Mere Recovery Of Tainted Money Without Proof Of Bribe Demand Cannot Sustain Conviction Under PC Act: Supreme Court

Finding that the prosecution failed to prove either demand or acceptance, the Court set aside the conviction of a deceased former Patwari whose legal representatives had continued his appeal.

The Court was hearing an appeal against a Punjab and Haryana High Court judgment affirming the former Patwari’s conviction under Section 7 read with Section 13(2) of the Prevention of Corruption Act, 1988. The Trial Court had sentenced him to two years’ rigorous imprisonment and imposed a fine of ₹10,000.

A Bench of Justice Ujjal Bhuyan and Justice Arun Palli observed: “This Court in P. Satyanarayana Murthy Vs. State of A.P. held that proof of demand of illegal gratification is the gravamen of the offence under Sections 7 and 13(1)(d)(i) and (ii) of the PC Act; in absence thereof, the charge would fail. Mere acceptance of any amount allegedly by way of illegal gratification or recovery thereof, dehors the proof of demand, ipso facto would thus not be sufficient to bring home the charge under the aforesaid two sections of the PC Act. Therefore, failure of the prosecution to prove the demand for illegal gratification would be fatal and mere recovery of the amount from the person accused of the offence under Sections 7 or 13 of the PC Act would not entail his conviction thereunder.”

Advocate R.K. Kapoor appeared for the appellant. Advocate Abha Sharma, AOR, represented the State of Punjab.

Background

The appellant was serving as a Patwari when the complainant approached him for mutation of his deceased brother’s property in favour of the legal heirs. The prosecution alleged that the appellant demanded ₹10,000 for completing the mutation and later agreed to accept ₹9,500.

The complainant approached the Vigilance Bureau, which organised a trap. Nineteen currency notes of ₹500 each were treated with phenolphthalein powder and returned to the complainant with instructions to hand them over only upon demand.

A friend of the complainant was appointed as the shadow witness. Two government officials were also associated with the raiding party.

According to the prosecution, the complainant handed over the tainted currency to the appellant, who placed it in his trouser pocket. Following a signal, the raiding party entered the office and recovered the currency. The sodium-carbonate solution allegedly turned pink when the appellant’s fingers were dipped into it.

The Special Court convicted the appellant under Section 7 read with Section 13(2) of the Prevention of Corruption Act, 1988. The Punjab and Haryana High Court dismissed his appeal and affirmed the conviction and sentence.

The Supreme Court subsequently released him on bail after he had remained incarcerated for approximately seven months. He died while the appeal was pending, following which his legal representatives were permitted to continue the proceedings.

Court’s Observations

The Court referred to P. Satyanarayana Murthy v. State of Andhra Pradesh (2015), which held that proof of demand is the gravamen of the offences under Sections 7 and 13(1)(d)(i) and (ii) of the Prevention of Corruption Act, 1988. Recovery of money, without proof of demand, does not establish the offence.

It then considered the Constitution Bench judgment in Neeraj Dutta v. State (Government of NCT of Delhi) (2023). The Constitution Bench held that demand and acceptance may be proved through direct oral or documentary evidence and, in the absence of such direct evidence, through circumstantial evidence.

The Court explained: “Thus among other things what the Constitution Bench declared was that proof of demand and acceptance of illegal gratification by a public servant is the sine qua non to establish the guilt of the public servant under Sections 7 and 13 (1) (d) (i) and (ii) of the PC Act. An offer by the bribe giver and the demand by the public servant have to be proved by the prosecution as a fact in issue for conviction under Sections 7 and 13(1)(d)(i) and (ii) of the PC Act.”

The Court clarified that Neeraj Dutta (2023) permits an inferential finding of culpability from other prosecution evidence where the complainant’s direct evidence is unavailable. However, an inference still requires reliable evidence proving the fact in issue and cannot arise solely from recovery.

The Court also relied on Aman Bhatia v. State (2025), where it was held that the prosecution must prove beyond reasonable doubt that the public servant voluntarily accepted the money knowing it to be a bribe.

Quoting that principle, the Court noted: “From the above exposition of law, it may be safely concluded that mere possession and recovery of tainted currency notes from a public servant, in the absence of proof of demand, is not sufficient to establish an offence under Sections 7 and 13(1)(d) of the PC Act respectively.”

The complainant claimed that he handed over the tainted currency to the appellant upon demand. However, the shadow witness stated that he had left the office because the appellant appeared busy. He returned only after receiving a signal from the complainant that the money had already been handed over.

The shadow witness expressly stated that the payment was not made in his presence. He also said that he stood behind the members of the vigilance team during the subsequent proceedings and could not see what they were doing.

The Court observed: “PW-2 categorically stated that the money allegedly paid by Kulwant Singh, the informant, to the accused-appellant was not in his presence because at that point of time, he had come out of the office. According to him, none from the raiding party saw any demand nor acceptance of the bribe money.”

The official witness associated with the raiding party also admitted that the complainant had not handed over the money to the appellant in his presence.

The Court identified a material discrepancy concerning the place from which the tainted currency was allegedly recovered. The complainant claimed that the appellant placed the notes in his trouser pocket and that they were recovered from there.

The shadow witness’s police statement, however, recorded that he had been informed that the notes were recovered from the appellant’s shirt pocket. The official witness also stated that the vigilance officer recovered them from the front pocket of the appellant’s shirt.

The Court noted: “There is a contradiction in as much as PW-1 in his complaint and evidence stated that appellant had kept the bribe money in the pocket of his trousers from where it was recovered and seized. But according to PW-2, he was informed by the vigilance party that the money was seized from the shirt pocket of the appellant.”

The shadow witness further asserted during cross-examination that the recovery was not made in his presence. Thus, neither the alleged demand and payment nor the circumstances of recovery received reliable corroboration.

The Court found that no witness had seen the appellant demand the bribe. Nor had anyone other than the complainant allegedly seen the money being handed over or accepted.

It held: “Under such circumstances, it is evident that neither the demand nor acceptance of the bribe can be said to have been proved. As a matter of fact, no one saw the appellant making the demand for bribe and no one saw PW-1 handing over the bribe money to the appellant nor acceptance of the same by the appellant.”

The Court consequently held that the case was governed by P. Satyanarayana Murthy (2015), Neeraj Dutta (2023) and Aman Bhatia (2025), and that the conviction could not survive.

Conclusion

The Supreme Court set aside the judgments of the Special Court and the Punjab and Haryana High Court. It declared that the prosecution had failed to prove the charges under Sections 7 and 13(2) of the Prevention of Corruption Act, 1988, and cleared the deceased appellant of those charges.

The appeal pursued by his legal representatives was accordingly allowed.

Cause Title: Jaswinder Singh (Dead Through Legal Representatives) v. State of Punjab (Neutral Citation: 2026 INSC 1031)

Appearances

Appellant: Advocates R.K. Kapoor, Rajat Kapoor, Najreena Sheikh, Shivangi Chaturvedi and Kheyali Singh, AOR

Respondent-State: Advocate Abha Sharma, AOR

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