Without proof of demand and acceptance, conviction for corruption cannot be sustained.

The appellant, an Assistant Labour Commissioner (Central), was accused of demanding ₹5,000 from Kara Bhuian for processing the gratuity claims allegedly relating to his deceased parents, Tilak Bhuian and Akli Bhuini.

Kara Bhuian lodged a complaint with the CBI on 21 May 2002. After verification, the CBI arranged a trap on 22 May 2002, during which ₹3,750 in phenolphthalein-treated currency notes were allegedly handed over to the appellant and subsequently recovered near a medical shop.

The appellant was charged under Sections 7 and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act, 1988. The trial court convicted him and sentenced him to two years’ rigorous imprisonment with a fine of ₹5,000 under Section 7, and three years’ rigorous imprisonment with a fine of ₹10,000 under Section 13(2) read with Section 13(1)(d), with the sentences to run concurrently.

In appeal, the appellant contended that the complainant was not examined, the alleged demand and acceptance were not proved, the gratuity claim itself was doubtful, and the defence evidence had not been properly considered.

Whether the prosecution proved beyond reasonable doubt the foundational facts of demand, acceptance or obtainment, and recovery of illegal gratification so as to sustain the appellant’s conviction under Sections 7 and 13(1)(d) of the Prevention of Corruption Act, 1988?

Whether, in the absence of the complainant’s testimony, the demand and acceptance of illegal gratification could be established through the evidence of other witnesses and surrounding circumstances?

Whether the trial court’s failure to properly evaluate the defence evidence and record adequate reasons rendered the conviction unsustainable?

The Court applied Sections 7 and 13(1)(d), read with Section 13(2), of the Prevention of Corruption Act, 1988, under which proof of demand and acceptance or obtainment of illegal gratification is essential for conviction.

Section 20 creates a mandatory presumption regarding the purpose of gratification only after the prosecution establishes the foundational facts of acceptance or obtainment.

Relying on the Constitution Bench decision in Neeraj Dutta v. State (NCT of Delhi), (2023) 4 SCC 731, the Court held that demand and acceptance may be proved by direct, documentary or circumstantial evidence even if the complainant is unavailable; however, mere recovery or acceptance of money, without proof of the necessary demand or offer, is insufficient.

The presumption under Section 20 cannot arise in the absence of such foundational facts.

The Court also considered Section 19 concerning previous sanction for prosecution, though the appeal was ultimately decided on failure to prove demand, acceptance and recovery.

The Court found that the prosecution failed to establish the foundational facts required under Neeraj Dutta. The complainant was not examined, and the evidence of PW-3, an independent witness, did not establish the relevant conversation or show that the appellant demanded or accepted the money; PW-3 stated that he saw the treated currency lying on the ground.

PW-4, the shadow witness, was declared hostile and similarly stated that the complainant attempted to put the money into the appellant’s pocket but that the appellant pushed it away, causing the notes to scatter.

The Court also noted the inconsistency between the alleged demand of ₹5,000 and the production of only ₹3,750, with no evidence that the appellant agreed to accept the lesser amount.

Although the chemical tests supported contact with phenolphthalein, they did not independently prove a voluntary demand or conscious acceptance of bribe money.

Further, the defence evidence indicated that the complainant’s gratuity claim was delayed, unsupported by satisfactory proof of heirship, and ultimately dismissed, thereby undermining the prosecution’s suggested motive and the genuineness of the underlying claim.

The trial court had merely reproduced the evidence and failed to assess its probative value or deal adequately with the defence material.

The trial court’s judgment was found to be inadequately reasoned and based on non-consideration of material evidence.

Accordingly, the conviction and sentences under Sections 7 and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act were set aside; the appeal was allowed, and the appellant was discharged from the liability of his bail bond and sureties.