STATE OF PUNJABversusMADAN MOHAN LAL VERMA

                       [2013] 7 S.C.R. 1130


A                      STATE OF PUNJAB
                                v.
                  MADAN MOHAN LAL VERMA
               (Criminal Appeal No. 2052 of 2010)
                        AUGUST 12, 2013
B
          (DR. B.S. CHAUHAN AND S.A. BOBDE, JJ.]

        PREVENTION OF CORRUPTION ACT, 1988:
        ss. 7 and 13(1)(d) read with s.13(2) - Conviction by trial
C court, set aside by High Court - Held: Demand of illegal
  gratification is sine qua non for constituting an offence under
  the Act - Meie recovery of tainted money is not sufficient to
  convict the accused, unless there is evidence to prove
  payment of bribe or that the money was taken voluntarily as
D a bribe - High Court accepted the defence version made u/s
  313Cr.PC that possibility of Phenolphthalein powder
  appearing on the hands of-accused when he shook hands with
  the complainant, cannot be .ruled out -Executive Magistrate,
  who had been associated with the trap party, deposed only
E about recovery and not about accepting the bribe money -
  This statement alone made it evident that the prosecution has
  not disclosed the genesis of the case correctly - There is,
  therefore, no cogent reason to interfere with the conclusion
  reached by High Court - Appeal against acquittal.
F       s. 20 - Statutory presumption - Rebuttal of - Discussed.
        EVIDENCE:
        Evidence of complainant in a bribe case - Nature of -
    Discussed.
G
         The respondent was alleged to have demanded
    illegal gratification from the complainant for not to reopen
    his income tax assessment. The complainant approached
    the DSP (Vigilance). A trap was laid. The complainant and
H                               1130
STATE OF PUNJAB v. MADAN MOHAN LAL VERMA 1131


the shadow witness reached the house of the respondent       A
with chemically treated currency notes. On receiving the
signal, the raiding party, which included a DSP and an
Executive Magistrate, recovered the chemically treated
currency notes that were kept on a table covered in a
newspaper. The chemical examination of the                   B
respondent's hands was positive. The trial court
convicted the respondent of the charges and awarded
him sentence of one year each under the two counts.
However, the High Court set aside the conviction and
sentence.                                                    c
    Dismissing the appeal, the Court
     HELD: 1.1 Demand of illegal gratification is sine qua
non for constituting an offence under the Prevention of
Corruption Act, 1988. Mere recovery of tainted money is 0
not sufficient to convict the accused, unless there is
evidence to prove payment of bribe or to show that the
money was taken voluntarily as a bribe. While invoking
the provision of statutory presumption u/s 20 of the Act,
the court is required to consider the explanation offered E
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 · F
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 G
accused. [para 7] [1136-D-E, G-H; 1137-A-B]
    Ram Prakash Arora v. The State of Punjab AIR 1973 SC
498; T. Subramanian v. The State of T.N., 2006 (1) SCR 180
= AIR 2006 SC 836; State of Kera/a & Anr. v. C.P. Rao 2011
                                                             H
   1132   SUPREME COURT REPORTS              [2013] 7 S.C.R.


A (6) SCR 864 = (2011) 6 SCC 450; and Mukut Bihari & Anr.
  v. State of Rajasthan, (2012) 11 SCC 642 • referred to.
      1.2 So far as the recovery in the instant case is
  concerned, the High Court accepted the defence version
  made u/s 313 of Code of Criminal Procedure, 1973 and
B recorded the finding 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. [para 8-9] [1137 -C, F]
       1.4 The courts below have not taken note of the
C statement made by PW.2 who is an Executive Magistrate
  and had been associated with the trap party. He must be
  treated to be the most reliable and independent person.
  PW.2 is a witness only of recovery and not of accepting
  the bribe money. This statement alone made it evident
D that the prosecution has not disclosed the genesis of the
  case correctly. The subsequent cases against the
  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 ·
E gratification has to be examined on its own merit. [para
  10] [1138-B-D, F·G]
       2.The appellate court, in exceptional circumstances
  and for compelling reasons, should not hesitate to
  reverse a judgment of acquittal. However, while doing so,
F 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. In the facts and circumstances of the case,
  there is no cogent reason to interfere with the conclusion
G reached by the High Court. [para 6 and 11] [1135-H; 1136-
  A-C; 1138-G-H]
      Abrar v. State of U.P., 2010 (13) SCR 1217 =AIR 2011
  SC 354; Rukia Begum v. State of Kamataka, AIR 2011 SC
  1585; and State of Madhya Pradesh v. Dal Singh & Ors., AIR
H 2013 SC 2059 - relied on.
STATE OF PUNJAB v. MADAN MOHAN LAL VERMA 1133


                     Case Law Reference:                         A
     2010 (13) SCR 1217           relied on          para 6
     AIR 2013 SC 2059             relied on          para 6
     AIR 1973 SC 498              referred to        Para 7
     2006 (1) SCR 180             referred to        Para 7      8
     2011 (6) SCR 864             referred to        Para 7
     (2012) 11 SCC 642            referred to        Para 7
     CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 2052 of 2010.
     From the Judgment and Order dated 03.03.2009 of the         C
High Court of Punjab & Haryana at Chandigarh in Criminal
Appeal No. 414-SB of 1996.
     Ashok Kumar Panda, Lingaraj Sarangi, Rajiv Nanda, Syed
Tanweer Ahmad, B.V. Bairam Das, Arvind Kumar Sharma for
the Appellant.                                                   D
     Madan Mohan Lal Verma, Respondent-In-Person.
     The Judgment of the Court was delivered by
     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 pas~ed by the        E
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   F
the 'Act 1988') and had been awarded the sentence of one year
on each count and a fine of Rs.2,500/- was imposed, in default
of payment of fine, to further undergo RI for one month.
     2. Facts and circumstances giving rise to this appeal are
~:                                                               G
     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,          H
    1134    SUPREME COURT REPORTS                  [2013] 7 S.C.R.


A 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
B 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
c 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 the same day,
  and a further sum of Rs.15,000/- on the next day. The
0 complainant made a false promise of paying a sum of Rs.
  1o;poo1- 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
E 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
F 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
G 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.
        D. After investigation, a charge sheet was filed against the
  respondent-accused. The prosecution examined 12 witnesses
H in support of its case and the defence also examined 9
STATE OF PUNJAB v. MADAN MOHAN LAL VERMA 1135
           [DR. B.S. CHAUHAN, J.]

witnesses. On conclusion of the trial, the respondent was A
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 d~ted 3.3.2009.
       Hence, this appeal.                                           B
       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 C
 (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 D
 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 E
 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 F
  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 appUed. G
 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 fs a settled legal proposition that in exceptional H

                                                                         ,
    1136     SUPREME COURT REPORTS                    [2013] 7 S.C.R.


A   circumstances, the appellate court for compelling reasons
    should not 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 e,vidence on record;
B   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 arid
    is based on an erroneous understanding of the law and of the
    facts of the case. While doing so, the appellate court must bear
c   in mind the presumption of innocence in favour of the accused,
    aild 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 Kamataka, AIR 2011
    SC 1585; and State of Madhya Pradesh v. Dal Singh & Ors.,
D   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
E   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 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
F   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
G   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
H   in question was found in his possession, the foundational facts
STATE OF PUNJAB v. MADAN MOHAN LAL VERMA 1137
           [DR. B.S. CHAUHAN, J.]
                                        I


must be established by the prosecution. The complainant is an        A
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.                                                      B
      (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 of Kera/a & Anr. v. C.P. Rao, (2011) 6 SCC
450; and MukutBihari & Anr. v. State of Rajasthan, (2012)
 11 sec 642). ·
                                                                     c
      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       D
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      E
 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   F
 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 various subsequent
developments that certain complaints were filed against him by
the CBI having dis-proportionate assets. The complainant             G
 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
 obsel\led that in case two views are possible, the view favouring
 the accused has to be given preference, thus gave the benefit       H
    1138    SUPREME COURT REPORTS                 [2013] 7 S.C.R.


A 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
B 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
C 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 independent person and admittedly, he had been
  associated with the trap party.
D       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
E 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
F 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
G not disclosed the genesis of the case correctly.
        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.
H R.P.                                         Appeal dismissed.