Holding

A conviction under Section 7 of the Prevention of Corruption Act, 1988 cannot be sustained where the accused's knowledge that the money was a bribe is not proved.

Summary

The case involved an Excise Sub‑Inspector (A‑1) who demanded a bribe from shop owner K. Subba Reddy (PW‑1) to release sealed stock and a stock register. PW‑1 paid the demanded amount to a Home Guard (A‑2), who kept the money in his pocket and was later found with the cash, which tested positive for the phenolphthalein test. Both A‑1 and A‑2 were convicted under Section 7 of the Prevention of Corruption Act, 1988 by the trial court and the conviction was upheld by the High Court. On appeal, the Supreme Court examined whether there was sufficient evidence to prove that A‑2 knew the money was a bribe. The Court held that no material demonstrated A‑2's knowledge of the illicit nature of the payment, and his explanation that the money was to be remitted to a person named ‘S’ was plausible. Consequently, the conviction of A‑2 was set aside and the appeal was allowed.

Issues considered

Whether the Home Guard (A‑2) had knowledge that the money received was a bribe, satisfying the mens rea requirement under Section 7 of the Prevention of Corruption Act, 1988.

Legislation cited

Prevention of Corruption Act, 1988s. 7

Subjects

bribePrevention of Corruption ActknowledgeHome Guardconvictionevidencephenolphthalein test

Judgment

r-

K. SUBBA REDDY A
v.
STATE OF ANDHRA PRADESH

SEPTEMBER 28, 2007
B
[DR. ARIJIT PASAYAT AND D.K. JAIN,JJ.]

Prevention of Corruption Act, 198&

s. 7-Demanding ofbribe by Excise officialfrom complainant for C
returning the stock register and asking him to hand over demanded
money on the next day to Home Guard-Money handed over-Trap
laid and Home Guard caught with tainted money-Courts below
convicting him-Correctness of-Held: Not correct as material not
sufficient to prove that Home Guard had any knowledge that the money D
handed over was bribe.
~-
Prosecution case was that PW-1 and his fatherwere running wine
shops. The Excise Department raided the shop and found some stock
without licence. They registered case against them and it ended in their
E
conviction. The Excise Superintendent issued show cause notice for
cancellation oflicence. A-1, the Excise Sub-Inspector sealed the shop
pursuant to the direction of Superintendent. PW-1 approached High
Court seeking direction for the release of the seized stock. The High
Court passed an order in favour of PW-1, directing the excise officials F
to release the stock. PW-1 approached A-1 to remove the seals and to
open the doors of the shop. A-1 demanded bribe ofRs.5000/- to open
the seal, and when PW-1 expressed his inability, A-1 reduced the amount
to Rs.3000/-. A-1 asked him to pay the amount the next day and further
told him that in case he goes for checking of shops, the amount may be G
paid to A-2-appellant. On the next day, PW-1 paid the amount to A-2.
A-2 counted the notes, keptthe amount in his left pocket. Subsequently,
the amount was recovered from A-2 and the phenolphthalein test
conducted on the fingers of both the hands and the left pant pocket of
419 H
\
~1
\._
420 SUPREME COURT REPORTS [2007] I 0 S.C.R.

'
A A-2 proved positive. The Trial court rejected the plea of A-1 that PW-
1 paid the amount to A-2 to hand over the same to one person 'S' for .r
the purpose of remitting the same to the treasury and convicted both
A-1 and A-2 under s.7 ofPrevention of Corruption Act, 1988. The High
Court upheld the conviction.
B
In appeal to this Court, A-2-Appellant contended that no definite
role was ascribed to him and no material was adduced to show that A-
2 had any knowledge thatthe money was being paid to A-1 as bribe. -(
..,
Allowing the appeal, the Court
c
HELD: 1. There is no material to show about the knowledge ofA-
2 regarding the money being bribe. He had offered the explanation that
the money was to be paid to 'S'. In this connection, reference is made
to the evidence ofPW-1. He has only stated that A-1 asked him to hand
D over the money to A-2 if he had gone out for checking of shops.
[Para 7] (423-E, F]
1
2. Appellant (A-2) at the relevant point of time was working as a
Home Guard. He was assigned different duties at different places. It is
accepted in the cross-examination by PW-1 that there is no Sub-treasury
E at Mydukur and ifanybody wants to remit money to the Government,
one has to go out to different places. It is also accepted that there is a
practice of giving money to some boys working in the shops or some
places to remitthe money to the Government treasury at different places
indicated by the shop owners. It was also accepted that 'S' was a person
F who used to remit the amount to Government on behalfofshop owners.
It is the accepted position that the present appellant had no role to play
in the return of the stock register. [Para 8) [423-F, G; 424-A, B]
CRIMINAL APPELLATE JURISDICTION : Criminal Appeal No.
G 1309of2007.
From the Judgment and Order dated 9.9.2005 of the High Court >
of Judicature of Andhra Pradesh at Hyderabad in Criminal Appeal No.
1362/1999.

H C.S.N. Mohan Rao for the Appellant.
K. SUBBA REDDY v. STATE OF ANDHRA PRADESH 421
[PASAYAT,J.]
D. Bharathi Reddy for the Respondent. A
The Judgment of the Court was delivered by
DR. ARIJIT PASAYAT, J. 1. Leave granted.

2. Challenge in this appeal is to the judgment rendered by a learned B
Single judge of the Andhra Pradesh High Court upholding the conviction
of the appellant punishable under Section 7 of the Prevention of Comiption
~-
Act, 1988 (in short the 'Act'). The appellant had faced trial along with
..., another accused and for the sake of convenience he is described as A-
2 hereinafter. Both the accused persons were convicted for the offence C
punishable under Section 7 of the Act and sentenced to undergo rigorous
imprisonment of one year ea<:h and to pay a fine of Rs. I,000/- with default
stipulation. They were, however, acquitted of the other charges.
_3. Sans unnecessary details, the prosecution version as unfolded
during trial is as follows: D
A-1 worked as an Excise Sub Inspector, at Mydukur, Cuddapah
District and A-2 worked as a Home Guard. PW.I is the de facto
complainant. His father by name Subba Reddy was running a wine shop
at Mydukur known as "Eswara Wines" since I 987. PW. I obtained a E
license to run another wine shop known as "New Eswara Wines" and
was rurining the said wine shop. He was assisting his father in the said
business. On 7.2.I988 the enforcement wing of the Excise D~partment
raided the shop of his father in his presence. The raiding party found some
stock without license. A case was registered against PW. I and his father F
and it ended in conviction in April, 1994. They preferred an appeal and
it was pending at the relevant point of time. On 27.4.1994 the Excise
Superintendent issued a show cause notice to PW-1 for cancellation of
license issued in his favour. On 3.5. I 994 A. l sealed his shop pursuant to
.the directions of the Excise Superintendent. On 4.5.1994 PW-I sent G
Ex.P4 reply, which was received by the Excise Superintendent under
Ex.PS acknowledgement. Subsequently, PW.I filed W.P. No. 9460 of
1994 before the High Court seeking a direction for the release of the stock
seized by A. I from his shop known as "New Eswara Wines". The High
Court passed an ord~r on 11.5.1994 in W.P.M.P. No. 11535of1994, H
422 SUPREME COURT REPORTS [2007] 10 S.C.R.

A in favour of PW. I, directing the excise officials to release the seized
stocks. On I5.5.1994 PW.I approached the Superintendent of Excise
along with the order of the High Court for the release of the stock. On
the same day, the Excise Superintendent directed A. I to open the seat of
the shop and handover the stock to PW.I. PW.I approached A·I to
B - remove the seals and to open the doors of the shop. At that time A-I
demanded Rs. 5,000/- towards bribe for opening the seals and when
PW. I expressed his inability, A. I reduced the amount to Rs.3,000/~.
Though A. I opened the shop by removing seals, he refused to give the --{
stock register unless and until the bribe ofRs.3,000/- is paid. PW. I, who -
c had no inclination to pay the bribe to A. I, preferred Ex.P-I 0 complaint
to Anti Corruption Bureau (for short 'ACB') officials on I6.5.1994. On
the same day, PW.7 and members of the trap party reached the office of
A-I at about 5.00 p.m. Immediately, PWs. I and 2 went to A. I. When
A- I demanded the bribe, PW. I told him that the money was ready, but
D A-I told him to come on the next day i.e. I 7.5.1994 and further told
that in case he goes for checking of shops, the amount may be paid to
A.2, i.e. the present appellant. On the next day i.e. I 7.4. I 994 at about
I l.30 a.m. PW-I met PW-2 enquiring about A-1 and A-2 came and
asked PW-I to give the bribe of Rs. 3,000/- as demanded by A-1.
E Accordingly, PW-I paid the amount to A.2. A.2 counted the notes, kept
the amount in his left pocket. Subsequently, the amount was recovered
from A-2 and the phenolphthalein test conducted on the fingers of both
the hands and the left pant pocket of A-2 proved positive. PW-8 after
completion of investigation laid the charge sheet. Charges were framed.
F Appellant denied the charges and claimed for trial.
4. The prosecution in order to establish the guilt of the accused
persons examined 8 witnesses and marked 23 documents and produced
9 material objects. As noted above, the trial Court considering the oral
and documentary evidence recorded the conviction. Before the trial Court
G the prosecution referred to the evidence of PW- I who claimed that as
per the instructions of A-I money was handed over to A-2. A-I denied
the demand and acceptance of the bribe and pleaded that PW-1 paid
the amount to A-2 to hand over the same to one person namely,
Subbarayudu for the purpose of remitting the same to the treasury. The
H
I

1~
K. SUBBA REDDY v. STATE OF ANDHRA PRADESH 423
[PASAYAT, J.]
trial Court held that the tainted money was delivered to A-2 and it was A
recovered from A-2. Accordingly, both A-1 and A-2 were guilty. The
High Court by the impugned order upheld the conviction of the two
accused persons.
5. In support of the appeal, learned counsel for the appellant
submitted that no definite role was ascribed to the present appellant and B
no material has been adduced to show that A-2 had any knowledge that

- the money was being paid to A-1 as bribe. There is not even any
suggestion, much less, no evidence to show that A-2 had any knowledge
that he was being used as a conduit for the purpose of payment of bribe
to A-1. It is, therefore, submitted that the conviction is not maintainable. C
6. Learned counsel for the State on the other hand submitted that
the com1ected SLP (Crl.) No.2113/2006 filed by A-1 has been dismissed. ·
Though there is no direct evidence about the knowledge of A-2-the
present appellant about the money being bribe to A-1, it can reasonably D
be inferred from the background facts that he was actually a conduit and
the money was paid to him and he was asked to hand over the same to
A- l. On the contrary, the totally unaccepted plea that money was to be
paid to somebody else has been raised which has been rightly rejected
by the trial Court and the High Court. The evidence of PW-1 is of vital E
importance.
7. There is no material to show about the knowledge of A-2
regarding the money being bribe. He had offered the explanation that the
money was to be paid to Subbarayudu. In this connection, reference is F
made to the evidence of PW-1. He has only stated that A-1 asked him
to hand over the money to A-2 if he had gone out for checking of shops.
8. Appellant (A-2) at the relevant point oftime was working as a
Home Guard. He was assigned different duties at different places. It is
accepted in the cross exan1ination by PW-1 that there is no Sub-treasury G
at Mydukur and if anybody wants to remit money to the Government,
one has to go out to different places. It is also accepted that there is a·
practice of giving money to some boys working in the shops or some
places to remit the money to the Government treasury at different places
H
424 SUPREME COURT REPORTS (2007] 10 S.C.R.

A indicated by the shop owners. It was also accepted that Subbarayudu >-
was a person who used to remit the ainount to Government on behalf 9f
shop owners. It is the accepted position that the present appellant had
no role to play in the return of the stock register. It is the prosecution
case that A-1 had wanted d1e bribe to be paid for the return of the stock
B register.
· 9. Above being the position, the material is not sufficient to hold the
appellant guilty. His conviction is accordingly set aside. He was released
on bail pursuant to the order of this Court dated 27.2.2006. His bail bonds
C shall stand discharged.
l 0. The appeal is allowed.
D.G. Appeal allowed.