Supreme Court: Presumption U/s. 20 PC Act Cannot Arise On Mere Allegation Of Demand & Acceptance Of Illegal Gratification

The Court has allowed the appeal filed by Dileepbhai Nanubhai Sanghani (Appellant), a former Minister in the Government of Gujarat, setting aside the criminal proceedings initiated against him under the Sections 7, 8, 13(1)(a), 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988 (the Act). The Court held that proof of demand (or an offer) and acceptance of illegal gratification by a public servant is a fact in issue in the criminal proceeding and is a sine qua non to establish the guilt of the accused public servant under Sections 7 and 13 of the Act.

A Bench of Justice Sudhanshu Dhulia and Justice K Vinod Chandran held, “The presumption under Section 20 of the Act cannot arise on the mere allegation of a demand and acceptance of illegal gratification as rightly pointed out by the appellant. The question of presumption does not arise in the present case where the Special Court had merely examined the complainant and also summoned three witnesses, the officers of the investigation team, under Section 311 of the Cr.P.C. for the purpose of recording their statements.”

The Advocate Anjali Chauhan appeared for the Appellant, while Senior Advocate Iqbal Syed represented the Respondents.

Brief Facts

The Appellant was accused of granting fishing contracts in reservoirs vested with the State without following the government-mandated tender process, allegedly to benefit certain individuals in return for illegal gratification. The complainant, who was engaged in fish trading and sought to participate in the tender process, approached the Gujarat High Court, challenging the direct allocation of contracts. The High Court had canceled the grants and directed that the allocation be carried out through a proper tender process.

The complainant subsequently filed allegations of corruption against the Minister and other officials, which led to the registration of criminal proceedings. The High Court dismissed the Petition under Section 482 of the CrPC, holding that there was a prima facie case against him.

The Appellant argued that there was no evidence to support claims of corruption, bribery, or undue advantage to private parties. It was contended that the fishing contracts were granted at a pre-fixed upset price to benefit the Padhar Adivasi community, in line with the policy approved by the Fisheries Department, the Cabinet, and the Chief Minister. It was also pointed out that the investigation report itself had found no evidence of bribery or illegal gratification against the Appellant.

Court’s Reasoning

The Supreme Court clarified that the presumption under Section 20 of the Act is that, if there is a demand and acceptance of bribe, then there is a presumption that it is to dishonestly carry out some activity by a public servant, for which, first, proof will have to be offered of the demand and acceptance.

“It is not otherwise that, if there is a misuse of authority then there is always a presumption of a demand and acceptance of bribe, resulting in a valid allegation of corruption,” the Bench explained.

The Bench referred to the decision of the Constitution Bench in Neeraj Dutta v. State (NCT of Delhi) wherein it was held, “The presumption of fact with regard to the demand and acceptance or obtainment of an illegal gratification may be made by a court of law by way of an inference only when the foundational facts have been proved by relevant oral and documentary evidence and not in the absence thereof. On the basis of the material on record, the court has the discretion to raise a presumption of fact while considering whether the fact of demand has been proved by the prosecution or not. Of course, a presumption of fact is subject to rebuttal by the accused and in the absence of rebuttal presumption stands.”

“The only charge is with respect to misuse of authority which does not come under the provisions of the Prevention of Corruption Act and none of the ingredients regarding demand or obtaining or acceptance of bribe or any illegal gratification has come out,” the Court remarked.

Consequently, the Court held, “We make it clear that the observations made by us with respect to the first accused, insofar as the allegations having been raised, is only to emphasise that even such an accusation is not available as against the appellant herein. We merely spoke of the statements without looking at its veracity and our reference to such allegation should not govern the trial against the first accused, if it is proceeded with.”

Accordingly, the Supreme Court allowed the Appeal.

Cause Title: Dileepbhai Nanubhai Sanghani v. State of Gujarat & Anr. (Neutral Citation: 2025 INSC 280)

Appearance:

Appellant: Advocates Anjali Chauhan, Akhil Mittal and Sunil Mittal; AOR Meenakshi Kalra

Respondents: Senior Advocate Iqbal Syed; AOR Mohammad Aslam and Swati Ghildiyal; Advocates Saroj Kumar Sinha, Aniq Kadri, Amaan Syed, Prithu Parimal, Vishrut Bhandari, Devyani Bhatt and Abhipsa Mohanty

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