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REPORTABLE

IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. 2052 of 2010

State of Punjab                      …Appellant

Versus

Madan Mohan Lal Verma      …Respondent

  J U D G M E N T

Dr. B.S. CHAUHAN, J.

1. This appeal has been preferred against the impugned judgment  

and order dated 3.3.2009 in Criminal Appeal No. 414-SB/1996 passed  

by the High Court of Punjab and Haryana at Chandigarh, setting aside  

the judgment and order of the Trial Court dated 28.5.1996 by which  

the respondent stood convicted under the provisions of Sections 7 and  

13(1)(d) read with Section 13(2) of the Prevention of Corruption Act,  

1988 (hereinafter referred to as the ‘Act 1988’) and had been awarded  

the sentence of one year on each count and a fine of Rs.2,500/- was

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imposed, in default of payment of fine, to further undergo RI for one  

month.  

2. Facts and circumstances giving rise to this appeal are that:

A. The complainant - Naresh Kumar Kapoor was contacted by the  

respondent  –  the  Income  Tax  Inspector  who  threatened  him  with  

reopening the assessment order, particularly in respect of the house  

owned and possessed by his wife Smt. Neeru Kapoor bearing No. 456,  

Model Town, Jalandhar and for purchasing the car which had not been  

disclosed  by  the  complainant  in  his  income  tax  return.   The  

complainant and the respondent-accused had been in touch with each  

other and the respondent demanded a sum of Rs.25,000/- as illegal  

gratification for not reopening  the said assessment.

B. On 1.6.1994, the complainant - Naresh Kumar Kapoor (PW.7)  

alongwith  Raj  Kumar  Sharma  (PW.3)  went  to  the  house  of  

respondent-accused i.e. 638, Mota Singh Nagar, Jalandhar to negotiate  

for not reopening the assessment. The respondent-accused asked for a  

sum  of  Rs.25,000/-  as  illegal  gratification  and  the  complainant  

expressed his inability. On  this, respondent agreed to accept a sum of  

Rs.10,000/- as part payment of the illegal gratification to be paid on  

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the same day, and a further sum of Rs.15,000/- on the next day.  The  

complainant made a false promise of paying a sum of Rs. 10,000/- on  

the  same  day  i.e.  1.6.1994.  The  complainant  approached  Harish  

Kumar  (PW.12), DSP (Vigilance), Jalandhar  and they prepared to  

lay a trap.  

C. The  complainant  arranged  the  money  i.e.  20  notes  in  the  

denomination of Rs.500/- each.  Phenolphthalein powder was applied  

on the notes and the same were given to the complainant. The number  

of  those  notes  were  noted  separately  on  a  piece  of  paper.  The  

complainant  and  the  shadow  witness  Raj  Kumar  Sharma  (PW.3)  

washed  their  hands  and  approached  the  respondent-accused  at  his  

house. The complainant gave the money to the respondent-accused.  

He put it on the table and covered it with a newspaper. The shadow  

witness Raj Kumar (PW.3) gave the appointed signal to Harish Kumar  

Sharma  (PW.12)  DCP,  Gurlebleen  Singh  (PW.2),  the  Executive  

Magistrate and other members of the raiding party and  the money  

was recovered. Hands of the respondent-accused were washed in the  

sodium carbonate solution, which turned pink.  In view thereof, the  

criminal prosecution started.  

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D. After  investigation,  a  charge  sheet  was  filed  against  the  

respondent-accused.  The  prosecution  examined  12  witnesses  in  

support of its case and the defence also examined 9 witnesses.  On  

conclusion of the trial, the respondent was convicted and sentenced as  

referred to hereinabove.  

E. Aggrieved, the respondent preferred the criminal appeal before  

the High Court which has been allowed vide impugned judgment and  

order dated 3.3.2009.

Hence, this appeal.  

3. Shri Ashok Kumar Panda, learned senior counsel appearing for  

the appellant, has submitted that it was a fool-proof case. The Trial  

Court gave cogent reasons and there was no justification for the High  

Court  to  discard  the  case  of  the  prosecution.  All  the  witnesses  

including Gurlebleen Singh (PW.2), the Executive Magistrate, have  

fully  supported  the  prosecution’s  case.  The Trial  Court  found that  

there  had  been  a  demand  of  illegal  gratification  and  the  amount  

received by the respondent was duly recovered by the raiding party.  

Thus,  all  the  ingredients  to  constitute  the  offences  for  which  the  

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respondent  had  been  prosecuted  had  been  fulfilled.  Therefore,  the  

appeal deserves to be allowed.  

4. Per  contra,  respondent-in-person  has  submitted  that  the  

complainant  himself  was  an  industrialist  who  evaded  tax.  The  

complainant was also running an NGO and was the chairman of an  

Anti-Corruption Society. The other office bearers of the said society  

had also raised a large number of complaints against the son of the  

respondent-accused. The complainant had been threatening him and  

even attacked him and caused injuries  on 14.10.1994 in respect  of  

which there had been complaints  against  him.  The respondent  had  

also  filed  a  large  number  of  cases  in  criminal  courts  which  were  

settled by the officers of the CBI out of the court and in view thereof  

the cases were withdrawn. The parameters of interference against the  

order  of  acquittal  as  laid  down by  this  Court  have  to  be  applied.  

Therefore, the appeal is liable to be rejected.  

5. We  have  considered  the  rival  submissions  made  by  learned  

counsel for the appellant as well as the respondent in-person.  

6. It  is  a  settled  legal  proposition  that  in  exceptional  

circumstances, the appellate court for compelling reasons should not  

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hesitate to reverse a judgment of acquittal passed by the court below,  

if  the  findings  so  recorded  by  the  court  below  are  found  to  be  

perverse,  i.e.  if  the  conclusions  arrived  at  by  the  court  below are  

contrary to the evidence on record; or if the court’s  entire approach  

with  respect  to  dealing  with  the  evidence  is  found  to  be  patently  

illegal,  leading  to  the  miscarriage  of  justice;  or  if  its  judgment  is  

unreasonable and is based on an erroneous understanding of the law  

and of the facts of the case. While doing so, the appellate court must  

bear in mind the presumption of innocence in favour  of the accused,  

and  also  that  an  acquittal  by  the  court  below  bolsters  such  

presumption of innocence. (Vide: Abrar v. State of U.P., AIR 2011  

SC 354; Rukia Begum v. State of Karnataka, AIR 2011 SC 1585;  

and State of Madhya Pradesh v. Dal Singh & Ors., AIR 2013 SC  

2059).

7. The  law  on  the  issue  is  well  settled  that  demand  of  illegal  

gratification is sine qua non for constituting an offence under the Act  

1988. Mere recovery of tainted money is not sufficient to convict the  

accused when substantive evidence in the case is not reliable, unless  

there is evidence to prove payment of bribe or to show that the money  

was taken voluntarily as a bribe. Mere receipt of the amount by the  

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accused is not sufficient to fasten guilt, in the absence of any evidence  

with  regard  to  demand  and  acceptance  of  the  amount  as  illegal  

gratification. Hence, the burden rests on the accused to displace the  

statutory presumption raised under Section 20 of  the Act 1988, by  

bringing  on  record  evidence,  either  direct  or  circumstantial,  to  

establish with reasonable probability, that the money was accepted by  

him, other than as a motive or reward as referred to in Section 7 of the  

Act 1988. While invoking the provisions of Section 20 of the Act, the  

court is required to consider the explanation offered by the accused, if  

any, only on the touchstone of preponderance of probability and not  

on the touchstone  of  proof  beyond all  reasonable  doubt.  However,  

before  the  accused  is  called  upon  to  explain  how  the  amount  in  

question was found in his possession, the foundational facts must be  

established by the prosecution. The complainant is an interested and  

partisan  witness  concerned  with  the  success  of  the  trap  and  his  

evidence  must  be  tested  in  the  same  way  as  that  of  any  other  

interested  witness.  In  a  proper  case,  the  court  may  look  for  

independent corroboration before convicting the accused person.  

(Vide: Ram Prakash Arora v.  The State of Punjab AIR 1973 SC  

498; T. Subramanian v. The State of T.N., AIR 2006 SC 836; State  

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of  Kerala  & Anr.  v.  C.P.  Rao,  (2011)  6  SCC  450;  and Mukut  

Bihari & Anr. v. State of Rajasthan, (2012) 11 SCC 642).

8. The case is required to be examined in the light of the aforesaid  

settled legal propositions.  So far as the recovery is concerned, the  

respondent-accused took a plea that he only had the duty to serve the  

notice on the complainant with regard to the tax evasion done by him  

and was not the authority for making an assessment order. It was his  

official duty to serve upon the complainant a notice under Section 148  

of the Income Tax Act, 1961. The complainant came to his house and  

asked the respondent-accused to  give him a glass of water as he had  

to take the medicine. He went inside the kitchen and came back with a  

glass of water and thereafter shook hands with the complainant and  

that  is  why when the  hands of  the respondent  were washed,  they  

turned pink.  

9. The High Court also accepted the defence version made under  

Section 313 of Code of Criminal Procedure, 1973 and recorded the  

findings that the possibility of Phenolphthalein powder appearing on  

the hands of the respondent-accused when he shook hands with the  

complainant cannot be ruled out. The High Court further took note of  

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various  subsequent developments that certain complaints were filed  

against  him  by  the  CBI  having  dis-proportionate  assets.  The  

complainant  Naresh  Kumar  Kapoor  was  a  man  having  a  criminal  

background. He was involved in a murder case as well as in a case of  

sale of shares in bogus names.   The High Court further observed that  

in case two views are possible, the view favouring the accused has to  

be given preference, thus gave the benefit of doubt to the respondent  

accused and acquitted him.  

10. Undoubtedly, the reasoning given by the High Court does not  

deserve to be accepted for the reason that even if the complainant had  

a criminal  background, he can still  be forced by the officer  of  the  

Income Tax Department to pay  illegal gratification for not reopening  

the assessment of a particular year. The subsequent cases against the  

respondent-accused for having disproportionate assets cannot be co-

related  with  the  incident  of  trap  case.  The  incident  in  which  the  

respondent had been arrested for taking illegal gratification has to be  

examined on its own merit.  The courts below have not taken note of  

the statement made by Gurlebleen Singh (PW.2) who is an Executive  

Magistrate  and  must  be  treated  to  be  the  most  reliable  and  

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independent person and admittedly, he had been associated with the  

trap party.

The case of  the complainant was that on 1.6.1994 he went to  

the house of the respondent-accused and after bargaining, agreed to  

pay a sum of Rs.10,000/-  on the same day as part  payment of  the  

illegal  gratification of  Rs.25,000/-.  He immediately went alongwith  

Raj  Kumar Sharma (PW.3),  the shadow witness  to Harish Kumar  

(PW.12), DCP and the plan for trap was prepared and the trap was  

laid.  Gurlebleen  Singh  (PW.2),  the  Executive  Magistrate  has  

categorically  stated  that  he  had  been  directed  by  the  Deputy  

Commissioner  in  writing  on  31.5.1994  to  join  the  trap  party  on  

1.6.1994. Therefore, it is evident that in case the complainant himself  

had gone to Harish Kumar (PW.12) for having a trap on 1.6.1994, the  

question of receiving a direction from the Deputy Commissioner on  

31.5.1994 could not arise. Gurlebleen Singh (PW.2) is a witness only  

of  recovery  and not  of  accepting  the  bribe  money.  This  statement  

alone  made  it  evident  that  the  prosecution  has  not  disclosed  the  

genesis of the case correctly.  

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11. In  view of  the  above,  we  do  not  find  any cogent  reason  to  

interfere with the conclusion reached by the High Court. The appeal is  

accordingly dismissed.  

                             ……..…………..…………J.                                  (Dr. B.S. CHAUHAN)

                                 ………..……………..……J.                                  (S.A. BOBDE)

New Delhi, August 12, 2013

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