Recovery from one accused cannot substitute for independent proof of demand against a co-accused.

The complainant, Shailendra Agarwal, a compulsorily retired Sub-Engineer, had a pending pension and gratuity claim before the District Treasury, Indore.

On 2 September 2015, he alleged that Treasury Officer Omprakash Mungelwal directed him to Assistant Treasury Officer Rajendra Sharma, who demanded ₹10,000 for expediting the pension and gratuity process, later reducing the demand to ₹7,000. The complainant allegedly paid ₹2,000 initially and was asked to bring the remaining ₹5,000 on 4 September 2015.

The Lokayukta arranged a trap. Ten ₹500 currency notes were treated with phenolphthalein powder, and the complainant was sent to the Treasury with the money.

The tainted currency was recovered from Omprakash Mungelwal’s trouser pocket; his hand-wash and pocket-wash solutions turned pink. No money was recovered from Rajendra Sharma.

The Special Judge convicted both appellants under Sections 7 and 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988, and Section 120-B of the IPC, imposing concurrent sentences of three and four years’ rigorous imprisonment, along with fines.

Both appellants challenged the conviction under Section 374(2) CrPC.

Whether the prosecution proved, beyond reasonable doubt, the demand, acceptance, and recovery of illegal gratification against Omprakash Mungelwal so as to sustain his convictions under Sections 7 and 13(1)(d) read with Section 13(2) of the PC Act?

Whether the prosecution established the individual participation of Rajendra Sharma in the demand and acceptance of illegal gratification, despite the absence of recovery from him and the evidentiary deficiencies concerning the voice recording and seizure of the pension file?

Whether the prosecution sanction was invalid because it incorrectly recorded that the tainted money had been recovered from Rajendra Sharma?

Whether the evidence established a prior meeting of minds sufficient to prove criminal conspiracy under Section 120-B IPC against both appellants?

The Court applied Sections 7, 13(1)(d) read with Section 13(2), 19(3), and 20 of the Prevention of Corruption Act, 1988, and Section 120-B of the IPC.

Relying principally on the Constitution Bench decision in Neeraj Dutta v. State (Government of NCT of Delhi), (2023) 4 SCC 731, it held that proof of demand and acceptance or obtainment of illegal gratification is essential for conviction under Sections 7 and 13(1)(d)(i)–(ii), though such facts may be proved by direct or circumstantial evidence.

Once acceptance of gratification is proved in a Section 7 case, Section 20 mandates a rebuttable presumption that it was accepted as a motive or reward.

The Court further applied Section 19(3) of the PC Act, under which an error or irregularity in sanction does not vitiate the trial absent a failure of justice.

It also held that electronic evidence and adverse inference from refusal to give a voice sample cannot substitute for reliable proof identifying the accused’s voice and establishing demand.

For Section 120-B IPC, mere official association or recovery from a co-accused is insufficient; the prosecution must establish a prior meeting of minds.

As to Omprakash Mungelwal, the Court found the complainant’s testimony regarding delivery of ₹5,000 corroborated by the independent witness’s evidence of recovery from Mungelwal’s trouser pocket.

The positive hand-wash and pocket-wash tests established physical contact with the tainted currency.

These foundational facts triggered the statutory presumption under Section 20, which Mungelwal failed to rebut; his explanation that the money represented repayment of a loan was considered improbable and unsupported.

The sanction discrepancy was treated as a curable irregularity under Section 19(3), although its evidentiary significance was considered separately.

In contrast, the Court held that the case against Rajendra Sharma lacked reliable individual proof.

No tainted money was recovered from him, the recorded voice was not independently identified, no satisfactory scientific voice comparison was conducted, and his refusal to provide a voice sample could not replace the prosecution’s primary burden to prove demand.

The alleged seizure of the pension file from Sharma was weakened by the defence witness’s evidence that the file had been handed over to the investigating team independently of Sharma.

The Court further held that recovery from Mungelwal and the appellants’ common workplace did not establish a conspiracy or prior meeting of minds involving Sharma.

His convictions under Sections 7 and 13(1)(d) read with Section 13(2) of the PC Act and Section 120-B IPC, along with the sentences imposed by the trial court, were upheld; if on bail, he was directed to surrender to undergo the remaining sentence.

Criminal Appeal No. 8635 of 2018 filed by Rajendra Sharma was allowed.

His convictions and sentences were set aside, and he was acquitted of all charges by extending the benefit of reasonable doubt.

His bail bonds were discharged and any fine deposited was directed to be refunded in accordance with law.