidence  is  one of the modes through which a fact  can  be proved.   But  that  is not the only mode envisaged  in  the Evidence  Act.   The word proof need be understood in  the sense  in  which it is defined in the Evidence  Act  because proof depends upon the admissibility of evidence.  A fact is said to be proved when, after considering the matters before it,  the court either believes it to exist, or consider  its existence  so  probable that a prudent man ought, under  the circumstances  of  the  particular  case, to  act  upon  the supposition  that  it exists.  This is the definition  given for the word proved in the Evidence Act.  What is required is  production  of  such materials on which  the  court  can reasonably  act to reach the supposition that a fact exists. Proof  of the fact depends upon the degree of probability of its  having existed.  The standard required for reaching the

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supposition is that of a prudent man acting in any important matter  concerning  him.  Fletcher Moulton L.J.  in  Hawkins vs.   Powells  Tillery Steam Coal Company, Ltd.   [1911  (1) K.B.   988] observed like this:  Proof does not mean  proof to  rigid  mathematical  demonstration,   because  that   is impossible;   it  must mean such evidence as would induce  a reasonable man to come to a particular conclusion".

     The  said  observation has stood the test of time  and@@       IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIII can  now be followed as the standard of proof.  In  reaching the  conclusion the court can use the process of  inferences to  be drawn from facts produced or proved.  Such inferences are  akin  to  presumptions  in  law.   Law  gives  absolute discretion to the court to presume the existence of any fact which  it  thinks likely to have happened.  In that  process the  court  may  have  regard to common  course  of  natural events,  human conduct, public or private business vis-Ã -vis the facts of the particular case.  The discretion is clearly envisaged  in Section 114 of the Evidence Act.   Presumption is  an  inference of a certain fact drawn from other  proved facts.   While  inferring  the  existence  of  a  fact  from another, the court is only applying a process of intelligent reasoning  which  the mind of a prudent man would  do  under similar  circumstances.   Presumption  is   not  the   final conclusion  to  be drawn from other facts.  But it could  as well  be final if it remains undisturbed later.  Presumption in  Law  of  Evidence  is a rule  indicating  the  stage  of shifting  the burden of proof.  From a certain fact or facts the  court can draw an inference and that would remain until such  inference  is either disproved or dispelled.  For  the purpose  of reaching one conclusion the court can rely on  a factual presumption.  Unless the presumption is disproved or dispelled  or rebutted, the court can treat the  presumption as  tantamounting  to  proof.   However,  as  a  caution  of prudence  we  have to observe that it may be unsafe  to  use that   presumption  to  draw   yet   another   discretionary presumption  unless  there is a statutory compulsion.   This Court has indicated so in Suresh Budharmal Kalani vs.  State of  Maharashtra  [1998 (7) SCC 337].  A presumption can  be drawn only from facts - and not from other presumptions  by a  process of probable and logical reasoning.  Illustration (a)  to Section 114 of the Evidence Act says that the  court may  presume that a man who is in the possession of  stolen goods  soon  after  the  theft is either the  thief  or  has received  the goods knowing them to be stolen, unless he can account   for  his  possession.   That   illustration   can profitably  be  used  in the present context  as  well  when prosecution  brought  reliable  materials  that  appellants pocket  contained phenolphthalein smeared currency notes for Rs.500/-  when  he  was  searched by PW-7 DSP  of  the  Anti Corruption  Bureau.   That  by itself may not  or  need  not necessarily  lead  to  a presumption that he  accepted  that amount  from somebody else because there is a possibility of somebody  else either stuffing those currency notes into his pocket  or  stealthily inserting the same therein.  But  the other  circumstances which have been proved in this case and those  preceding  and  succeeding the searching out  of  the tainted  currency notes, are relevant and useful to help the court  to  draw  a factual presumption  that  appellant  had willingly received the currency notes.

     PW-7 DSP said that PW-1 approached him on the previous day  and lodged Ext.P-2 complaint stating that appellant was persistently  demanding  Rs.500/-  from him.   The  currency

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notes  were actually prepared by PW-7 by smearing them  with phenolphthalein  powder.   When  appellant  was  caught  red handed  with those currency notes he never demurred to  PW-7 that  those  notes were not received by him.  In  fact,  the story  that such currency notes were stuffed into his pocket was  concocted by the appellant only after lapse of a period of  4  years and that too when appellant faced the trial  in the   court.   From  those  proved   facts  the  court   can legitimately  draw a presumption that appellant received  or accepted  the  said currency notes on his own volition.   Of course,  the  said presumption is not an inviolable one,  as the    appellant    could    rebut    it   either    through cross-examination  of the witnesses cited against him or  by adducing  reliable evidence.  But if the appellant fails  to disprove  the  presumption the same would stick and then  it can  be  held by the court that the prosecution  has  proved that appellant received the said a mount.  In Raghubir Singh vs.  State of Haryana [1974 (4) SCC 560] V.R.  Krishna Iyer, J,  speaking for a three Judge Bench, observed that the very fact  of an Assistant Station Master being in possession  of the  marked  currency  notes against an allegation  that  he demanded  and  received that amount is res ipsa  loquitur. In  this  context the decision of a two Judge Bench of  this Court (R.S.  Sarkaria and O.  Chinnappa Reddy, JJ) in Hazari Lal vs.  Delhi (Delhi Administration) [1980 (2) SCC 390] can usefully  be referred to.  A police constable was  convicted under  Section  5(2)  of the Prevention of  Corruption  Act, 1947,  on  the  allegation  that he  demanded  and  received Rs.60/-  from  one Sriram who was examined as PW-3  in  that case.   In  the trial court PW-3 resiled from  his  previous statement  and was declared hostile by the prosecution.  The official  witnesses  including  PW-8   have  spoken  to  the prosecution  version.  The court found that  phenolphthalein smeared currency notes were recovered from the pocket of the police  constable.  A contention was raised in the said case that  in  the  absence of direct evidence to show  that  the police constable demanded or accepted bribery no presumption under  Section 4 of the Act of 1947 could be drawn merely on the  strength of recovery of the marked currency notes  from the said police constable.  Dealing with the said contention Chinnappa  Reddy,  J.  (who spoke for the two  Judge  Bench) observed  as follows:  It is not necessary that the passing of  money should be proved by direct evidence.  It may  also be  proved  by  circumstantial evidence.  The  events  which followed in quick succession in the present case lead to the only  inference  that the money was obtained by the  accused from  PW3.  Under Section 114 of the Evidence Act the  court may presume the existence of any fact which it thinks likely to  have happened, regard being had to the common course  of natural  events,  human  conduct   and  public  and  private business, in their relation to facts of the particular case. One  of the illustrations to Section 114 of the Evidence Act is  that  the  court  may presume that a person  who  is  in possession  of  the  stolen goods soon after the  theft,  is either  the chief or has received the goods knowing them  to be  stolen,  unless he can account for his  possession.   So too, in the f acts and circumstances of the present case the court may presume that the accused who took out the currency notes  from  his pocket and flung them across the  wall  had obtained  them from PW3, who a few minutes earlier was shown to  have been in possession of the notes.  Once we arrive at the  finding  that the accused had obtained the  money  from PW3, the presumption under Section 4(1) of the Prevention of Corruption Act is immediately attracted.  The presumption is of  course  rebuttable but in the present case there  is  no

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material  to  rebut  the   presumption.   The  accused  was, therefore,  rightly  convicted  by the  courts  below.  The aforesaid  observation  is  in consonance with the  line  of approach  which we have adopted now.  We may say with  great respect  to  the learned Judges of the two Judge Bench  that the  legal  principle  on  this aspect  has  been  correctly propounded therein.

     Regarding  the second limb of the contention  advanced by  Shri  Nageshwar Rao, learned counsel for  the  appellant (that  it  was  not gratification which  the  appellant  has received)  we  think  it is not necessary to deal  with  the matter in detail because in a recent decision rendered by us the  said  aspect  has  been dealt with  at  length.   [Vide Madhukar Bhaskarrao Joshi vs.  State of Maharashtra, JT 2000 (supple.2)  SC 458].  The following statement made by us  in the  said  decision  would be the answer  to  the  aforesaid contention  raised by the learned counsel:  The premise  to be  established on the facts for drawing the presumption  is that there was payment or acceptance of gratification.  Once the said premise is established the inference to be drawn is that  the  said  gratification was accepted  as  motive  or reward  for doing or forbearing to do any official act.  So the  word  gratification  need not be  stretched  to  mean reward  because  reward  is the outcome of  the  presumption which  the  court  has to draw on the factual  premise  that there  was  payment  of gratification.  This will  again  be fortified  by looking at the collocation of two  expressions adjacent  to each other like gratification or any  valuable thing. If acceptance of any valuable thing can help to draw the presumption that it was accepted as motive or reward for the  official act, the word gratification must be  treated in  the context to mean any payment for giving  satisfaction to the public servant who received it.

     We,  therefore,  agree with the finding of  the  trial court  as well as the High Court that prosecution has proved that appellant has received gratification from PW1.  In such a  situation  the court is under a legal compulsion to  draw the  legal presumption that such gratification was  accepted as  a  reward  for doing the public duty.   Of  course,  the appellant  made  a  serious  endeavour  to  rebut  the  said presumption  through two modes.  One is to make PW1 and  PW2 speak  to  the version of the appellant and the other is  by examining  two witnesses on the defence side.  True PW1  and PW2  obliged the appellant.  The two defence witnesses  gave evidence to the effect that the appellant was not present at the  station on the date when the alleged demand was made by PW1.  But the trial court and the High Court have held their evidence unreliable and such a finding is supported by sound and  formidable  reasoning.  The concurrent finding made  by the  two  courts does not require any interference  by  this Court.

     In the result we dismiss this appeal.

      [ K.T.  Thomas ]