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CASE NO.: Appeal (crl.)  468-469 of 1998

PETITIONER: State of Andhra Pradesh                          

RESPONDENT: C. Uma Maheswara Rao & Anr.                      

DATE OF JUDGMENT: 31/03/2004

BENCH: DORAISWAMY RAJU & ARIJIT PASAYAT

JUDGMENT: J U D G M E N T

ARIJIT PASAYAT,J

                State of Andhra Pradesh questions legality of the  judgment rendered by a learned Single Judge of the  Andhra Pradesh High Court directing acquittal of the  respondents who were accused nos. 1 and 2 respectively  before the Trial Court i.e. Special Judge, CBI,  Visakhapatnam.  The respondents faced trial for alleged  commission of offences punishable under Sections 7 and  13 of the Prevention of Corruption Act, 1988 (in short  the ’Act’). The Trial Court found each to be guilty and  sentenced to undergo two years RI and to pay a fine of  Rs.1000/- with default stipulation. They were also  convicted under Section 120B of the Indian Penal Code,  1860 (for short the ’IPC’), sentenced to similar  custodial punishment and to pay a fine of Rs.2000/-.  But in appeal the conviction and sentence were set  aside.

Factual position as highlighted by the prosecution  is as follows:

C. Uma Maheswara Rao (A-1) was working as Deputy  Secretary of Visakhapatnam Port Trust and D. Satyananda  Reddy (A-2) was working as Deputy Financial Adviser and  Chief Accounts Officer of Visakhapatnam Port Trust G.   Subrahmanyam (PW-1) was the General Power of Attorney  holder of M/s Ramesh Chandra & Company. Both the  accused were members of Tender Opening Committee and  were associated with the processing of tender file  No.C1/BG/Sleepers/Risk/91. The file dealt with  placement of purchase order for Assam Salwood Sleepers  during the period from September, 1991 to December,  1991. Aforesaid Ramesh Chandra & Company through its  power of Attorney holder (PW-1) submitted their  quotation at Rs.828/- per sleeper and the total tender  value was Rs.1,33,84,702.80. A-1 phoned to PW-1 on  28.12.1991 at about 11.00 a.m. and asked him to meet  him in the evening at his residence for discussions  with regard to tender matter and PW-1 went to his house  at 8.30 p.m. on the same day and A-2 was also present  there. Both the accused, who were Public Servants,  during the discussion informed PW-1 that there were  many complications in the tender file and demanded

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Rs.20,000/- each to be paid as bribe to clear the file  in favour of M/s. Ramesh Chandra & Co.  They also told  him that they would not clear the file, if he fails to  meet the said demand and when PW-1 expressed his  financial constraints, they said that they should be  paid Rs.5,000/- each as advance and balance amount was  to be paid after release of the purchase order. A-1 had  contacted PW-1 over telephone at about 12.00 noon on  30.12.1991 and asked him to keep the demanded amount  ready so that he would come along with A-2 and collect  the same around 8.30 p.m. on that day at Basant Lodge,  Visakhapatnam. Thereafter, PW-1 lodged a complaint with  the Superintendent of Police, C.B.I. Visakhapatnam on  30.12.1991 about the demand of bribe by the accused and  on the basis of his complaint, investigation was taken  up by registering a case i.e. R.C. No. 19(A)/91.  Both  the accused were caught red handed at about 10.15 p.m.  on 30.12.1991 in Room No.208 of Basant Lodge,  Visakhapatnam soon after they demanded and accepted  bribe amount of Rs.5,000/- each from PW-1 as a motive  or reward for clearing the tender file in favour of  M/s. Ramesh Chandra & Co. The tainted currency notes  amounting to Rs.10,000/- were recovered immediately  from the polythene carry bag which was available with  A-1. Both the accused abused their official position as  public servants and after obtaining sanction under  Section 19(1)(c) of the Act, from the Chairman,  Visakhapatnam Port Trust a charge sheet was filed under  Section 120B IPC and Sections 7 and 13 (1)(d) read with  Section 13 (2) of the Act. The accused denied their  guilt.  The prosecution in support of its case examined  32 witnesses while the accused to substantiate their  plea of innocence examined 5 witnesses. PW-2 who was  taken as witness to prove the acceptance and recovery  of the money from PW-1 resiled partially from the  statement given during investigation.           Placing reliance on the evidence of PW-1, PW-3 and  PW-5, the Trial Court held that there was cogent and  credible evidence to show not only demand, acceptance  but also recovery of the money. PW-3 was at the  relevant time working as Preventive Officer, Customs  and worked as the mediator. PW-5 was the investigating  officer who received the complaint, and monitored the  trap operation. In appeal, before the High Court the  stand taken by the accused persons was that there was  no cogent evidence regarding demand. PW-1 complainant  was not reliable. The so-called complaint before the  CBI is dated 20.12.1991. Specific stand of the  prosecution was that the complaint was made on  30.12.1991 as per Exts. P-3 and P-3A. PW-2 who was one  of the mediators did not support the prosecution  version completely.  It was not possible to accept that  high ranked officers would take and accept money in the  presence of an unknown party.  There is no consistent  evidence as regards the first and the subsequent  demands. Since A-1 was not competent to finalise the  tenders, it was not possible that he would demand  money. Further the evidence on record clearly  establishes that by the time of alleged demand files  had been cleared by A-1 and, therefore, it is not  believable that the demand was made. PW-1 in the guise  of arranging a dinner took revenge on the accused  persons for seeking legal advice before acceptance of  the tender. With these observations, the High Court set

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aside the conviction and sentence as noted above.          

       In support of the appeals, learned counsel  appearing for the appellant-State submitted that the  order of the High Court is clearly erroneous.  The  correct position in law regarding presumptions was not  kept in view. The High Court made out a third case  which was not even urged by the accused persons before  the Trial Court regarding the alleged discrepancy of  the date of the complaint.  It was pointed out that  nowhere any such plea was raised by the accused persons  that the complaint is dated 20.12.1991. Documents  clearly show that it is dated 30.12.1991. It is not  known as to why the High Court made out a mew case  which was not even pleaded. Evidence of PW-1 clearly  establishes the demand and the recovery of money.  The  High Court came to a conclusion that third party was  present and high placed officers would not normally  make a demand in the presence of such a person. In  fact, PW-2 was introduced to be Group Finance Manager  of M/s. Ramesh Chandra & Co. by PW-1. No direct  evidence is necessary to show regarding acceptance of  money.  The Trial Court has analysed in great detail  the factual position and the High Court without even  considering those reasons and indicating any reason as  to why a different view was to be taken has directed  acquittal.

       Accused took the stand pleading that a telephonic  message was given in his house that there was a dinner  in the Basanti Lodge. A-5 took the stand that he had  gone to purchase sweets. At the time of search apart  from the tainted money Re.0.45 was found with him.  It  is unbelievable that somebody would go to buy sweets  with 45 paise in pocket. There was no variation and  discrepancy in the evidence.  The mediator report and  the evidence of the witnesses clearly establish the  accusations.            

       The High Court has observed that the accused  persons being only members of the tender committee  possibility of making a demand was not there.  

       In response, Mr. U.R. Lalit, learned counsel for  respondent no.1 (A-1) submitted that probabilities of  the case have to be looked into and no straight jacket  formula can be adopted for deciding a case of this  nature.  He referred to evidence regarding the accepted  position that the complainant had made grievance not  only against the accused persons, but also on the same  date against another officer of the Port Trust. Earlier  also he had made certain grievances against others.  This is a clear tactic to get his work done under the  threat of complaint. Taking advantage of the proximity  with the CBI officials false case has been foisted. In  this background, the complainant (PW-1)’s version  required strong corroboration which is absent. PW-2’s  evidence does not show any demand. The manner of  collecting sample is also totally not above board.   Since the file had already been cleared the question of  making a demand of bribe would not arise. Further the  complainant had been visiting the office and it is not  improbable that he had knowledge about accused persons  having cleared the file earlier to the date of demand.  The clout enjoyed by PW-1 in the office and the favour

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shown to him by some members of the Port Trust is  clearly established by the evidence on record. The  evidence of PW-1 clearly shows that he had not informed  accused persons about the booking of room at Basant  Lodge. It is improbable that the accused persons would  choose the lodge for accepting the bribe, when the  prosecution case itself is that PW-1 had gone to the  house of A-1 earlier when PW-2 was present there. The  plea of accused persons that PW-1 called them to the  Basant Lodge on the pretext of dinner is also  corroborated by the evidence of PW-11. Since view taken  by the High Court is reasonable one, no interference is  called for.  Suggestion was given that the documents  were not prepared at the time claimed. The statutory  presumption under the Act can be applied under Section  7 and not 13.  Since PW-2 was examined on the panch  witnesses, his evidence assumes importance and since  the High Court held that his evidence on certain  aspects is discrepant and contradictory, PW-1’s  evidence becomes suspect. In this background no  interference is called for.

       Learned counsel for respondent no.2 (A-2) adopted  the stand of A-1.  In addition she submitted that there  was no evidence of making a demand and his presence at  the house of A-1 as claimed is also not established.   The High Court has rightly observed that PW-1 is not a  reliable witness and come to the right conclusion.  The  view is not in any way perverse to warrant  interference.    The evidence of PWs 1 and 5 are discrepant as to  where the copy of Ext.P-3 was prepared. While it was  PW-1’s case that it was made in his office, PW-3 said  it is prepared in the office of CBI.

       By way of reply, learned counsel for the State  submitted that the plea that CBI officials had   conspired to falsely implicate A-1 and A-2 is clearly  unbelievable and looks absurd on the facts of the case.  No reason has been indicated as to why the CBI  officials would falsely implicate the accused persons  in the case. It has been recorded that there was no  restaurant facility at Basant Lodge and the plea that  there was a telephone call regarding the official  dinner at Basant Lodge is clearly without any  substance. Further, on 2.12.1991 the Chairman had asked  for certain clarifications. A bare look at the  complaint shows that it refers to the occurrence of the  same date i.e. 30.12.1991. This basic factor has been  overlooked by the High Court in making out a new case.

For appreciating rival stands it would be proper  to quote Section 20(1) of the Act, which reads as  follows:

       "20(1): Presumption where public  servant accepts gratification other  than legal remuneration.-(1) Where in  any trial or an offence punishable  under Section 7 or Section 11 or clause  (a) or clause (b) of sub-section (1)   or Section 13 it is proved that an  accused person has accepted or  obtained, or has agreed to accept or

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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 Indian Evidence Act,  1872 (in short 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 terrorem 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. (See M. Narsinga Rao v. State of A.P. (2001 (1)  SCC 691).  

Proof of the fact depends upon the degree of  probability of its having existed. The standard  required for reaching the supposition is that of a  prudent man acting in any important matter concerning  him. Fletcher Moulton L.J. in Hawkins v. Powells  Tillery Steam Coal Co. Ltd. (1911 (1) KB 988) observed  as follows:

       "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 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

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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-‘-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 v. State of  Maharashtra (1998 (7) SCC 337) "A presumption can be  drawn only from facts \026 and not from other presumptions  \026 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 there was recovery of money  from the accused. In fact the receipt and recovery is  accepted. The other factor is the acceptability of the  plea of loan, which the High Court itself has not held  cogent or credible.                   We may note that a three-Judge Bench in Raghubir  Singh v. State of Punjab (1974 (4) SCC 560) held that  the very fact that the accused was in possession of the  marked currency notes against an allegation that he  demanded and received the amount is "res ipsa  loquitur".  

       In Hazari Lal v. State (Delhi Admn.) (1980 (2) SCC  390) it was observed that there is no requirement to  prove passing of money by direct evidence. It may also  be proved by circumstantial evidence. In Madhukar  Bhaskarrao Joshi v. State of Maharashtra (2000 (8) SCC  571) it was observed thus:

       "The premise to be established on  the facts for drawing the presumption

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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 doing or  forbearing to do an 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".    

       In Black’s Law Dictionary, "gratification" is  defined as "a recompense or reward for services or  benefits, given voluntarily, without solicitation or  promise". But in Oxford Advance Learner’s Dictionary  of Current English the said word is given the meaning  "to give pleasure or satisfaction to". Among the  above two descriptions for the word "gratification"  with slightly differing nuances as between the two,  what is more appropriate for the context has to be  found out. The context in which the word is used in  Section 4(1) of the Act is, hence, important.  

       In Mohmoodkhan Mahboobkhan Pathan v. State of  Maharashtra (1997 (10) SCC 600) this Court has taken  the same meaning for the word "gratification"  appearing in Section 4(1) of the Prevention of  Corruption Act 1947 (hereinafter referred to as ’the  old Act’). We quote the following observations:

       "7. The primary condition for  acting on the legal presumption under  Section 4(1) of the Act is that the  prosecution should have proved that  what the accused received was  gratification. The word ’gratification’  is not defined in the Act. Hence, it  must be understood in its literal  meaning. In the Oxford Advanced  Learner’s Dictionary of Current  English, the word ’gratification’ is  shown to have the meaning ’to give  pleasure or satisfaction to’. The word  ’gratification’ is used in Section 4(1)  to denote acceptance of something to  the pleasure or satisfaction of the  recipient."                    The provisions of Section 4(1) of the old Act and

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Section 20(1) of the Act are almost identically worded.          What is the concept of gratification has been  succinctly stated by this Court in The State of Assam  v. Krishna Rao (1973 (3) SCC 227), through illuminating  words, after quoting Section 4 of the Act.

"22.-In State of Madras v. A.  Vaidiaratha Iyer (1958 SCR 580) after  reproducing the relevant provisions of  Section 4 of the Act this Court  observed that where it is proved that a  gratification has been accepted the  presumption under Section 4 of the Act  shall at once arise. It is a  presumption of law and it is obligatory  on the Court to raise it in every case  brought under Section 4. In the  reported case this Court allowed the  appeal of the State of Madras and  setting aside the impugned order of  acquittal passed by the High Court  restored that of the Special Judge  convicting the respondent there. In  C.I. Emden v. The State of U.P. (AIR  1960 SC 548) the appellant who was  working as a local foreman, was found  to have accepted a sum of Rs.375 from a  railway contractor. The appellant’s  explanation was that he had borrowed  the amount as he was in need of money  for meeting the expenses of the  clothing of his children who were  studying in school. The Special Judge  accepted the evidence of the contractor  and held that the money had been taken  as a bribe, that the defence story was  improbable and untrue, that the  presumption under Section 4 of the Act  had to be raised and that the  presumption had not been rebutted by  the appellant and accordingly convicted  him under Section 161 IPC and Section 5  of the Act. On appeal the High Court  held that on the facts of that case the  statutory presumption under Section 4  had to be raised, that the explanation  offered by the appellant was improbable  and palpably unreasonable and that the  presumption had not been rebutted, and  upheld the conviction. The appellant  contended, on appeal in this Court,  inter alia: (i) that the presumption  under Section 4 could not be raised  merely on proof of acceptance of money  but it had further to be proved that  the money was accepted as a bribe, (ii)  that even if the presumption arose it  was rebutted when the appellant offered  a reasonably probable explanation. This  Court, dealing with the presumption  under Section 4, observed that such  presumption arose when it was shown  that the accused had received the  stated amount and that the said amount

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was not legal remuneration. The word  ’gratification in Section 4(1) was to  be given its literal dictionary meaning  of satisfaction or appetite or desire;  it could not be construed to mean money  paid by way of a bribe. The High Court  was justified in raising the  presumption against the appellant as it  was admitted that he had received the  money from the contractor and the  amount received was other than legal  remuneration. On the facts the  explanation given by the accused, in  agreement with the opinion of the High  Court was held to be wholly  unsatisfactory and unreasonable. In  Dhanvantrai v. State of Maharashtra  (AIR 1964 SC 575) it was observed that  in order to raise the presumption under  Section 4(1) of the Act what the  prosecution has to prove is that the  accused person has received  ’gratification other than legal  remuneration’ and when it is shown that  he has received a certain sum of money  which was not a legal remuneration,  then, the condition prescribed by this  section is satisfied and the  presumption thereunder must be raised.  In Jhangan v. State of U.P. (1968 (3)  SCR 766) the above decisions were  approved and it is observed that mere  receipt of money is sufficient to raise  the presumption under Section 4(1) of  the Act."   

       In C.I. Emden v. State of Uttar Pradesh (AIR 1960  SC 548) and V.D. Jhangan v. State of Uttar Pradesh  (1966 (3) SCR 736) it was observed that if any money is  received and no convincing, credible and acceptable  explanation is offered by the accused as to how it came  to be received by him, the presumption under Section 4  of the old Act is available. When the receipt is  admitted it is for the accused to prove as to how the  presumption is not available as perforce the  presumption arises and becomes operative.  

       These aspects were highlighted recently in State  of Andhra Pradesh v. V. Vasudev Rao (JT 2003 (9) SC  119).               The evidence of PW-1 cannot be ignored on the  ground that he had earlier made grievances against some  other officials. The Trial Court had carefully analysed  his evidence and found the same to be credible. Even if  PW-2 did not support the prosecution version on some  aspects yet his evidence also prove giving of money.   The evidence of PW-1 coupled with those of PWs 3 and 5  is sufficient to bring home the accusations.  Further,  the High Court seems to have made out a new case about  the alleged date of complaint. A bare reading of the  contents of the complaint and the date put in the  complaint as evident from Exts. P-3 and P-3A clearly  show that the High Court was not correct in saying that

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the date of the document is 20.12.1991. Additionally,  this plea was not raised before the Trial Court. There  was even no suggestion about that aspect. Learned  counsel for A-1 and A-2 submitted that suggestions were  there, which is not so. What was suggested was the  documents were not prepared at the time they were  claimed to be. There is a gulf of difference between  "time" and "date". In any event such a plea has not  been taken before the courts below. It being  essentially a question of fact, the High Court could  not have made out a new case regarding correctness of  the date. As noted above, the views of the High Court  were also not correct when the document is itself  looked at.  Much stress was laid on the accused persons  not being the final authority in the tender matter. As  noted in  Chaturdas Bhagwandas Patel v. The State of  Gujarat (1976 (3) SCC 46) the question whether a person  has authority to do the act for which bribe is accepted  is of no consequence.

       Keeping in view the legal principles as can be  culled out from decisions referred to above, applying  the fact situation to them the inevitable conclusion is  that the High Court was not justified in directing  acquittal. Not only the correct legal position was not  kept in view but the analysis of the factual position  is also found to be erroneous. That being so, the  judgment of the High Court is set aside.  Custodial  sentence of one year for each of the proved offence  would meet the ends of justice, with the fine and  default stipulation stipulated by the Trial Court.  

The appeals are allowed to the extent indicated.   The accused persons are directed to surrender to  custody to serve remainder of sentence, if any.