Prevention of Corruption Act, 1988 - Judgment Compilation 2023

1. When the Special Court chooses to take cognizance, the question of the approver being examined as a witness in the Court of the Magistrate as required by Section 306 (4)(a) does not arise: Supreme Court of India

A. Srinivasulu v. State Represented By Inspector of Police

A Division Bench of Justices V Ramasubramanian and Pankaj Mithal ruled that this Court has previously recognised in Arul Kumar two types of cases, namely

(i) those which come through the committal route; and

(ii) those where cognizance is taken directly by the Special Judge under Section 5(1) of the PC Act.

In the second category of cases, the Court held that Section 306 of the Code would get by-passed. The Supreme Court observed that therefore, when the Special Court chooses to take cognizance, the question of the approver being examined as a witness in the Court of the Magistrate as required by Section 306 (4)(a) does not arise.

Hence, it is not violative of the procedure prescribed by Section 306(4)(a) of the Code.

2. Filing of charge-sheet in a piece-meal manner defeats the right of the applicant to default bail and goes against the mandate of Article 21.

Avinash Jain v. CBI (DHC)

Justice Amit Sharma allowed the application for default bail under Section 167(2) and observed that it is not the case of the CBI that at the time of filing of the chargesheet, investigation with respect to the offences under the PC Act, 1988 was complete and therefore, the chargesheet was filed with respect to the other offences mentioned in the FIR.

Here, the CBI had not completed the investigation with respect to offences under Section 13(2) read with Section 13(1)(d) of the PC Act, 1988 for which the applicant was arrested and filed the chargesheet while keeping the investigation for offences under Section 13(2) read with Section 13(1)(d) of the PC Act, 1988 open. This resulted in defeating the right of the applicant to default bail and is against the mandate of Article 21 of the Constitution.

3. Further investigation as per Section 173 (8) CrPC is permitted, even after the Magistrate has accepted a final report (closure report).

State v. Hemendhra Reddy

The Divisional Bench comprising of Justice Surya Kant and Justice JB Pardiwala, decided that even after the final report is laid before the Magistrate and is accepted, it is permissible for the investigating agency to carry out further investigation in the case. Further, it is not necessary that the order accepting the final report should be reviewed, recalled or quashed before to carrying out further investigation.

The Court held that further investigation cannot be equated with prosecution and punishment and does not fall within the ambit of double jeopardy under Article 20(2). Moreover, there is no obligation to hear the accused while considering an application for further investigation under Section 173(8) of the CrPC. The Courts also observed that before directing such investigation as mentioned under Section 17 of the PC Act, 1988, the Superintendent of Police or an officer superior to him is required to apply his mind to the information and come to an opinion that the investigation on such allegations is necessary.

A word of caution was also extended in cases where contradicting views are taken by the learned judges. While  a learned Judge may differs with a view of a Co-ordinate Bench, however, same is required to make a reference to a larger Bench on papers being placed before the learned Chief Justice. Referring to Official Liquidator v. Dayanand further emphasised the adherence to basics of judicial discipline and the need for predictability and a certainty in law.

4. Right of the accused for default bail cannot be taken away by way of filing incomplete chargesheet and conducting the investigation in a piece-meal manner.

Ritu Chhabaria v. Union of India

Justice Krishna Murari and Justice CT Ravikumar, while placing reliance upon M. Ravindran v. Directorate of Revenue Intelligence and Satendar Kumar Antil v. CBI interpreted the right of default bail under Section 167(2) CrPC to be a fundamental right that flows from Article 21 of the Constitution of India. Therefore, it becomes essential to place certain checks and balances upon the Investigation Agency in order to prevent the harassment of accused persons at their hands.

In case such a chargesheet is filed by an investigating authority without first completing the investigation, it would not extinguish the right to default bail under Section 167(2) CrPC. Moreover,  trial court, in such cases, cannot continue to remand an arrested person beyond the maximum stipulated time without offering the arrested person default bail.

5. Right to appeal includes an opportunity for the person filing an appeal to question the conclusions drawn by the trial court. Thus, the mandates of Section 385 of the CrPC can only be followed when the record lower court is available with the Court of Appeal.

Jitendra Kumar Rode v. Union of India

The Divisional Bench of Justice Krishna Murari and Sanjay Karol, J., considered whether the High Court upholding the conviction despite non-availability of trial court records  infringes the right of life and liberty of the accused enshrined under Article 21 of the Constitution of India. The court held that if a right of production of documents at the trial stage exists, it is a natural corollary that the High Court, sitting in appeal, must benefit from those documents. In this case, the impugned judgment of the High Court records the statement of the CBI that the records have “got lost”. The “reconstructed” record /documents undoubtedly need to include the essential documents necessary to properly appreciate the appeal on its merits.

Relying on Bani Singh v. State of U.P., the court decided that in order to decide the appeal on merits including the question of sentencing the accused, it was erroneous for the lower court to have decided the cases without the complete records.

The court also emphasised the digitization of records and observed that had there been properly preserved records of the Trial Court, the issue in the present appeal as to whether the High Court could uphold a conviction having not perused the complete Trial Court record, would not have arisen. Further directions were also given to the Registrar General of the High Courts to ensure appropriate steps towards such digitization to be duly undertaken with promptitude at all District Courts.

6. Unless both demand and acceptance are established, the offence of obtaining pecuniary advantage by corrupt means covered by Section 13(1)(d)(i) and (ii) (Old PC Act) cannot be proved.

Soundarajan v. State

The Divisional Bench of Justice Abhay S Oka and Rajesh Bindal, J., observed that shadow witness did not say that the appellant made a specific demand of gratification in his presence to complainant. To attract Section 7 of the PC Act (as existed before 26th July 2018), the demand for gratification has to be proved by the prosecution beyond a reasonable doubt. Further, if the factum of demand of gratification and acceptance thereof is proved, then the presumption under Section 20 can be invoked, and the Court can presume that the demand must be as a motive or reward for doing any official act.

The Bench also noted that Trial Courts ought to be very meticulous and even the public prosecutor has a duty to be vigilant at the stage of framing of charges. In the present case, even though proper charge for demand and acceptance allegedly made by the appellant on 6th and 13th August 2004 and acceptance thereof on 13th August 2004 were not framed, however, the accused was not prejudiced insofar as his right to defend is concerned. Therefore, such an omission did not prove to be fatal.

7. The period of police custody does not lapse if due to certain exigencies the police was unable to exercise the right of interrogation for the full period of police custody remand.

CBI v. Vikas Mishra

In the present case, the Special Judge allowed police custody of the respondent accused for seven days. However,  respondent-accused got himself admitted in the hospital during the period of police custody, and therefore the CBI could not interrogate the accused in the police custody though having a valid order in its favour.

The division bench of Justice MR Shah and CT Ravikumar, observed that no accused can be permitted to play with the investigation and/or the court’s process. No accused can be permitted to frustrate the judicial process by his conduct. It cannot be disputed that the right of custodial interrogation/investigation is also a very important right in favour of the investigating agency to unearth the truth, which the accused has purposely and successfully tried to frustrate. Therefore, by not permitting the CBI to have the police custody interrogation for the remainder period of seven days, it will be giving a premium to an accused who has been successful in frustrating the judicial process.

The court also noted that the view taken by this Court in CBI v. Anupam J. Kulkarni, that there cannot be any police custody beyond 15 days from the date of arrest requires reconsideration.

8. Allegation of demand of gratification and acceptance made by public servant must be proved to sustain conviction under PC Act, 1988. Mere recovery is not sufficient to hold public servant guilty of the offence.

Jagtar Singh v. State of Punjab

A divisional bench comprising of Justice Abhay S Oka and Justice Rajesh Bindal ruled in the light of law laid down by Constitutional Bench of this Court in Neeraj Dutta v. State (Govt. of N.C.T of Delhi), the demand and recovery both must be proved to sustain conviction under the Act. The trial court had specifically held that there is no evidence produced on record to prove the demand of illegal gratification.

The High Court has passed its impugned judgment on the assumption that there was demand of illegal gratification as money was recovered from the appellant. This is not a case if there was circumstantial evidence to prove the demand. After perusal of evidence produced on record by prosecution is examined in this light, the conviction and sentence of the appellant cannot be legally sustained.

9. Supreme court questions the practice followed by courts to remand the accused to custody as soon as they appear in response to the summoning order.

Mahdoom Bava v. CBI

A Divisional bench comprising of Justice V Ramasubramanian and Justice Pankaj Mithal held in some parts of the country, there seems to be a practice followed by Courts to remand the accused to custody, the moment they appear in response to the summoning order.

The Supreme Court thus decided that appellants remanded to custody are entitled to be released on bail, subject to such terms and conditions as may be imposed by the Special Court, including the condition for the surrender of the passport, in the event of the Court choosing to remand them to custody, when they appear in response to the summoning order.

The Court also observed that the correctness of such a practice has to be tested in an appropriate case.

10. Allegation of demand of gratification and acceptance made by public servant must be established beyond reasonable doubt, if essential ingredient under Section 7 of PC Act, 1988 are not proven then offence under section 13 (1)(d).

Neeraj Dutta v. State (NCT of Delhi)

A divisional bench comprising of Justice Abhay S Oka and Justice Rajesh Bindal in the light of law laid down by another bench in the case of N Vijayakumar v. State of Tamil Nadu 2021, dealt with the issue of presumption under Section 20 and the degree of proof required to establish the offences punishable under Section 7 and clauses (i) and (ii) Section 13(1)(d) read with Section 13(2) of PC Act, 1988.

The allegation of demand of gratification and acceptance made by a public servant has to be established beyond a reasonable doubt. The decision of the Constitution Bench in Neeraj Dutta v. State (NCT of Delhi), does not dilute this elementary requirement of proof beyond a reasonable doubt. There, the Constitution Bench was dealing with the issue of the modes by which the demand can be proved. The Constitution Bench has laid down that the proof need not be only by direct oral or documentary evidence, but it can be by way of other evidence including circumstantial evidence. When reliance is placed on circumstantial evidence to prove the demand for gratification, the prosecution must establish each and every circumstance from which the prosecution wants the Court to draw a conclusion of guilt. The facts so established must be consistent with only one hypothesis that there was a demand made for gratification by the accused.

In the present case, there were no circumstances brought on record to prove the demand for gratification. Therefore, the ingredients of the offence under Section 7 of the PC Act were not established and consequently, the offence under Section 13(1)(d) will not be attracted.

11. Supreme court suggests that High courts must maintain distance from quashing FIR at the stage of investigation, even on ground of mala fide.

State of Chhattisgarh v. Aman Kumar Singh

A divisional bench comprising of Justice S Ravindra Bhat and Justice Dipankar Datta ruled that it is the settled principle of law that when an investigation is yet to start, there should be no scrutiny to what extent the allegations in a first information report are probable, reliable or genuine.  A first information report can be registered merely on suspicion.

Viewed through the prism of gravity of allegations, a first information report based on “probability” of a crime having been committed would obviously be of a higher degree as compared to a first information report lodged on a “mere suspicion” that a crime has been committed. The High Court was not justified in its interference with the investigative process and committed an error of law in quashing the FIR on the grounds of mala fide intention.

The Court observed that whether the first information report is the outcome of mala fide would be of secondary importance and the same would be lose significance if sufficient materials are gathered for sending the accused up for a trial. Hence, the plea of mala fide may not per se form the basis for quashing the first information report/complaint.

12. Factum of demand should be established through direct or circumstantial evidence in order to presume the commission of offences under Section 13(1)(d)(i)(ii) under Section 20, PC Act, 1988.

Shankarlal Sharma v. State of Madhya Pradesh

A divisional bench comprising of Justice Abhay S Oka and Justice Rajesh Bindal, while deciding the present appeal by relying on a Constitution Bench in Neeraj Dutta v. State (NCT of Delhi), that when the complainant does not support the prosecution, the demand made by the accused can be otherwise proved by the prosecution even on the basis of circumstantial evidence. While saying so, the Constitution Bench has reiterated that the offer by the bribe giver and the demand by the public servant have to be proved by the prosecution as a fact in issue. The Constitution Bench reiterated that mere acceptance or receipt of illegal gratification without anything more would not make it an offence under Section 7 or Section 13(d) of the PC Act.

The Constitution Bench also held that only when a proper demand is made by a public servant and is accepted by the bribe giver and in turn, the amount tendered by the bribe giver is received by the public servant, it would be an offence under Section 13(1)(d) and in particular Clauses (i) and (ii) thereof. The Constitution Bench reiterated the well settled law that presumption under Section 20 does not apply to Clauses (i) and (ii) of Section 13(1)(d) of the PC Act.

Therefore, divisional bench is of the considered opinion that in the present case, the factum of demand was not established by the prosecution. Hence, the judgment of the High Court could not be sustained.

13. Special courts/magistrate shall not order an investigation under Section 156(3) CrPC against public servant in absence of prior sanction under Section 19 of PC Act.

C.V Balan vs State of Kerala

A single bench of Justice Dr. Kauser Edappagath, sanction under Section 19 of the PC Act, 1988 is a pre-requisite for presenting a private complaint against a public servant alleging the commission of an offence specified in sections 7, 11, 13 and 15 of the PC Act, 1988.

The single bench is of the considering view that the court below could not have forwarded the complaints under section 156(3) of CrPC for investigation without obtaining any sanction from complainant under Section 19(1) of the PC Act, 1988. Hence, the impugned order cannot be sustained, and accordingly, it is set aside. The court below shall proceed with the complaints in accordance with law only after the production of prosecution sanction order under section 19 of the PC Act.

The Court reiterated law as laid down in Anil Kumar v. M.K. Aiyappa and L.Narayana Swamy v. State of Karnataka.

14. Default bail granted under Section 167(2) CrPC to an accused may be cancelled on merits after filing of chargesheet and not by mere filling of chargesheet.

State v. T. Gangi Reddy

A Divisional bench comprising of Justice MR Shah and Justice CT Ravikumar  held that considering Section 437(5) and Section 439(2) CrPC, the bail in favour of a person released on default bail under Section 167(2) CrPC can be cancelled only when special reasons/grounds are being made out from the chargesheet and the chargesheet reveals the commission of a non-bailable crime.

If a person is released on default bail under Section 167(2) CrPC., such a bail can be cancelled on merits or on other general grounds like tampering with the evidence/witnesses, not cooperating with the investigating agency and/or not cooperating with the concerned Trial Court etc. The courts have the power to cancel the bail and to examine the merits of the case in a case where the accused is released on default bail and released not on merits earlier. Such an interpretation would be in furtherance to the administration of justice.

15. Appellant is entitled to benefit of doubt, if prosecution is unable to prove demand and acceptance of illegal gratification.  

Aditya Kumar v. State of Rajasthan

A divisional bench comprising of Justice BR Gavai and Justice Vikram Nath, observed that after perusing the evidence on record that the independent witness (PW-2) clearly admits that neither the appellant had made any demand nor was any amount given in his presence to the appellant herein. The evidence of Dy .S.P. (PW-6) would also cast a doubt about the credential of the complainant.  Apart from that, his evidence would reveal that the appellant herein was not a competent person to do the work for which the amount was alleged to have been given.

In view of the matter, Supreme Court held that appellant was entitled to benefit of doubt.

Vaibhavi Sharma is an Associate Partner and Bhumika Yadav is a Senior Associate at Prosoll Law.