Recovery of tainted currency cannot sustain conviction absent proof of demand and acceptance.

The prosecution alleged that the complainant, acting for workers awaiting wages under the NAREGA scheme, approached Accused No. 1, a Taluk Panchayat Executive Officer, for a required signature on the payment papers.

Accused No. 1 allegedly demanded ₹4,000 to sign.

After a trap, the Trial Court convicted him under Sections 7 and 13(1)(d), read with Section 13(2), of the Prevention of Corruption Act, 1988 (PC Act).

On appeal, the appellant challenged the conviction, principally disputing proof of demand and acceptance.

The prosecution relied on the complainant’s evidence, the shadow witness’s account, recovery of the money, and the recorded conversation.

Whether the prosecution proved beyond reasonable doubt that Accused No. 1 demanded illegal gratification from the complainant.

Whether the evidence established Accused No. 1’s acceptance of the alleged gratification so as to sustain his conviction under Sections 7 and 13(1)(d), read with Section 13(2), of the PC Act.

The Court applied Sections 7 and 13(1)(d), read with Section 13(2), of the PC Act.

It held that proof of demand for illegal gratification is an essential requirement for offences under Sections 7 and 13(1)(d); recovery or possession of the money, without proof of demand, is insufficient to establish guilt.

The Court relied on State of Uttar Pradesh v. A.K. Gaba Etc., citing Mukhtiar Singh (Since Deceased) through LRs v. State of Punjab, P. Satyanarayana Murthy v. State of A.P., and B. Jayaraj v. State of A.P.

The Court further stated that the presumption under Section 20 arises only once the foundational proof of demand and acceptance is established and is rebuttable.

The complainant, P.W.1, did not support the prosecution’s case on demand and gave an account of the money being handed to P.W.3, who placed it on Accused No. 1’s table.

By contrast, the shadow witness, P.W.2, testified that P.W.1 handed the money directly to Accused No. 1, who put it in his pocket.

The Court considered this inconsistency material.

It also noted P.W.2’s evidence that the recorded conversation contained no demand for illegal gratification.

In light of these evidentiary deficiencies, the Court found that neither demand nor acceptance had been proved; recovery of the money therefore could not sustain the conviction.

It allowed the appeal, set aside the conviction and sentence, and acquitted Accused No. 1 of the offences under Sections 7 and 13(1)(d), read with Section 13(2), of the PC Act.

Any bail bonds were cancelled.