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
2
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,
3
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
4
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.
5
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
6
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
7
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
8
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
9
“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.
11
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.
12
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
14
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
15
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
16
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.
17
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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