A presumption can be drawn only from facts — and not from other presumptions

Presumption is an inference of a certain
fact drawn from other proved facts. While
inferring the existence of a fact from another,
the court is only applying a process of
intelligent reasoning which the mind of a
prudent
man
would
do
under
similar
circumstances. Presumption is not the final
conclusion to be drawn from other facts. But it
could as well be final if it remains undisturbed
later. Presumption in law of evidence is a rule
indicating the stage of shifting the burden of
proof. From a certain fact or facts the court
can draw an inference and that would remain
until such inference is either disproved or
dispelled.
18. For the purpose of reaching one conclusion
the court can rely on a factual presumption.
Unless the presumption is disproved or dispelled
or rebutted, the court can treat the presumption
as tantamounting to proof. However, as a caution
of prudence we have to observe that it may be
unsafe to use that presumption to draw yet
another discretionary presumption unless there
is a statutory compulsion. This Court has
indicated so in Suresh Budharmal Kalani v. State
of Maharashtra.
“A presumption can be drawn
only
from
facts
—
and
not
from
other
presumptions — by a process of probable and
logical reasoning.”


REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION
CRIMINAL APPEAL NO.920 of 2011
SATVIR
SINGH

VS.
STATE OF DELHI THROUGH CBI.
Citation; 2014 (3) crimes 420 SC,III(2014)CCR644, 2014(9)SCALE528
V.GOPALA GOWDA, J.

This appeal is filed by the appellant against the
judgment dated 07.01.2011 and order on sentence dated
08.03.2011 passed in Criminal Appeal No.337 of 1999 by
the
High
reversed
Court
the
of
order
Delhi,
of
whereby
acquittal
the
dated
High
Court
11.03.1999
Page 1
Crl. A. No. 920 of 2011
-2-
recorded by the Trial Court in C.C No. 19 of 1993 and
convicted
the
appellant
for
the
offence
punishable
under Section 7 of the Prevention of Corruption Act,
1988
(hereinafter
rigorous
referred
imprisonment
for
to
one
as
year
‘the
Act’)
and
a
with
fine
of
Rs.50,000/-, in default of payment of fine, to further
undergo three months simple imprisonment. The appellant
has prayed for allowing the appeal by setting aside the
impugned judgment of the High Court and to acquit him
from the charge urging various facts and grounds in
support of the questions of law framed in this appeal.
2.
For the purpose of considering the rival legal
contentions
urged
by
the
learned
counsel
for
the
parties and with a view to find out whether this Court
is
and
required to
order
Court,
the
of
interfere with
conviction
necessary
and
facts
the impugned
sentence
are
of
judgment
the
briefly
High
stated
hereunder:
The complainant, Ramesh Suri (PW-2), was running a
business of import and export of buttons, zips, etc. in
the name and style of M/s Erica Enterprises. It is
Page 2
Crl. A. No. 920 of 2011
alleged
-3-
that the
appellant along
with his
colleague
P.S.Saini (both Inspector Customs (Preventive)) visited
the
office
cum
godown
of
the
complainant
(PW2)
on
4.07.1989 and that P.S.Saini demanded a bribe of Rs.2
lakhs from the complainant, one lakh each for himself
and the accused as the articles kept in the godown were
notified goods and since his firm was not a notified
dealer, the complainant has violated the provisions of
Customs Act, 1962.
3.
Further,
on
07.07.1989,
it
is
alleged
by
the
prosecution that the appellant telephonically contacted
the
made
complainant (PW-2)
by
P.S.Saini.
and reiterated
During
the
time
the demand
of
as
telephonic
conversation, the brother-in-law of the complainant Ram
Malhotra
was sitting
with him.
The complainant
said
only an amount Rs.60,000/- could be arranged by him and
the
same
was
delivered
at
the
residence
appellant on 08.07.1989 at 8.00 a.m. as the
of
the
rest of
the amount would be arranged within 3-4 days and will
be paid to the appellant.
Page 3
Crl. A. No. 920 of 2011
4.
-4-
It is alleged that on the written complaint lodged
in the CBI office and on the directions of the Deputy
Superintendent of Police a raid was conducted in the
house of the appellant with the help of the complainant
and a shadow witness (PW-3), the appellant was arrested
on
8.7.1989.
The
charge
sheet
was
filed
by
the
prosecution under Section 173 Cr.P.C. before the court
of Special Judge on the basis of which it has framed
the
charges
offences
against
the
punishable under
appellant
Sections 7
for
trial for
and 13(2) read
with Section 13(1)(d) of the Act.
5.
The Trial Court after evaluating the evidence on
record has come to the conclusion and held that the
prosecution
had
failed
to
prove
the
guilt
of
the
accused under Sections 7 and 13(2) read with Section
13(1) (d) of the Act and recorded the acquittal of the
appellant from the charges vide its judgment and order
dated 11.03.1999.
6.
The
respondent-prosecution,
aggrieved
by
the
judgment and order of the Trial Court has filed an
appeal before the High Court of Delhi urging various
Page 4
Crl. A. No. 920 of 2011
grounds.
-5-
After
hearing
the
learned
counsel
for
the
parties, the High Court vide its judgment and order
dated
07.01.2011
reversed
the
order
of
acquittal
recorded by the Trial Court and convicted the appellant
for the offence punishable under Section 7 of the Act.
The
correctness
appeal
by
the
of
the
appellant
same
by
is
challenged
raising
in
certain
this
legal
questions and urging grounds in support of the same.
7. It is contended by Mr. Altaf Ahmed, the learned
senior
counsel appearing
on behalf
of the
appellant
that P.S. Saini on all the occasions demanded the bribe
money from the complainant but he was neither arrayed
as accused nor examined as witness by the prosecution
in the case. Further, he submits that recovery memo
Exh. PW-2/D is not proved because neither its author
Deputy
Superintendent
of
Police,
Darshan
Singh
was
available nor the signatures of the other witnesses on
the said memo have been proved. Therefore, recovery of
money from the appellant alleged to have been paid to
him
by
the
complainant-PW-2
is
not
proved
by
the
prosecution. It is urged by him that the further lacuna
Page 5
Crl. A. No. 920 of 2011
in
the
-6-
prosecution
case
is
that
Ram
Malhotra,
the
Brother-in-law of the complainant, who was stated to be
present at the time of the telephonic demand made by
the accused with the complainant was examined by the
prosecution.
demand
and
appellant
The prosecution could neither prove the
acceptance
nor
were
of
they
the
able
gratification
to
prove
by
the
conscious
possession of the black rexine bag containing the GC
notes with him.
Therefore, the alleged recovery of
money cannot be stated to be “acceptance” of illegal
gratification
by
the
appellant
as
alleged
by
the
prosecution.
8.
It has been further submitted by the learned senior
counsel for the appellant that the appellate court in
exercise of its appellate jurisdiction has erroneously
re-appreciated the evidence produced by the prosecution
and has set aside the valid finding of fact recorded by
the learned trial judge on the charges framed against
the appellant. Therefore, the finding recorded on this
aspect of the matter in the impugned judgment by the
appellate court is not only erroneous on facts but in
Page 6
Crl. A. No. 920 of 2011
-7-
law, therefore, the same is liable to be set aside.
Further,
it
is
contended
by
him
that
the
learned
appellate judge has not noticed a very important lacuna
in the prosecution case that as per the evidence of PW-
2 and PW-3 Rameshwar Nath, the bribe money which was
sought to be given to the accused on 08.07.1989 in a
black rexine bag and not in the brown bag as shown to
the prosecution witnesses by the learned counsel for
the prosecution.
9.
He has further urged that the Appellate Court can
exercise its jurisdiction in exceptional circumstances
where
there
judgment
support
are
under
of the
compelling
appeal
is
circumstances
found
aforesaid legal
to
be
and
the
perverse.
submission he
In
placed
reliance upon the decision of this Court in the case of
Babu
v.
State
of
Kerala,1
wherein
it
has
been
categorically held that:
“In
exceptional
cases
where
there
are
compelling circumstances and the judgment
under the appeal is found to be perverse,
the appellate court can interfere with order
of acquittal. The appellate court should
bear in mind the presumption of innocence of
1
(2010) 9 SCC 189

the accused and further that the trial
Court’s acquittal bolsters the presumption
of innocence. Interference in a routine
manner where the other view is possible
should be avoided, unless there are good
reasons for interference” (Para 19).
The presumption of innocence of the appellant
is
further strengthened by the order of acquittal recorded
by the trial judge on proper appreciation of evidence
on record.
He had the occasion to examine the demeanor
of the prosecution witnesses. The Trial Court came to
the right conclusion on facts and evidence on record
and it has recorded a finding of fact holding that the
accused is innocent of the charges leveled against him
and consequently acquitted him from the said charges.
It is further submitted by the learned senior counsel
that the Appellate Court could only interfere in rare
cases where it is found that the order of acquittal is
erroneous or error in law. Therefore, he submits that
the not have
the Trial
High
judgment
senior
Court
and
should
order
counsel for
reliance
on
the
of
the appellant
following
interfered
Court.
with
The
learned
has further
judgments
of
the
this
placed
Court,

namely, 1) State of Kerala & Anr. v. C.P. Rao2, 2)
Murugesan & Ors. v. State through Inspector of Police3
in support of his submission that the High Court has
exceeded
its
parameters
laid
down
by
this
Court
in
reversing the judgment and order of acquittal of the
accused.
The
relevant
paragraphs
from
the
above
judgments are extracted in the answering portion of the
contentious points.
10.
The learned
‘presumption’
of
senior counsel
offence
further submits
committed
by
the
that
appellant
under Section 20 of the Act can be invoked against him
by
the
prosecution,
successfully
proves the
only
if
the
prosecution
foundational facts.
In
the
case in hand, since the demand, acceptance of bribe
money and recovery of the same from him has not been
proved by the prosecution, the statutory presumption
under Section 20 of the Act against the guilt of the
accused does not arise and therefore rebuttal of such
2
3
(2011) 6 SCC 450
(2012) 10 SCC 383


presumption by the appellant also did not arise in this
case.
11. The other legal contention urged by the learned
senior counsel is that mere recovery of the alleged
tainted
money
without
there
being
any
demand
and
acceptance by the appellant from the complainant does
not prove the guilt of the appellant. In support of his
aforesaid legal submission, he has placed reliance upon
the
following
Panduranga
Vs.
decisions of
State Karnataka4
of
this
Court:
(1)
(2)Subash
K.S.
Parbat
Sonvane Vs. State of Gujarat5 and (3)Mukut Bihari &
Anr. Vs. State of Rajasthan6.
In Mukut Bihari & Anr., this Court has held
thus:
“11. The law on the issue is well settled that
demand of illegal gratification is sine qua
non for constituting an offence under the 1988
Act. Mere recovery of tainted money is not
sufficient to convict the accused, when the
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 bribe. Mere receipt of
amount by the accused is not sufficient to
fasten the guilt, in the absence of any

(2013) 3 SCC 721
(2002) 5 SCC 86

(2012) 11 SCC 642

evidence with regard to demand and acceptance
of the amount as illegal gratification, but
the burden rests on the accused to displace
the statutory presumption raised under Section
20 of the 1988 Act, 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 1988 Act. 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 as to 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 and in a proper case the
court may look for independent corroboration
before convicting the accused person.”
12.
The learned senior counsel for the appellant has
further contended that mere recovery by itself cannot
prove
the
charge
against
the
accused
and
placed
reliance upon the decision of this Court in C.M. Girish
Babu
7
Vs.
CBI,
Cochin,
High
Court
of
Kerala7.
(2009) 3 SCC 779

The

relevant

paragraph
is
extracted
in
the
reasoning
portion.
13. In view of the aforesaid legal contentions urged by
the learned senior counsel he has prayed this Court to
set aside the impugned judgment and order of the High
Court and restore the trial court judgment and order by
allowing this appeal.
14. On the other hand, the learned counsel for the
respondent Dr. Ashok Dhamija has strongly relied upon
the version of PW-3, who is an independent witness and
sought to justify the impugned judgment and order as
the High Court has rightly reversed the judgment and
order of acquittal passed by the Trial Court. It has
been urged by the learned counsel for the respondent
that even though the complainant-PW2 has turned hostile
in the case he has admitted his version in the cross-
examination and corroborated the evidence of PW-3.
15. Further, the learned counsel for the respondent has
contended that the complainant, PW-2 called PW-3 inside

the residence of the accused introducing him as his
uncle. When PW-3 went inside, the appellant enquired
with
the
complainant
if
he
had
brought
the
money.
PW-2, thereafter asked if there was anything to worry
about and whether his work would be done.
over
the
handbag
containing
the
PW-2 handed
notes
towards
gratification to the accused who touched the notes with
his right hand and placed the hand bag containing the
money on the cot made up of steel. Thus, the demand and
acceptance of gratification by the appellant from the
complainant is duly proved by the witness-PW3.
16. Further, he has contended that the testimony of PW-
3 is corroborated by the testimony of PW-4 R.S.Manku,
the Deputy Superintendent of Police who had conducted
the
trap
and
also
PW-8
A.S.Chhabra,
the
Senior
Scientific Officer who gave the report that the right–
hand wash solution of the appellant gave positive test
for Phenolphthelin and sodium. Therefore, the fact that
the money was demanded and given to the appellant for
illegal
gratification,
which
fact
is
further
corroborated by another fact that money was withdrawn

from the bank account of PW-2 who has clearly deposed
about it before the court in his evidence.
17.
The
High
Court
has
concluded
on
the
material
evidence on record and held that the reasons of the
Trial
Court
erroneous;
on
the
stating
charge
that,
against
at
the
the
time
appellant
of
is
demand,
normally nobody else, except the complainant-PW2 would
be present. Therefore, rejecting his testimony by the
Trial Court for want of corroboration of his evidence
by recording the findings of fact by him stating that
it was unsafe to rely on the sole testimony of the
complainant-PW-2,
to
convict
the
appellant
would
be
contrary to the settled principles of appreciation of
evidence on record.
18. Further, the findings of the trial court that there
was
no
motive
for
the
appellant
to
demand
the
gratification from the complainant as Sudan, the Custom
(Supdt.) had satisfied himself that the complainant had
valid documents in support of his claim and that he was
not
a
notified
dealer
is
also
perverse
as
the
complainant, PW-2 in his testimony has clearly stated

that the money was given to the appellant so that no
harassment would be caused to him in his business in
future.
19. It has been further held by the High Court that the
Trial Court has also failed to apply the settled legal
principles of law laid down by this Court. The Trial
Court has erred in not accepting the testimony of a
hostile witness-PW2, his evidence cannot be treated as
effaced or washed off the record altogether; part of
his evidence which is otherwise acceptable could have
been acted upon at the time of recording his findings
on the charges.
20.
Further,
it
is
urged
by
him
that
it
has
been
further held by the High Court that since the illegal
gratification is large, the same could not have been
accepted by the appellant as cash-in-hand and the same
was handed over to him by keeping in bags, suitcases,
etc... which can never be recovered from the person of an
accused.
21. The High Court further held that once demand and
acceptance
by
the
accused
has
been
proved
then
the

statutory

presumption
under
Section
20
of
the
Act
arises against him and the onus of proof shifts on him
to
rebut
the
presumption
by
adducing
acceptable
evidence to prove that he is not guilty of offence. In
support of the aforesaid contention, the decision of
this Court in the case of
M. Narsinga Rao v. State of
Andhra Pradesh,8 was relied upon wherein it was held
thus:
“13. Before proceeding further, we may point out
that the expressions “may presume” and “shall
presume” are defined in Section 4 of the
Evidence Act. The presumptions falling under the
former category are compendiously known as
“factual
presumptions”
or
“discretionary
presumptions” and those falling under the latter
as
“legal
presumptions”
or
“compulsory
presumptions”. When the expression “shall be
presumed” is employed in Section 20(1) of the
Act it must have the same import of compulsion.
14. When the sub-section deals with legal
presumption it is to be understood as in
terrorem i.e. in tone of a command that it has
to be presumed that the accused accepted the
gratification as a motive or reward for doing or
forbearing to do any official act etc., if the
condition envisaged in the former part of the
section is satisfied. The only condition for
drawing such a legal presumption under Section
20 is that during trial it should be proved that
the accused has accepted or agreed to accept any
gratification. The section does not say that the
said condition should be satisfied through
direct evidence. Its only requirement is that it

2001 (1) SCC 691

must be proved that the accused has accepted or
agreed to accept gratification. Direct evidence
is one of the modes through which a fact can be
proved. But that is not the only mode envisaged
in the Evidence Act.
15. The word “proof” need be understood in the
sense in which it is defined in the Evidence Act
because proof depends upon the admissibility of
evidence. A fact is said to be proved when,
after considering the matters before it, the
court either believes it to exist, or considers
its existence so probable that a prudent man
ought, under the circumstances of the particular
case, to act upon the supposition that it
exists. This is the definition given for the
word “proved” in the Evidence Act. What is
required is production of such materials on
which the court can reasonably act to reach the
supposition that a fact exists. Proof of the
fact depends upon the degree of probability of
its having existed. The standard required for
reaching the supposition is that of a prudent
man acting in any important matter concerning
him. Fletcher Moulton L.J. in Hawkins v. Powells
Tillery Steam Coal Co. Ltd. observed like this:
“Proof
does
not
mean
proof
to
rigid
mathematical demonstration, because that is
impossible; it must mean such evidence as would
induce a reasonable man to come to a particular
conclusion.”
16. The said observation has stood the test of
time and can now be followed as the standard of
proof. In reaching the conclusion the court can
use the process of inferences to be drawn from
facts produced or proved. Such inferences are
akin to presumptions in law. Law gives absolute
discretion to the court to presume the existence
of any fact which it thinks likely to have
happened. In that process the court may have
regard to common course of natural events, human
conduct, public or private business vis-à-vis
the facts of the particular case. The discretion

is clearly envisaged
Evidence Act.
in
Section
114
of
the
17. Presumption is an inference of a certain
fact drawn from other proved facts. While
inferring the existence of a fact from another,
the court is only applying a process of
intelligent reasoning which the mind of a
prudent
man
would
do
under
similar
circumstances. Presumption is not the final
conclusion to be drawn from other facts. But it
could as well be final if it remains undisturbed
later. Presumption in law of evidence is a rule
indicating the stage of shifting the burden of
proof. From a certain fact or facts the court
can draw an inference and that would remain
until such inference is either disproved or
dispelled.
18. For the purpose of reaching one conclusion
the court can rely on a factual presumption.
Unless the presumption is disproved or dispelled
or rebutted, the court can treat the presumption
as tantamounting to proof. However, as a caution
of prudence we have to observe that it may be
unsafe to use that presumption to draw yet
another discretionary presumption unless there
is a statutory compulsion. This Court has
indicated so in Suresh Budharmal Kalani v. State
of Maharashtra.
“A presumption can be drawn
only
from
facts
—
and
not
from
other
presumptions — by a process of probable and
logical reasoning.”
22. The High Court further held that in view of the
presumption as envisaged under Section 20 of the Act,
it was the duty of the accused to have rebutted the
same
by
producing
cogent
evidence
on
record.
The
accused has failed to discharge that onus. No doubt as

held
in

the
case
of
Subash
Parbat
(supra);
“The
Statutory presumption cannot be raised for an offence
u/s 13(1) (d) of the Act.”
under
section
7
of
However, for an offence
the Act this
presumption
of the aforesaid
would
arise.
23.
On
the
contentions
basis
urged
on
behalf
of
the
rival
legal
parties,
the
following points would arise for consideration of this
Court.
1)
Whether
the
demand,
acceptance
recovery of gratification are proved by
prosecution and whether the presumption
offence alleged to have been committed by
appellant would arise in this case?
and
the
of
the
2) Whether the findings and reasons recorded
on the charges by the High Court in reversing
the findings of acquittal recorded by the
Trial
Court
are
based
on
proper
re-
appreciation of legal evidence on record and
within the legal parameters laid down by this
Court in its decisions?
3) What order?
24. The
point
Nos.
1
and
2
are
inter-related
and
therefore, the same are answered together by assigning
the following reasons:

The
learned
senior
counsel
on
behalf
of
the
appellant has rightly placed reliance upon the evidence
elicited
in
the
cross
examination
of
PW-2
by
the
prosecutor. The relevant portion from translation of
deposition
of
PW-2
made
by
appellant
is
extracted
hereunder:
“One P.S.Saini from the customs department
asked me to pay Rs. 2 lakhs and at that time
the
appellant/accused
Satvir
Singh
was
checking the goods in the godown. On the same
day, at about 4.00 p.m. they took me to
Customs House at C.R. Building, and produced
me before Shri Sudan, Custom (Suptd.) who
checked my papers. Thereafter, I was advised
to
keep
cordial
relations
with
his
subordinates. Thereafter, when I came out of
the office of the superintendent, the accused
Satvir Singh was standing outside the office
with P.S. Saini who again demanded money from
me. I refused to pay the same.
On 7 th July,
1989, I received a telephone call from the
accused Satvir Singh.
At about 5-6 p.m. the
accused told me over the telephone, either to
make the payment or otherwise they would seize
the goods from my premises.
The accused
further asked me to make the payment at Gagan
Vihar residence. The accused asked me to pay
Rs.60,000/- first on 8.7.1989 at 8.00 a.m. as
I could not arrange the entire amount.
The
accused further asked to make the payment of
the remaining balance amount within three-four
days.
My brother in law, Shri Ram Malhotra
was sitting with me at the time of the
telephonic conversation.”

25. During the cross-examination of PW-2, he has stated
that the demand of Rs.2 lakhs was made by P.S. Saini on
4.7.1989 at his godown between 11.30 to 12.30 p.m.
On
the very same day, he was taken to office of Customs
department where Saini demanded the money at two places
i.e. firstly just outside the office of Superintendent
and secondly, at the staircase of the office building
and on both the occasions, the accused had not demanded
the money from the complainant, PW-2 at any time. It
has
been
further
stated
by
him
during
his
cross-
examination that on both the occasions, the accused was
at a distance of three-four feet.
It has been further
stated by him that he did not have any direct talk with
the
accused
godown.
either
at
the
C.R.
Building
or
at
his
He has further stated that he had met the
accused only once, so he had neither conversant with
the
voice
of
the
accused
nor
knows
his
style
of
talking.
26.
It has been further stated by PW-2 in his evidence
that, when he had gone to the house of the accused
along
with
the
punch
witness,
during
the
entire

conversation, there was no talk about the contents of
the rexine bag which he was carrying and neither did
the accused enquire about the money nor received the
same from the complainant.
27.
Further,
appellant
the
has
learned
rightly
senior
placed
counsel
reliance
for the
upon the
questions put to the appellant by the Court seeking the
explanation
from
him
under
Section
313,
CrPC
which
reads thus:
“Question: It is further in evidence against
you that while you were checking the goods on the
same day, Mr. P.S. Saini of the Customs Department
demanded a bribe of Rs. 2 lakhs from the
complainant, one lakh each for himself and the
accused failing which he threatened the seizure of
the said goods. What have you to say?
Ans:
It is incorrect.
No Customs officer
demanded any money in my presence.”
A reading of the question framed by the learned trial
Judge for seeking explanation from the appellant, would
certainly go to show that he has not demanded illegal
gratification from the complainant.
28.
The
learned
senior
counsel
on
behalf
of
the
appellant has further rightly placed reliance upon the

letter written by PW-2 Exh. PW-1/DA dated 15.11.1989 to
the Collector of Customs, which reads thus:
“In this connection, it is submitted that as
written earlier Shri Satvir Singh, Inspector
has never demanded any money on 4.7.1989 when
they visited my premises. As far as telephone
of 7.7.1989 is concerned, someone telephoned
me in the name of Satvir Singh, but I could
not recognize his voice as I have met Satvir
Singh
only
once
and
that
on
4.7.1989.
However, when I visited his house on 8.7.1989,
Satvir Singh did not demand any money nor
accepted the same.
This is for your
information please.”
In this regard, the relevant portion of the evidence of
Shri
AGL
Kaul,
PW-9,
Inspector,
CBI,
is
extracted
hereunder:
“During the course of investigation conducted
by him, he came across the letter Exh. PW-
1/DAwhich was already in the investigation file.
He further stated that he cannot tell whether or
not this letter was referred by the Customs
Department to the CBI for verification because
the letter was neither received nor seized by
him.
He recorded the statements of Chamanlal
Marwaha and Shri Sharwan Kumar Marwaha during
the investigation and after recording their
statements under Section 161 Cr.P.C.,
the said
witnesses stated that they were told by the
complainant that he has got the accused falsely
implicated in this case.
After consulting the
crime file, witnesses have stated that it is
correct that initially this case was recommended
for being sent for departmental action and not
for criminal prosecution. This recommendation
was made after obtaining legal opinion.”
(emphasis supplied)

29. It is clear from the contents of the aforesaid
documentary evidence on record upon which appellant has
rightly placed strong reliance that he is innocent is
evident from the version of the investigating officer
PW-9, who had examined those witnesses at the time of
the investigation of the case. They have stated that
initially this case was recommended for being sent for
departmental action and not for criminal prosecution
against the appellant. The said evidence would clearly
go
to
show
that
there
is
no
case
of
illegal
gratification either demanded by him or paid to him by
the
complainant
PW-2.
This
important
aspect
of
the
matter has been over-looked by the High Court at the
time
of
exercising
its
appellate
jurisdiction
for
setting aside the order of acquittal passed in favour
of the appellant. In fact, the Trial Court on proper
appreciation
of
both
oral
and
documentary
evidence
particularly the contents of the said letter-Ex.PW-1/DA
as admitted by PW-9 was considered by him and come to
the right conclusion to hold that the appellant is not
guilty of the offence and rightly passed the order of

acquittal which has been erroneously reversed by the
High Court as the same is contrary to the laws laid
down by this Court in the cases referred to supra which
relevant paragraphs are extracted while adverting to
the submissions of the learned senior counsel for the
appellant.
Therefore, this Court has to hold that the High
Court has exceeded its jurisdiction by not adhering to
the
legal
principles
laid
down
by
this
Court
in
reversing the judgment and order of the Trial Court in
exercise of its appellate jurisdiction.
30.
Further,
the
learned
senior
counsel
for
the
appellant has relied upon the statement of PW-3 who in
his testimony has stated thus:
“He along with the complainant left the CBI
office at 7.35 a.m. and reached the residence
of the accused at 8.00 a.m.
The government
vehicle was parked at a distance and he was
instructed to remain sitting in the car of the
complainant while the complainant would go to
the residence of the accused in order to find
out if the accused is available or not.
The
other members of the raiding party took their
positions here and there at a distance. The
complainant came back after an hour and asked
him to accompany him.
They both entered the
residence of the accused. The complainant was
carrying the bag containing the money.”

[Extracted from the translation made by
the appellant]
It
is
Inspector
also
P.S.
an
Saini
undisputed
was
arrayed
fact
as
that
a
neither
witness
nor
accused by the Investigating Officer. Ram Malhotra, the
brother-in-law of the complainant-PW2 who was stated to
be present at the time of the telephonic conversation
with him was also not examined during the investigation
to prove the fact that the appellant had telephonic
conversation with
him.
31. The learned counsel for the prosecution has also
relied
upon
Government
of
the
case
India9
of
in
C.K.
support
Damodaran
of
Nair
Vs.
presumption
of
offence alleged against the appellant which reads thus:
“Where, in any trial of an offence punishable
under Section 7 or Section 11 or clause (a) or
clause (b) of sub-section (1) of Section 13 it is
proved that an accused person has accepted or
obtained or has agreed to accept or attempted to
obtain for himself, or for any other person, any
gratification (other than legal remuneration) or
any valuable thing from any person, it shall be
presumed, unless the contrary is proved, that he
accepted or obtained or agreed to accept or
attempted to obtain that gratification or that
valuable thing, as the case may be, as a motive
or reward such as is mentioned in Section 7 or, as
the case may be, without consideration or for
consideration which he knows to be inadequate.”
9
(1997) 9 SCC 477

32. This Court, in K.S. Panduranga’s case (supra) has
held that the demand and acceptance of the amount of
illegal
gratification
precedent
to
by he
constitute an
accused
is
offence,
a
the
condition
relevant
paragraph in this regard from the above-said decision
is extracted hereunder:
“39. Keeping in view that the demand and
acceptance of the amount as illegal gratification
is a condition precedent for constituting an
offence under the Act, it is to be noted that
there is a statutory presumption under Section 20
of the Act which can be dislodged by the accused
by bringing on record some evidence, either direct
or circumstantial, that money was accepted other
than for the motive or the reward as stipulated
under Section 7 of the Act. When some explanation
is offered, the court is obliged to consider the
explanation under Section 20 of the Act and the
consideration of the explanation has to be on the
touchstone of preponderance of probability. It is
not to be proven beyond all reasonable doubt. In
the case at hand, we are disposed to think that
the explanation offered by the accused does not
deserve any acceptance and, accordingly, we find
that the finding recorded on that score by the
learned trial Judge and the stamp of approval
given to the same by the High Court cannot be
faulted.”
(emphasis supplied)
33. The learned senior counsel for the appellant has
also placed
reliance
upon
the
case
of
Banarsi
Das
referred to supra wherein it was held that:
“24. In M.K. Harshan v. State of Kerala this
Court in somewhat similar circumstances,

where the tainted money was kept in the
drawer of the accused who denied the same and
said that it was put in the drawer without
his knowledge, held as under:
“8. ... It is in this context the courts have
cautioned that as a rule of prudence, some
corroboration is necessary. In all such type
of
cases
of
bribery,
two
aspects
are
important. Firstly, there must be a demand and
secondly, there must be acceptance in the
sense that the accused has obtained the
illegal gratification. Mere demand by itself
is not sufficient to establish the offence.
Therefore,
the
other
aspect,
namely,
acceptance is very important and when the
accused has come forward with a plea that the
currency notes were put in the drawer without
his knowledge, then there must be clinching
evidence to show that it was with the tacit
approval of the accused that the money had
been put in the drawer as an illegal
gratification.”
The above-said paragraph from the above mentioned case
would go to show that the divergent findings recorded
by
the
High
Court
on
the
factum
of
demand
and
acceptance of illegal gratification by the appellant is
not proved in this case. In the said case this Court in
unequivocal terms has held that mere demand by itself
is not sufficient to establish the offence under the
Act. The other aspect, namely acceptance is also very
important. There must be clinching evidence with the
tacit approval of the accused that money was put by PW-

2 on the steel cot as stated by him in his evidence as
illegal gratification. In the case in hand, as per the
evidence of PW-2 and PW-3, the illegal gratification
was in a black rexine bag with a broken zip which was
put on a steel cot. As the contents of the bag were not
within
the knowledge
relevant
aspect
of
of the
the
case
accused, therefore, the
that has
the
appellant
accepted the illegal gratification as required under
Section 7 of the Act is not proved by the prosecution
by adducing cogent evidence in this regard.
34.
We
have
examined
the
evidences
on
record
as
a
whole, the said evidence is read along with documentary
evidence
of
Exh.PW-1/DA,
the
contents
of
which
are
extracted above. The said document is written by PW-2
in the year 1989, therefore, reliance should be placed
on the said evidence. The explanation which is sought
to be elicited from the appellant by the prosecution to
discard the said positive evidence in favour of the
appellant would further support his plea that he has
not demanded gratification from the complainant, PW-2.
We
are
not
at
all
impressed
with
the
plea
of
the

prosecution that the said letter was written by PW-2
under
pressure
as
stated
by
him
in
his
cross
examination in the year 1993. If it is true that the
letter
was
written
by
PW-2
under
pressure,
then
he
should have lodged the complaint in this regard with
the jurisdictional police or to the higher officers at
that relevant point of time or to the Trial Court when
the case was pending.
Therefore, the said portion of
the evidence of PW-2 cannot be accepted by us as the
same is untrustworthy. The black rexine bag containing
the illegal gratification which was kept on the steel
cot at the residence of the accused on 08.07.1989 was
not
recovered
from
the
person
of
the
accused.
Therefore, neither acceptance nor recovery of illegal
gratification from the appellant is proved.
the
reliance
placed
upon
the
relevant
Further,
paragraphs
extracted above from the judgments of this Court by the
learned
senior
counsel
on
behalf
of
applies aptly to the factual situation.
demand,
acceptance
gratification
and
alleged
to
recovery
have
of
been
the
appellant
Therefore, the
the
paid
illegal
to
the

appellant is not proved by the prosecution.
Thus, the
Trial Court on overall appreciation of the oral and
documentary evidence on record has come to the right
conclusion and recorded its findings of fact and held
that
the
demand,
gratification
from
acceptance
the
and
appellant
recovery
is
not
of
proved,
therefore there is no presumption under Section 20 of
the Act. The learned trial judge in his judgment has
rightly held that presumption of innocence is in favour
of the appellant and he was acquitted on merits.
35.
The
evidence
of
PW-3,
who
is
an
independent
witness, who had participated in the proceedings of the
raid at the appellant’s house, the relevant portion of
his
deposition
before
the
Trial
Court
is
extracted
hereunder:
“The complainant went to the residence of the
accused
while
I
remained
sitting
in
the
car....Thereafter I along with the accused went
inside the house of the accused.........The accused
Satbir Singh inquired from the complainant if he
had brought the money.
He further enquired
about me. Complainant introduced me as his
uncle.
The complainant told the accused that
there was nothing to worry and that his work
would be done......The accused took the money. The
complainant handed over the hand-bag containing
the GC notes to the accused.
The accused

touched ten toes with his right hand and placed
that hand bag containing the money on the cot
made of steel.......The complainant told that the
bag was containing Rs. 60,000/-.
36.
The
judgment
prosecution
of
this
Vaidhyanatha Iyer10
has
Court
placed
viz.
reliance
State
of
upon
Madras
the
v.
A
in support of the prosecution to
justify the findings and reasons recorded by the High
Court on the charges leveled against the appellant, to
reverse the acquittal and to convict and sentence him
for the offence, the relevant portion from the above
referred case reads thus:
“13. ....Where it is proved that a gratification
has been accepted, then the presumption shall
at once arise under the section. It introduces
an exception to the general rule as to the
burden of proof in criminal cases and shifts
the onus on to the accused. It may here be
mentioned that the legislature has chosen to
use the words “shall presume” and not “may
presume”, the former a presumption of law and
latter of fact. Both these phrases have been
defined in the Indian Evidence Act, no doubt
for the purpose of that Act, but Section 4 of
the Prevention of Corruption Act is in pari
materia with the Evidence Act because it deals
with a branch of law of evidence e.g.
presumptions, and therefore should have the
same meaning. “Shall presume” has been defined
in the Evidence Act as follows:
Whenever it is directed by this Act that
the court shall presume a fact, it shall
10
AIR 1958 SC 61

regard such fact as proved unless and until it
is disproved.
It is a presumption of law and therefore it
is obligatory on the court to raise this
presumption
in
every
case
brought
under
Section 4 of the Prevention of Corruption Act
because unlike the case of presumption of
fact, presumptions of law constitute a branch
of jurisprudence. While giving the finding
quoted above the learned Judge seems to have
disregarded the special rule of burden of
proof under Section 4 and therefore his
approach in this case has been on erroneous
lines.”
It
is
rightly
contended
by
the
learned
senior
counsel on behalf of the appellant that the presumption
of the guilt is not proved in the case on hand as the
prosecution has failed to prove the ingredients of the
provision of Section 7 of the Act, viz. demand and
acceptance of illegal gratification by the appellant to
constitute an offence alleged to have committed by him.
Therefore,
the
reliance
placed
on
the
evidence
of
prosecution witnesses i.e. PW-2, PW-3 and others by the
respondent’s counsel, the relevant portion of which is
extracted
in the
aforesaid portion
of the
judgment,
does not amount to presumption of offence as provided
under Section 20 of the Act.
Therefore, the question

of onus of proof to disprove the presumption did not
arise at all on the part of the appellant.
37.
The
High
Court
in
exercise
of
its
appellate
jurisdiction has exceeded its parameters laid down by
this
trial
Court
in
court.
erroneous
relevant
in
reversing
Therefore,
law
but
paragraphs
the
the
also
from
acquittal
the
findings
vitiated
judgment
order
are
in
in
of
not
law.
the
only
The
State
Kerala v. C.P.Rao (supra) are extracted hereunder:
“13. In coming to this conclusion, we are
reminded of the well-settled principle that
when the Court has to exercise its discretion
in an appeal arising against an order of
acquittal, the Court must remember that the
innocence of the accused is further re-
established
by
the
judgment
of
acquittal
rendered by the High Court. Against such
decision of the High Court, the scope of
interference by this Court in an order of
acquittal has been very succinctly laid down by
a three-Judge Bench of this Court in Sanwat
Singh v. State of Rajasthan. At SCR p. 129,
Subba Rao, J. (as His Lordship then was) culled
out the principles as follows:
“9. The foregoing discussion yields
the
following
results:
(1)
an
appellate court has full power to
review the evidence upon which the
order of acquittal is founded; (2) the
principles laid down in Sheo Swarup
case, afford a correct guide for the
appellate court’s approach to a case
in disposing of such an appeal; and
(3) the different phraseology used in

of

the judgments of this Court, such as,
(i)
‘substantial
and
compelling
reasons’, (ii) ‘good and sufficiently
cogent reasons’, and (iii) ‘strong
reasons’, are not intended to curtail
the undoubted power of an appellate
court in an appeal against acquittal
to review the entire evidence and to
come to its own conclusion; but in
doing so it should not only consider
every
matter
on
record
having
a
bearing on the questions of fact and
the reasons given by the court below
in support of its order of acquittal
in its arriving at a conclusion on
those facts, but should also express
those reasons in its judgment, which
lead it to hold that the acquittal was
not justified.”
Further, in the case of Murugesan,(supra) it is held as
under:
19. An early but exhaustive consideration of the law
in this regard is to be found in the decision of
Sheo Swarup v. King Emperor wherein it was held that
the power of the High Court extends to a review of
the entire evidence on the basis of which the order
of acquittal had been passed by the trial court and
thereafter to reach the necessary conclusion as to
whether order of acquittal is required to be
maintained or not. In the opinion of the Privy
Council no limitation on the exercise of power of the
High Court in this regard has been imposed by the
Code though certain principles are required to be
kept in mind by the High Court while exercising
jurisdiction in an appeal against an order of
acquittal. The following two passages from the report
in Sheo Swarup adequately sum up the situation:
“There is, in their opinion, no foundation for
the
view,
apparently
supported
by
the
judgments of some courts in India, that the
High Court has no power or jurisdiction to

reverse an order of acquittal on a matter of
fact, except in cases in which the lower court
has ‘obstinately blundered’, or has ‘through
incompetence, stupidity or perversity’ reached
such ‘distorted conclusions as to produce a
positive miscarriage of justice,’ or has in
some other way so conducted itself as to
produce a glaring miscarriage of justice, or
has been tricked by the defence so as to
produce a similar result.
(emphasis supplied)
Sections 417, 418 and 423 of the Code give to
the High Court full power to review at large
the evidence upon which the order of acquittal
was founded, and to reach the conclusion that
upon that evidence the order of acquittal
should be reversed. No limitation should be
placed upon that power, unless it be found
expressly
stated
in
the
Code.
But
in
exercising the power conferred by the Code and
before reaching its conclusions upon fact, the
High Court should and will always give proper
weight and consideration to such matters as
(1) the views of the trial judge as to the
credibility
of
the
witnesses;
(2)
the
presumption of innocence in favour of the
accused, a presumption certainly not weakened
by the fact that he has been acquitted at his
trial; (3) the right of the accused to the
benefit of any doubt; and (4) the slowness of
an appellate court in disturbing a finding of
fact arrived at by a Judge who had the
advantage of seeing the witnesses. To state
this, however, is only to say that the High
Court in its conduct of the appeal should and
will
act
in
accordance
with
rules
and
principles well known and recognised in the
administration of justice.”
20. The principles of law laid down by the Privy
Council in Sheo Swarup have been consistently
followed by this Court in a series of subsequent
pronouncements
of
which
reference
may
be

illustratively made to the following: Tulsiram Kanu
v. State, Balbir Singh v. State of Punjab, M.G.
Agarwal v. State of Maharashtra, Khedu Mohton v.
State of Bihar, Sambasivan v. State of Kerala,
Bhagwan Singh v. State of M.P. and State of Goa v.
Sanjay Thakran.
21. A concise statement of the law on the issue that
had emerged after over half a century of evolution
since Sheo Swarup is to be found in para 42 of the
Report in Chandrappa v. State of Karnataka. The same
may, therefore, be usefully noticed below:
“42. From the above decisions, in our
considered
view,
the
following
general
principles regarding powers of the appellate
court while dealing with an appeal against an
order of acquittal emerge:
(1) An appellate court has full power to
review,
re-appreciate
and
reconsider
the
evidence upon which the order of acquittal is
founded.
(2) The Code of Criminal Procedure, 1973 puts
no limitation, restriction or condition on
exercise of such power and an appellate court
on the evidence before it may reach its own
conclusion, both on questions of fact and of
law.
(3) Various expressions, such as, ‘substantial
and compelling reasons’, ‘good and sufficient
grounds’,
‘very
strong
circumstances’,
‘distorted conclusions’, ‘glaring mistakes’,
etc. are not intended to curtail extensive
powers of an appellate court in an appeal
against acquittal. Such phraseologies are more
in the nature of ‘flourishes of language’ to
emphasise the reluctance of an appellate court
to interfere with acquittal than to curtail
the power of the court to review the evidence
and to come to its own conclusion.

(4) An appellate court, however, must bear in
mind that in case of acquittal, there is
double presumption in favour of the accused.
Firstly, the presumption of innocence is
available
to
him
under
the
fundamental
principle of criminal jurisprudence that every
person shall be presumed to be innocent unless
he is proved guilty by a competent court of
law. Secondly, the accused having secured his
acquittal, the presumption of his innocence is
further
reinforced,
reaffirmed
and
strengthened by the trial court.
(5) If two reasonable conclusions are possible
on the basis of the evidence on record, the
appellate court should not disturb the finding
of acquittal recorded by the trial court.”
(emphasis supplied)
22. Another significant aspect of the law in this
regard which has to be noticed is that an appeal to
this Court against an order of the High Court
affirming or reversing the order of conviction
recorded by the trial court is contingent on grant
of leave by this Court under Article 136 of the
Constitution. However, if an order of acquittal
passed by the trial court is to be altered by the
High Court to an order of conviction and the accused
is to be sentenced to death or to undergo life
imprisonment or imprisonment for more than 10 years,
leave to appeal to this Court has been dispensed
with and Section 379 of the Code of Criminal
Procedure, 1973, provides a statutory right of
appeal to the accused in such a case. The aforesaid
distinction, therefore, has to be kept in mind and
due notice must be had of the legislative intent to
confer a special status to an appeal before this
Court against an order of the High Court altering
the acquittal made by the trial court. The issue had
been dealt with by this Court in State of Rajasthan
v. Abdul Mannan in the following terms, though in a
different context: (SCC pp. 70-71, para 12)

“12. As is evident from the above recorded
findings, the judgment of conviction was
converted to a judgment of acquittal by the
High Court. Thus, the first and foremost
question that we need to consider is in what
circumstances this Court should interfere
with the judgment of acquittal. Against an
order of acquittal, an appeal by the State is
maintainable to this Court only with the
leave of the court. On the contrary, if the
judgment of acquittal passed by the trial
court is set aside by the High Court, and the
accused is sentenced to death, or life
imprisonment or imprisonment for more than 10
years, then the right of appeal of the
accused is treated as an absolute right
subject to the provisions of Articles 134(1)
(a) and 134(1)(b) of the Constitution of
India and Section 379 of the Code of Criminal
Procedure, 1973. In light of this, it is
obvious that an appeal against acquittal is
considered on slightly different parameters
compared to an ordinary appeal preferred to
this Court.”
23. Having dealt with the principles of law that ought
to be kept in mind while considering an appeal against
an order of acquittal passed by the trial court, we may
now proceed to examine the reasons recorded by the trial
court for acquitting the accused in the present case and
those that prevailed with the High Court in reversing
the said conclusion and in convicting and sentencing the
appellant-accused.”
38. Further, as contended by the learned senior counsel
for the appellant, the High Court has not noticed the
very important lacuna in the prosecution case that as
per the evidence of PW-2 and PW-3 Rameshwar Nath, the
bribe money which was sought to be given to the accused
on 08.07.1989 was in a black rexine bag and not in the
brown rexine bag as shown to the witnesses before the

trial court by the prosecution. It has further come to
our
notice
that
neither
the
two
witnesses
nor
the
C.B.I. officials put any signature or identification
mark on the bottles containing solution which is the
most
crucial
evidence
in
the
case
to
prove
the
acceptance of the gratification by the appellant from
the
complainant.
C.B.I.
officials,
As
per
the
the
GC
statements
notes
were
of
not
PW-2
and
counted.
However, it is a matter of serious doubt of acceptance
the
notes
containing
in
the
black
rexine
bag
were
touched by the accused.
The aforesaid findings and reasons recorded by the
High Court are supported with the statements of law
laid down by this Court in C.M. Girish Babu (supra)
upon which the learned senior counsel on behalf of the
appellant
has
rightly
placed
reliance.
The
relevant
paragraph is extracted below:
“18. In Suraj Mal v. State (Delhi Admn.) this
Court took the view that mere recovery of tainted
money divorced from the circumstances under which
it is paid is not sufficient to convict the
accused when the substantive evidence in the case
is not reliable. The mere recovery by itself

cannot prove the charge of the prosecution
against the accused, in the absence of any
evidence to prove payment of bribe or to show
that the accused voluntarily accepted the money
knowing it to be bribe.”
39.
After careful observation of the above-mentioned
facts and evidence on record and on careful examination
of
the
aforesaid
rival
legal
contentions
urged
on
behalf of the parties, with reference to the extracted
portion of the evidence of PW-2, PW-3 and PW-9, we are
of the considered view that the prosecution has failed
to
prove
the
demand
and
acceptance
of
illegal
gratification by the appellant from the complainant PW-
2, upon whose evidence much reliance has been placed by
the learned counsel for the respondent.
40. We, accordingly answer the point No. 2 in favour of
the appellant that exercise of appellate jurisdiction
by the High Court to reverse the judgment and order of
acquittal is not only erroneous but also suffers from
error in law and liable to be set aside. Accordingly,
we answer the point Nos. 1 and 2 in favour of the
appellant.

Point No. 3.
41.
We have answered the point Nos. 1 and 2 in favour
of the appellant after adverting to the legal evidence
and
rival
parties.
legal
contentions
urged
on
behalf
of
the
We have arrived at the aforesaid conclusions
after accepting the well founded submissions made by
the learned senior counsel on behalf of the appellant.
In view of our findings and reasons on point Nos. 1 and
2,
the
submissions
made
by
the
learned
counsel
on
behalf of the respondent are rejected as the same are
wholly untenable in law.
For the foregoing reasons, we have to restore the
judgment and order of acquittal of the trial court by
setting aside the impugned judgment dated 07.01.2011
and
order
on
sentence
dated
08.03.2011
of
the
High
Court of Delhi in Criminal Appeal No.337 of 1999.

42.

Accordingly, the appeal is allowed. The appellant
is on bail.
The bail bonds shall stand discharged.
.................................................................................J.
[DIPAK MISRA]
.................................................................................J.
[V. GOPALA GOWDA]
New Delhi,
August 20,2014