K. SHANTHAMMA VS THE STATE OF TELANGANA

K. SHANTHAMMA VS THE STATE OF TELANGANA

NON-REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 261 OF 2022

(Arising out of SLP (Criminal) No. 7182 of 2019)

K. SHANTHAMMA … APPELLANT

v.

THE STATE OF TELANGANA ... RESPONDENT

J U D G M E N T

ABHAY S. OKA, J.

Leave granted.

1. The Special Court under the Prevention of Corruption

Act, 1988 (for short ‘the PC Act’) convicted the appellant for

the offences punishable under Sections 7 and 13 (1)(d) read

with Section 13(2) of the PC Act. The order of conviction has

been confirmed in appeal by the High Court of Telangana.

2. The prosecution case, in brief, is that the appellant was

working as a Commercial Tax Officer at Secunderabad. PW1

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Shri R.Seetharamulu @ Sharma is the complainant. PW1 was

working at the relevant time as a supervisor in Farmers’

Service Co-operative Society (for short ‘the said Society’). He

was doing the work of filing returns of commercial tax of the

said Society. Though the assessment of the said Society for

the year 1997-98 was completed, till February 2000, the

returns of the said Society for the year 1996-97 remained

pending for assessment. The appellant issued a notice dated

14th February 2000 calling upon the said Society to produce

cash book, general ledger, and purchase and sales statements

for the year 1996-97. In February 2000, on the instructions of

the Managing Director of the said Society, PW1 attended the

office of the appellant along with the concerned record. After

PW1 showed the documents to the appellant, she called PW4

Ahmed Moinuddin, ACTO, and directed him to verify the

records. The case of PW1 is that on 24th February 2000, when

he met the appellant, she demanded a bribe of Rs.3,000/- for

issuing an assessment order. Though he showed

unwillingness to pay the amount, for consecutive three days,

the appellant reiterated the demand. On 29th February 2000,

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PW1 requested the appellant to issue final assessment order.

At that time, the appellant informed PW1 that unless the bribe

as demanded is paid, she will not issue final assessment

order. On 23rd March 2000, PW1 again approached the

appellant when she scaled down her demand to Rs.2,000/-.

3. On 27th March 2000, PW1, along with the Managing

Director of the said Society, visited the office of the AntiCorruption Bureau (ACB) at Hyderabad. PW1 filed a written

complaint to the Deputy Superintendent of Police, ACB.

Accordingly, a trap was laid. The allegation of the prosecution

is that when PW1 tendered the tainted currency notes of

Rs.2,000/- to the appellant in her office, instead of taking the

amount directly, she took out a diary from her table drawer

and opened the same. She asked the appellant to keep the

currency notes in the diary. Accordingly, PW1 kept the notes

in the said diary. After closing the diary, the appellant kept

the same in her table drawer. She locked the table drawer

and kept the key in her handbag. After that, she called ACTO

along with the record. The appellant signed on the last page

of the ledger and cash book by putting the date as 26th

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February 2000. Thereafter, the appellant directed the attender

to affix an official rubber stamp below her signature.

Accordingly, a rubber stamp was put by the attender. PW1

collected the general ledger and cash book from the attender,

and after coming out of the office, he gave a signal to the trap

party. Then the trap party entered the office of the appellant.

When the appellant was questioned by the Deputy

Superintendent of Police, she showed her right-hand side

table drawer. She took out the key of the drawer from her

handbag and opened the table drawer. She took out the diary

from the drawer and placed the same on the table. After the

diary was opened by the Deputy Superintendent of Police, he

found a wad of currency notes. The numbers on the currency

notes tallied with the serial numbers of currency notes

described in pre-trap proceedings. After that, the seizure was

carried out, and necessary formalities were completed. The

Special Court found that the demand of bribe and acceptance

of bribe was proved by the prosecution. The High Court has

affirmed the said finding.

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4. Mrs. V. Mohana, the learned Senior counsel appearing

for the appellant, has taken us through the evidence of the

prosecution witnesses. Her first submission is that the

demand for a bribe by the appellant was not proved, and the

evidence of PW1 to that effect is an improvement. Moreover,

LW8, who was instructed by the Deputy Superintendent of

Police of ACB to accompany PW1 inside the chamber of the

appellant, did not enter the chamber along with the appellant.

She pointed out that when the sodium carbonate test was

conducted, the fingers of the appellant did not turn pink;

therefore, it was not established that she accepted the

currency notes. The alleged recovery of currency notes was

shown from a diary. The recovery has not been proved. She

pointed out the appellant’s defence that PW1 deliberately kept

the currency notes in the diary lying on her table when she

went to the washroom before leaving her office. Her

submission is that the recovery of currency notes has not

been proved.

5. The learned Senior Counsel pointed out that the notice

dated 26th February 2000 issued by the appellant was

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admittedly served on the said Society on 15th March 2000,

which recorded that the net turnover of the said Society was

nil in the year 1996-97. Therefore, the Society was not liable

to pay any tax. Her submission is that this makes the entire

prosecution case about the demand extremely doubtful. She

pointed out that PW4, ACTO had a grudge against the

appellant as, admittedly on 22nd March 2000, the appellant

had served a memo on him pointing out the defaults

committed by him in the discharge of his duties. The learned

counsel relied upon various decisions of this Court in support

of the proposition that unless the demand and acceptance of

bribe are established, a presumption under Section 20 of the

PC Act will not apply. She urged that the demand and

acceptance have not been proved. She also pointed out the

case made out by the appellant in her statement under

Section 313 of the Code of Criminal Procedure, 1973 (for short

“the CrPC”). Her defence is that at about 5.30 pm on 27th

March 2000, she went to the washroom attached to her

chamber before leaving the office. When she came back, she

found PW1 sitting in her room. She informed PW1 that the file

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was no longer pending with her. Afterward, she called PW4-

ACTO through the attender and returned the account books to

PW1. She pointed out that PW7, P.V.S.S.P. Raju, and PW8,

U.V.S.Raju, the then Deputy Superintendent of Police, ACB,

Hyderabad, accepted that there is a washroom attached to the

chamber of the appellant. She submitted that both the Courts

have committed an error by convicting the appellant.

6. Ms. Bina Madhavan, the learned counsel appearing for

the respondent, supported the impugned Judgments. She

pointed out that the evidence of PW1 on continuous demands

made by the appellant is trustworthy as there is no reason for

PW1 to make any false allegation or falsely implicate the

appellant. She submitted that the tainted notes were found in

the diary of the appellant, which was kept in her table drawer.

She was in possession of keys of the table drawer. She herself

opened the table drawer and produced the diary from her

custody in which tainted notes were kept. Her submission is

that though communication may have been served on the said

Society on 15th March 2000 recording that the Society is not

liable to pay any amount, the appellant did not issue the final

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assessment order. She pointed out that the demand made by

the appellant was for issuing final assessment order, which

was issued on the day of the trap. Her submission is that the

Special Court and the High Court, after appreciating the

evidence, have recorded findings of fact based on evidence on

record. Her submission is that under Article 136 of the

Constitution of India, no interference is called for.

7. We have given careful consideration to the submissions.

We have perused the depositions of the prosecution witnesses.

The offence under Section 7 of the PC Act relating to public

servants taking bribe requires a demand of illegal gratification

and the acceptance thereof. The proof of demand of bribe by a

public servant and its acceptance by him is sine quo non for

establishing the offence under Section 7 of the PC Act. In the

case of P. Satyanarayana Murthy v. District Inspector of

Police, State of Andhra Pradesh and another1

, this Court

has summarised the well-settled law on the subject in

paragraph 23 which reads thus:

1

(2015) 10 SCC 152

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“23. The proof of demand of illegal

gratification, thus, is the gravamen of the

offence under Sections 7 and 13(1)(d)(i) and (ii)

of the Act and in absence thereof,

unmistakably the charge therefor, 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 these two sections of the Act. As a

corollary, 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

Section 7 or 13 of the Act would not entail

his conviction thereunder.”

 (emphasis added)

8. The prosecution’s case is that the appellant had kept

pending the return of commercial tax filed by the said Society

for the year 1996-97. The appellant had issued a notice dated

14th February 2000 to the said Society calling upon the said

Society to produce the record. Accordingly, the necessary

books were produced by the said Society. The case made out

by PW1 is that when he repeatedly visited the office of the

appellant in February 2020, the demand of Rs.3,000/- by way

of illegal gratification was made by the appellant for passing

the assessment order. However, PW1, in his crossexamination, accepted that the notice dated 26th February

10

2000 issued by the appellant was received by the said Society

on 15th March 2000 in which it was mentioned that after

verification of the books of accounts of the said Society,

exemption from payment of commercial tax as claimed by the

said Society was allowed. PW1 accepted that it was stated in

the said notice that there was no necessity for the said Society

to pay any commercial tax for the assessment year 1996-97.

According to the case of the PW1, on 23rd March 2000, he

visited the appellant’s office to request her to issue final

assessment order. According to his case, at that time,

initially, the appellant reiterated her demand of Rs.3,000/-.

But she scaled it down to Rs.2,000/-. Admittedly, on 15th

March 2000, the said Society was served with a notice

informing the said Society that an exemption has been

granted from payment of commercial tax to the said Society.

Therefore, the said Society was not liable to pay any tax for the

year 1996-97. The issue of the final assessment order was

only a procedural formality. Therefore, the prosecution’s case

about the demand of bribe made on 23rd March 2000 by the

appellant appears to be highly doubtful.

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9. PW1 described how the trap was laid. In the pre-trap

mediator report, it has been recorded that LW8, Shri R.Hari

Kishan, was to accompany PW1 - complainant at the time of

offering the bribe. PW7 Shri P.V.S.S.P. Raju deposed that

PW8 Shri U.V.S. Raju, the Deputy Superintendent of Police,

ACB, had instructed LW8 to accompany PW1 - complainant

inside the chamber of the appellant. PW8 has accepted this

fact by stating in the examination-in-chief that LW8 was asked

to accompany PW1 and observe what transpires between the

appellant and PW1. PW8, in his evidence, accepted that only

PW1 entered the chamber of the appellant and LW8 waited

outside the chamber. Even PW7 admitted in the crossexamination that when PW1 entered the appellant’s chamber,

LW8 remained outside in the corridor. Thus, LW8 was

supposed to be an independent witness accompanying PW1.

In breach of the directions issued to him by PW8, he did not

accompany PW1 inside the chamber of the appellant, and he

waited outside the chamber in the corridor. The prosecution

offered no explanation why LW8 did not accompany PW1

inside the chamber of the appellant at the time of the trap.

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10. Therefore, PW1 is the only witness to the alleged demand

and acceptance. According to PW1, firstly, the demand was

made of Rs.3,000/- by the appellant on 24th February 2000.

Thereafter, continuously for three days, she reiterated the

demand when he visited the appellant’s office. Lastly, the

appellant made the demand on 29th February 2000 and 23rd

March 2000. On this aspect, he was cross-examined in detail

by the learned Senior Counsel appearing for the appellant.

His version about the demand and acceptance is relevant

which reads thus :

“In the vicinity of office of AO the jeep, in which

we went there was stopped and I was asked to go

into the office of AO and the trap party took

vantage positions. Accordingly, I went inside the

office of AO. I wished AO. At that time apart

from AO some other person was found in the

office room of AO and he was talking to the AO.

AO offered me a chair. After discussion with the

AO the said other person left the room of AO. I

informed AO that I brought the bribe amount as

demanded by her and also asked her to issue the

Final Assessment Orders. Then I took the said

tainted currency notes from my shirt pocket and

I was about to give the same to the AO and on

which instead of taking the same amount directly

by her with her hands she took out a diary from

her table drawer, opened the diary and asked me

to keep the said amount in the diary.

Accordingly, I kept the amount in the said diary.

She closed the said diary and again kept the

13

same in her table drawer and locked the drawer

and kept the keys in her hand bag which was

hanging to her seat. She pressed the calling bell

and a lady attender came into the room of AO,

then she instructed the lady attender to call

concerned ACTO to her along with the concerned

society records.

Accordingly, ACTO came to AO along with record.

After going through the Ledger and Cash Book

etc., AO signed on the last page of the said

Ledger and Cash Book mentioning 26.02.2000

below her signature in the said register though

she signed on 27.03.2000 in my presence. AO

directed her attender to affix official rubber

stamp below her signature in the Ledger and

Cash Book and accordingly attender affixed the

same. AO also signed on the office note of Final

Assessment Orders at that time. Thereafter, I

collected the General Ledger and Cash Book from

the attender after affixing the said rubber stamp

thereon and came out of the office of AO and

relayed the pre-arranged signal to the trap

party.”

 (underlines supplied)

11. Thus, PW1 did not state that the appellant reiterated her

demand at the time of trap. His version is that on his own, he

told her that he had brought the amount. What is material is

the cross-examination on this aspect. In the crossexamination, PW1 accepted that his version regarding the

demand made by the appellant on various dates was an

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improvement. The relevant part of the cross-examination of

the appellant reads thus:

“I did not state to ACB Inspector in section 161

Cr.P.C. statement that on the evening of

24.02.2000 I met the AO and that she

demanded the bribe. I did not mention in Ex.P3

complaint that continuously for 3 days after

24.02.2000 I met the AO and the AO reiterated

her demand. I did not mention in Ex.P3

complaint that on 29.02.2000 I approached the

AO and the AO demanded bribe of Rs.3,000/-

and that unless I pay the said bribe amount she

will not issue final assessment orders. I did not

state in my Sec.164 statement before the

Magistrate that 13.03.2000 to 16.03.2000 I was

on leave and from 01.03.2000 to 12.03.2000, I

was engaged in recovering the dues of the

society. It is not true to suggest that I did not

meet the AO continuously 3 days i.e., on 25th,

26th and 27th of February, 2000 and that

27.02.2000 is Sunday. It is not true to suggest

that I did not meet the AO in the evening of

24.02.2000 and that AO did not demand any

money from me. I did not state in my section

161 Cr.P.C. statement to Inspector of ACB that

before I left the office of DSP on the date of trap

I made a phone call enquiring about the

availability of AO and the AO was in the office

and informed me that she should be available in

the office from 6.00 to 7.00 P.M. on that day so

also in my Sec.164 Cr.P.C. I made such a

phone call from the office of the DSP, ACB. I do

not remember as to from which phone number I

made phone call on that day. I cannot describe

office telephone number of the AO. It is not true

to suggest that I did not make any such phone

call to AO and that she did not give any such

reply to me. I did not state to ACB Inspector in

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my 161 Cr.P.C. statement or to the Magistrate

in my S.164 Cr.P.C. statement that I went

inside the office of AO and I wished AO and at

that time apart from AO some other person was

found in the office room of AO and that he was

talking to the AO and that the AO offered me a

chair and that after discussion with the AO the

said person left the room of AO and then I

informed the AO that I brought the bribe

amount. I did not state that said aspects to

DSP during the post trap proceedings also.

 (underlines supplied)

12. Thus, the version of PW1 in his examination-in-chief

about the demand made by the appellant from time to time is

an improvement. As stated earlier, LW8 did not enter the

appellant’s chamber at the time of trap. There is no other

evidence of the alleged demand. Thus, the evidence of PW1

about the demand for bribe by the appellant is not at all

reliable. Hence, we conclude that the demand made by the

appellant has not been conclusively proved.

13. PW2, Shri B.D.V. Ramakrishna had no personal

knowledge about the demand. However, he accepted that on

15th March 2000, the said Society received a communication

informing that the said Society need not pay any tax for the

year 1996-97. PW3 Shri L. Madhusudhan was working as

Godown Incharge with the said Society. He stated that on 15th

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March 2000, when he visited the appellant’s office, ACTO

served the original notice dated 26th February 2000 in which it

was mentioned that the Society was not liable to pay any tax.

It is his version that when he met the appellant on the same

day, she enquired whether he had brought the demanded

amount of Rs.3,000/-. However, PW3 did not state that the

appellant demanded the said amount for granting any favour

to the said society.

14. PW 4 Ahmed Moinuddin was ACTO at the relevant time.

He deposed that on 27th March 2000, the appellant instructed

him to prepare the final assessment order, which was kept

ready in the morning. He stated that he was called at 6 pm to

the chamber of the appellant along with books of the said

Society. At that time, PW1 was sitting there. He stated that

the appellant subscribed her signature on a Register of the

said Society and put the date as 26th February 2000 below it.

He was not a witness to the alleged demand. However, in the

cross-examination, he admitted that the appellant had served

a memo dated 21st March 2000 to him alleging that he was

careless in performing his duties.

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15. Thus, this is a case where the demand of illegal

gratification by the appellant was not proved by the

prosecution. Thus, the demand which is sine quo non for

establishing the offence under Section 7 was not established.

16. Hence, the impugned Judgments will have to be set

aside. Accordingly, the appeal is allowed. The conviction of the

appellant for the offences punishable under Sections 7 and

13(1)(d) read with Section 13(2) of the PC Act is set aside and

the appellant is acquitted of the charges framed against her.

…………..…………………J

(AJAY RASTOGI)

…………..…………………J

(ABHAY S. OKA)

New Delhi;

February 21, 2022.

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