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CASE NO.:

Appeal (crl.) 719 1995

PETITIONER:

N. NARSINGA RAO

Vs.

RESPONDENT:

STATE OF ANDHRA PRADESH

DATE OF JUDGMENT: 12/12/2000

BENCH:

U.C.Banerjee, R.P.Sethi

JUDGMENT:

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J U D G M E N T

THOMAS, J.

Can a legal presumption be based on a factual

presumption? The latter is discretionary whereas the former

is compulsory. Such a question arose in this appeal and in

view of the importance of the issue a two-Judge Bench has

referred this case to be heard by a larger bench. The legal

presumption envisaged in Section 20 of the Prevention of

Corruption Act 1988 (for short the Act) is that on proof

of certain fact the court shall presume certain other

fact. When there is no direct evidence for establishing the

primary fact the court has to depend upon the process of

inference drawn from other facts to reach the said primary

fact. The crux of the question involved, therefore, is

whether an inference thus made could be used as a premise

for the compulsory presumption envisaged in Section 20 of

the Act.

The aforesaid question arose from the following

assortment of facts. Appellant was manager of a Milk@@

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Chilling Centre attached to Andhra Pradesh Dairy Development

Co-operative Federation. He is alleged to have received

bribe money of Rs.500/- from a milk-transporting contractor

(PW1-Satya Prasad). He was caught red handed on 20.4.1989

in a trap arranged by the officials of the Anti Corruption

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Bureau (ACB). They charge-sheeted him before a Special

Court for offences under Sections 7 and 13(2) read with

Section 13(1)(d) of the Act. After trial the Special Judge

convicted him and sentenced him to rigorous imprisonment for

two years and a fine of Rs.2000/- under each of the above

counts. The High Court of Andhra Pradesh confirmed the

conviction but reduced the sentence of imprisonment to a

period of one year. This appeal is in challenge of the said

conviction and sentence.

A summary of the allegations made against the

appellant are thess: PW1-Satya Prasad was to get some

amount from Andhra Pradesh Dairy Development Corporation for

transporting milk to or from the Milk Chilling Centre at

Luxettipet (Adilabad district). He approached the appellant

for taking prompt steps so as to enable him to get the money

disbursed. But appellant demanded Rs.500/- for sending the

recommendation in favour of payment of the amount due to

PW1. As the appellant persisted with his demand PW1 yielded

to the same, but before handing over the money to the

appellant PW1 lodged a complaint (Ex.P2) with the DSP of

Anti Corruption Bureau. On the basis of the said complaint

PW7 (DSP) registered Ex.P18 FIR and then made all

arrangements for a trap to catch the corrupt public servant

red handed.

On 24.4.1984 PW1 brought the currency notes to the

office of the ACB for making up the demanded bribe amount.

The said currency notes were treated with phenolphthalein

powder by or at the direction of PW7 as preparation for the

trap. PW1 and the already arranged witness PW2 together

went to the house of the appellant by about noon. When

appellant asked whether the amount was brought PW1 handed

over the phenolphthalein smeared currency notes to the

appellant. He accepted the amount and put the currency

notes in his pocket. Thereupon, a pre-scheduled signal was

transmitted to the members of the ACB team who were waiting

outside. They suddenly rushed to the place where the

appellant was then standing, caught the appellant red-handed

and the tainted currency notes were recovered from his

pocket. All the usual follow up steps were thereafter

adopted by the ACB team and on completion of the

investigation the case was charge- sheeted against the

appellant.

It took four years thereafter for the Special Judge to

commence evidence taking for the prosecution. The said long

interval, perhaps, helped the appellant as is reflected from

the fact that PW1 and PW2 made a volte-face in the trial

court and they denied having paid any bribery to the

appellant and also denied that appellant demanded the bribe

amount. PW1 said, for the first time, that he acted at the

behest of one Dr. Krishna Rao and went to the office of the

appellant and did everything as directed by the said Krishna

Rao. Both the witnesses were declared hostile by the Public

Prosecutor and both were cross-examined in detail. After

examining the remaining witnesses for prosecution the

appellant was called upon to answer questions put to him

under Section 313 of the Code of Criminal Procedure (for

short the Code). He then submitted a written statement in

which he said that Dr. Krishna Rao bore grudge against him

and that person orchestrated this false trap against him by

employing PW1 and PW2. According to the appellant, the

tainted currency notes were forcibly stuffed into his

pocket. He examined two witnesses on the defence side and

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both of them said that on the dates when the alleged demand

was made by the appellant he was on tour at a different

place.

Both the trial court and the High Court disbelieved

the defence evidence in toto and found that PW1 and PW2 were

won over by the appellant and that is why they turned

against their own version recorded by the investigating

officer and subsequently by a magistrate under Section 164

of the Code. The Special Judge ordered those two witnesses

to be prosecuted for perjury and the said course suggested

by the trial judge found approval from the High Court also.

In the appeal the High Court dealt with the contention

that it is not possible to draw any presumption against the

delinquent public servant in the absence of direct evidence

to show that the public servant demanded bribery and that

the same was paid to him. Learned single judge of the High

Court observed thus on that aspect: It is true that there

is no direct evidence in this case that the accused demanded

and accepted the money. But the rest of the evidence and

the circumstances are sufficient to establish that the

accused had accepted the amount and that gives rise to a

presumption under section 20 of the Prevention of Corruption

Act that he accepted the same as illegal gratification,

particularly so when the defence theory put forth is not

accepted.

Mr. L. Nageswara Rao, learned counsel for the

appellant, adopted a twin contention. First is that the@@

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presumption under Section 20 of the Act could be drawn only

when the prosecution succeeded in establishing with direct

evidence that the delinquent public servant accepted or

obtained gratification. That premise cannot depend on an

inference for affording foundation for the legal presumption

envisaged in Section 20 of the Act, according to the learned

counsel. The second limb of his contention is that it is

not enough that some currency notes were handed over to the

public servant to make it acceptance of gratification.

Prosecution has a further duty to prove that what was paid

amounted to gratification, contended the counsel.

In support of the first contention, learned counsel

relied on the decision of a two judge bench of this court in

Sita Ram vs. State of Rajasthan {1975 (2) SCC 227}. It was

held by the bench that on mere recovery of certain money

from the person of an accused without the proof of its

payment by or on behalf of some person to whom official

favour was to be shown the presumption cannot arise.

The said observation was made in the background of a

finding made by the High Court in that case that the

evidence of the witnesses was not reliable and particularly

because so many jerks and jolts seem to have been given to

the prosecution case by contradictory and hostile statements

of the witnesses that a good part of it had to be rejected

by the High Court. That decision and the observation could

thus confine to the facts of that case, and no legal

principle for future application could be discerned

therefrom.

Learned counsel then relied on another decision of a

two judge bench of this court in Suraj Mal vs. State (Delhi

Administration) {1979 (2) SCC 725} wherein the bench

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observed that in our opinion, mere recovery of money

divorced from the circumstances under which it is paid is

not sufficient to convict the accused when the substantive

evidence in the case is not reliable. In that case also the

said finding depended upon the veracity of the testimony of

the witnesses. But the contention raised by the learned

counsel in this case on the point convassed by him cannot

find any support from the said decision either.

While adverting to the first contention of the learned

counsel we may reproduce Section 20(1) of the Act. [That

sub- section is virtually the same as Section 4(1) of the

predecessor Act of 1947]. 20(1) Presumption where public

servant accepts gratification other than legal remuneration.

-(1) Where, in any trial of an offence punishable under

section 7 or section 11 or clause (a) or clause (b) of

sub-section (1) of section 13 it is proved that an accused

person has accepted or obtained or has agreed to accept or

attempted to obtain for himself, or for any other person,

any gratification (other than legal remuneration) or any

valuable thing from any person, it shall be presumed, unless

the contrary is proved, that he accepted or obtained or

agreed to accept or attempted to obtain that gratification

or that valuable thing, as the case may be, as a motive or

reward such as is mentioned in section 7 or, as the case may

be, without consideration or for a consideration which he

knows to be inadequate. Before proceeding further, we may

point out that the expressions may presume and shall

presume are defined in Section 4 of the Evidence Act. The

presumptions falling under the former category are

compendiously known as factual presumptions or

discretionary presumptions and those falling under the

latter as legal presumptions or compulsory presumptions.

When the expression shall be presumed is employed in

Section 20(1) of the Act it must have the same import of

compulsion.

When the sub-section deals with legal presumption it

is to be understood as in terrorum i.e. in tone of a

command that it has to be presumed that the accused accepted

the gratification as a motive or reward for doing or

forbearing to do any official act etc., if the condition

envisaged in the former part of the section is satisfied.

The only condition for drawing such a legal presumption

under Section 20 is that during trial it should be proved

that the accused has accepted or agreed to accept any

gratification. The section does not say that the said

condition should be satisfied through direct evidence. Its

only requirement is that it must be proved that the accused

has accepted or agreed to accept gratification. Direct

evidence is one of the modes through which a fact can be

proved. But that is not the only mode envisaged in the

Evidence Act. The word proof need be understood in the

sense in which it is defined in the Evidence Act because

proof depends upon the admissibility of evidence. A fact is

said to be proved when, after considering the matters before

it, the court either believes it to exist, or consider its

existence so probable that a prudent man ought, under the

circumstances of the particular case, to act upon the

supposition that it exists. This is the definition given

for the word proved in the Evidence Act. What is required

is production of such materials on which the court can

reasonably act to reach the supposition that a fact exists.

Proof of the fact depends upon the degree of probability of

its having existed. The standard required for reaching the

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supposition is that of a prudent man acting in any important

matter concerning him. Fletcher Moulton L.J. in Hawkins

vs. Powells Tillery Steam Coal Company, Ltd. [1911 (1)

K.B. 988] observed like this: Proof does not mean proof

to rigid mathematical demonstration, because that is

impossible; it must mean such evidence as would induce a

reasonable man to come to a particular conclusion".

The said observation has stood the test of time and@@

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can now be followed as the standard of proof. In reaching

the conclusion the court can use the process of inferences

to be drawn from facts produced or proved. Such inferences

are akin to presumptions in law. Law gives absolute

discretion to the court to presume the existence of any fact

which it thinks likely to have happened. In that process

the court may have regard to common course of natural

events, human conduct, public or private business vis-à-vis

the facts of the particular case. The discretion is clearly

envisaged in Section 114 of the Evidence Act. Presumption

is an inference of a certain fact drawn from other proved

facts. While inferring the existence of a fact from

another, the court is only applying a process of intelligent

reasoning which the mind of a prudent man would do under

similar circumstances. Presumption is not the final

conclusion to be drawn from other facts. But it could as

well be final if it remains undisturbed later. Presumption

in Law of Evidence is a rule indicating the stage of

shifting the burden of proof. From a certain fact or facts

the court can draw an inference and that would remain until

such inference is either disproved or dispelled. For the

purpose of reaching one conclusion the court can rely on a

factual presumption. Unless the presumption is disproved or

dispelled or rebutted, the court can treat the presumption

as tantamounting to proof. However, as a caution of

prudence we have to observe that it may be unsafe to use

that presumption to draw yet another discretionary

presumption unless there is a statutory compulsion. This

Court has indicated so in Suresh Budharmal Kalani vs. State

of Maharashtra [1998 (7) SCC 337]. A presumption can be

drawn only from facts - and not from other presumptions by

a process of probable and logical reasoning. Illustration

(a) to Section 114 of the Evidence Act says that the court

may presume that a man who is in the possession of stolen

goods soon after the theft is either the thief or has

received the goods knowing them to be stolen, unless he can

account for his possession. That illustration can

profitably be used in the present context as well when

prosecution brought reliable materials that appellants

pocket contained phenolphthalein smeared currency notes for

Rs.500/- when he was searched by PW-7 DSP of the Anti

Corruption Bureau. That by itself may not or need not

necessarily lead to a presumption that he accepted that

amount from somebody else because there is a possibility of

somebody else either stuffing those currency notes into his

pocket or stealthily inserting the same therein. But the

other circumstances which have been proved in this case and

those preceding and succeeding the searching out of the

tainted currency notes, are relevant and useful to help the

court to draw a factual presumption that appellant had

willingly received the currency notes.

PW-7 DSP said that PW-1 approached him on the previous

day and lodged Ext.P-2 complaint stating that appellant was

persistently demanding Rs.500/- from him. The currency

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notes were actually prepared by PW-7 by smearing them with

phenolphthalein powder. When appellant was caught red

handed with those currency notes he never demurred to PW-7

that those notes were not received by him. In fact, the

story that such currency notes were stuffed into his pocket

was concocted by the appellant only after lapse of a period

of 4 years and that too when appellant faced the trial in

the court. From those proved facts the court can

legitimately draw a presumption that appellant received or

accepted the said currency notes on his own volition. Of

course, the said presumption is not an inviolable one, as

the appellant could rebut it either through

cross-examination of the witnesses cited against him or by

adducing reliable evidence. But if the appellant fails to

disprove the presumption the same would stick and then it

can be held by the court that the prosecution has proved

that appellant received the said a mount. In Raghubir Singh

vs. State of Haryana [1974 (4) SCC 560] V.R. Krishna Iyer,

J, speaking for a three Judge Bench, observed that the very

fact of an Assistant Station Master being in possession of

the marked currency notes against an allegation that he

demanded and received that amount is res ipsa loquitur.

In this context the decision of a two Judge Bench of this

Court (R.S. Sarkaria and O. Chinnappa Reddy, JJ) in Hazari

Lal vs. Delhi (Delhi Administration) [1980 (2) SCC 390] can

usefully be referred to. A police constable was convicted

under Section 5(2) of the Prevention of Corruption Act,

1947, on the allegation that he demanded and received

Rs.60/- from one Sriram who was examined as PW-3 in that

case. In the trial court PW-3 resiled from his previous

statement and was declared hostile by the prosecution. The

official witnesses including PW-8 have spoken to the

prosecution version. The court found that phenolphthalein

smeared currency notes were recovered from the pocket of the

police constable. A contention was raised in the said case

that in the absence of direct evidence to show that the

police constable demanded or accepted bribery no presumption

under Section 4 of the Act of 1947 could be drawn merely on

the strength of recovery of the marked currency notes from

the said police constable. Dealing with the said contention

Chinnappa Reddy, J. (who spoke for the two Judge Bench)

observed as follows: It is not necessary that the passing

of money should be proved by direct evidence. It may also

be proved by circumstantial evidence. The events which

followed in quick succession in the present case lead to the

only inference that the money was obtained by the accused

from PW3. Under Section 114 of the Evidence Act the court

may presume the existence of any fact which it thinks likely

to have happened, regard being had to the common course of

natural events, human conduct and public and private

business, in their relation to facts of the particular case.

One of the illustrations to Section 114 of the Evidence Act

is that the court may presume that a person who is in

possession of the stolen goods soon after the theft, is

either the chief or has received the goods knowing them to

be stolen, unless he can account for his possession. So

too, in the f acts and circumstances of the present case the

court may presume that the accused who took out the currency

notes from his pocket and flung them across the wall had

obtained them from PW3, who a few minutes earlier was shown

to have been in possession of the notes. Once we arrive at

the finding that the accused had obtained the money from

PW3, the presumption under Section 4(1) of the Prevention of

Corruption Act is immediately attracted. The presumption is

of course rebuttable but in the present case there is no

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material to rebut the presumption. The accused was,

therefore, rightly convicted by the courts below. The

aforesaid observation is in consonance with the line of

approach which we have adopted now. We may say with great

respect to the learned Judges of the two Judge Bench that

the legal principle on this aspect has been correctly

propounded therein.

Regarding the second limb of the contention advanced

by Shri Nageshwar Rao, learned counsel for the appellant

(that it was not gratification which the appellant has

received) we think it is not necessary to deal with the

matter in detail because in a recent decision rendered by us

the said aspect has been dealt with at length. [Vide

Madhukar Bhaskarrao Joshi vs. State of Maharashtra, JT 2000

(supple.2) SC 458]. The following statement made by us in

the said decision would be the answer to the aforesaid

contention raised by the learned counsel: The premise to

be established on the facts for drawing the presumption is

that there was payment or acceptance of gratification. Once

the said premise is established the inference to be drawn is

that the said gratification was accepted as motive or

reward for doing or forbearing to do any official act. So

the word gratification need not be stretched to mean

reward because reward is the outcome of the presumption

which the court has to draw on the factual premise that

there was payment of gratification. This will again be

fortified by looking at the collocation of two expressions

adjacent to each other like gratification or any valuable

thing. If acceptance of any valuable thing can help to draw

the presumption that it was accepted as motive or reward for

the official act, the word gratification must be treated

in the context to mean any payment for giving satisfaction

to the public servant who received it.

We, therefore, agree with the finding of the trial

court as well as the High Court that prosecution has proved

that appellant has received gratification from PW1. In such

a situation the court is under a legal compulsion to draw

the legal presumption that such gratification was accepted

as a reward for doing the public duty. Of course, the

appellant made a serious endeavour to rebut the said

presumption through two modes. One is to make PW1 and PW2

speak to the version of the appellant and the other is by

examining two witnesses on the defence side. True PW1 and

PW2 obliged the appellant. The two defence witnesses gave

evidence to the effect that the appellant was not present at

the station on the date when the alleged demand was made by

PW1. But the trial court and the High Court have held their

evidence unreliable and such a finding is supported by sound

and formidable reasoning. The concurrent finding made by

the two courts does not require any interference by this

Court.

In the result we dismiss this appeal.

[ K.T. Thomas ]