Statutory Presumption U/S.20 Of Prevention Of Corruption Act Is Not Automatic & Same Arises When Foundational Facts Of Demand & Acceptance Are Proved: Supreme Court

The Appeal before the Apex Court arose from a judgment of the Andhra Pradesh High Court reversing the order of acquittal passed by the Court of Principal Special Judge for SPE and ACB Cases, Hyderabad. The appellant, who was the accused before the Trial Court, was convicted for offences under Sections 7 and 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 19881 and was sentenced to undergo rigorous imprisonment for one year with a fine of ₹10,000 on each count.

Referring to the judgment in Rajesh Gupta vs. State through Central Bureau of Investigation (2022), the Division Bench of Justice Prashant Kumar Mishra and Justice Joymalya Bagchi stated, “The statutory presumption under Section 20 of the PC Act is not automatic and arises only once the foundational facts of demand and acceptance are proved.The same has been reiterated time and again by this Court…”

AOR Y. Raja Gopala Rao represented the Appellant while Advocate Kumar Vaibhaw represented the Respondent.

Factual Background

The appellant was an Assistant Commissioner of Labour, Circle I, at Anjaiah Karmica Bhavan, Ashoknagar, Hyderabad. The complainant (PW-1), a licensed Labour Contractor, made an application to the appellant in connection with the renewal of contract labour licenses for two establishments operated by him for the year 1997-1998. The appellant allegedly verified and signed the registers produced by the complainant, but he kept postponing the renewal of the licenses on some pretext or the other. The case of the prosecution was that the appellant allegedly demanded a sum of Rs 9,000 as a bribe for renewing the three licenses, failing which he would keep the renewals pending.

Allegedly, a part payment of Rs 3,000 was made by the complainant by placing the money in the appellant’s table drawer and the remaining amount of Rs 6,000 was demanded to be paid within one to two days. The complainant approached the Anti-Corruption Bureau. Allegedly, during the trap proceedings, the complainant enquired about the status of his licenses, in response to which the appellant asked if the complainant had brought the amount demanded by him earlier. When the complainant extracted the tainted amount from his shirt pocket, the appellant indicated that he should place the same in his left table-drawer. Having thus allegedly received the money, the appellant signed the licenses and asked the complainant to go to one Gopal Rao and take them.

Later on, a sanction order was obtained for the prosecution of the appellant, and a chargesheet came to be filed. The Trial Court acquitted the appellant, holding that the prosecution had failed to prove demand and acceptance of a bribe beyond a reasonable doubt. Aggrieved by such an order of acquittal, the State of Andhra Pradesh preferred an appeal, and the High Court convicted the appellant for the offences under Sections 7 and 13(1)(d) read with Section 13(2) of the PC Act. Hence, the appellant approached the Apex Court.

Reasoning

Expounding on the law relating to the matters pertaining to appeal against acquittal, the Bench explained that an Appellate Court undoubtedly has full power to review and reappreciate evidence in an appeal against acquittal under Sections 378 and 386 of the Code of Criminal Procedure, 1973. However, due to the reinforced or ‘double’ presumption of innocence after acquittal, interference must be limited. “If two reasonable views are possible on the basis of the record, the acquittal should not be disturbed. Judicial intervention is only warranted where the Trial Court’s view is perverse, based on misreading or ignoring material evidence, or results in manifest miscarriage of justice. Moreover, the Appellate Court must address the reasons given by the Trial Court for acquittal before reversing it and assigning its own”, it explained.

On a perusal of the facts of the case, the Bench noted that the High Court had returned an erroneous finding that the negative ‘hand-wash test’ was “the first circumstance relied upon by the lower Court in favour of the accused.” It was noted that the negative result of the ‘hand-wash’ test was only one of several suspicious circumstances considered by the Trial Court, not the first or most determinative one. “For either side, the ‘handwash’ test and the negative result thereof is of no consequence as it cannot advance the case one way or the other. What is troubling is that the High Court has nevertheless seized upon this circumstance and gone on to attribute wrongful intent to the appellant. We take this opportunity to reiterate that suspicion, however strong, cannot take the place of proof”, it added.

Referring to the testimonies of the defence witnesses, the Bench noted that the testimonies could not be brushed aside as manufactured, and they directly supported the appellant’s explanation that the complainant took advantage of his brief absence to place the tainted notes in the drawer without any demand or acceptance by the appellant. “A witness’s evidence is not to be rejected merely because he appeared before or dealt with the accused in an official or professional capacity, particularly when it was in course of their business that they visited the spot i.e., they are ‘natural’ witnesses”, it added.

The Bench was of the view that the Trial Court’s view was both reasonable and firmly rooted in the evidence on record. The acquittal was based on careful evaluation of this evidence, including the material contradictions, unreliable testimonies, and serious procedural lapses, and the same could not be termed perverse or unsustainable. As per the Bench, the High Court did not demonstrate any compelling reason to depart from that view and failed to engage with the Trial Court’s detailed reasoning and instead substituted its own inferences without addressing the evidentiary gaps.

“To describe inspection as an exploitative device and then conjecture that a file was cleared only because ₹3,000/- was paid as a bribe, as the High Court has done, is totally unwarranted. Contract labour regulation is necessarily precarious, and an officer cannot be faulted and aspersed for requiring documentary proof of compliance, especially when the request is recorded in writing”, it held while allowing the appeal and restoring the acquittal.

Cause Title: P. Somaraju v. State of Andhra Pradesh (Neutral Citation: 2025 INSC 1263)

Appearance

Appellant: AOR Y. Raja Gopala Rao, Advocates Dhuli Gopi Krishna, Akshay Singh, Sanjana Jain

Respondent: Advocate Kumar Vaibhaw, AOR Devina Sehgal, Advocates Srikanth Varma Mudunuru, Ishaan Ojha

Click here to read/download Judgment