STATE OF LOKAYUKTHA POLICE, DAVANAGEREversusC B NAGARAJ

                    [2025] 5 S.C.R. 1037 : 2025 INSC 736

                State of Lokayuktha Police, Davanagere1
                                   v.
                              C B Nagaraj
                         (Criminal Appeal No. 1157 of 2015)
                                          19 May 2025
           [Pankaj Mithal and Ahsanuddin Amanullah,* JJ.]


                                   Issue for Consideration
       Issue arose as regards the correctness of the order passed by the
       High Court setting aside the order of conviction of the respondent
       u/ss.7, 13(1)(d), 13(2) of the Prevention of Corruption Act, 1988
       for the demand of illegal gratification.

                                            Headnotes†
       Prevention of Corruption Act, 1988 – ss.7, 13(1)(d), 13(2) –
       Demand of illegal gratification – Complainant-teacher applied
       for a validity certificate and for the grant of the same, spot
       inspection report had to be prepared by the respondent-
       officer in Taluka Panchayath – Case of the complainant that
       respondent demanded illegal gratification to submit the report,
       and the same day the respondent received illegal gratification
       from the complainant, and thereafter tainted currency notes
       recovered from the possession of the respondent – Trial court
       convicted and sentenced the respondent u/ss.7, 13(1)(d),
       13(2) – High Court set aside order – Interference:
       Held: Not called for – Only the version of complainant himself
       can be said to have some basis with regard to the demand of
       bribe – Deposition of the prosecution witness being not very
       coherent and slightly self-contradictory, the benefit thereof has to
       flow to respondent – For deposition of complainant to be taken
       as fully reliable and made the sole basis to convict respondent, it
       would require greater scrutiny apropos its veracity and reliability –
       Till the date when respondent had conducted the physical/spot
       inspection, not even a whisper of there being any demand of
       bribe – Prosecution case itself makes it clear that respondent had
       informed complainant that he had already forwarded the concerned


1    Be read as ‘State by Lokayuktha Police’.
* Author
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    file – Thus, there was no occasion for complainant to go ahead
    with paying the amount after the work for which the bribe was
    purportedly sought, had already been done – Observation of the
    High Court correct that just because money changed hands it
    cannot be ipso facto presumed that the same was pursuant to a
    demand, for the law requires that for conviction under the Act, an
    entire chain beginning from demand, acceptance, and recovery
    has to be completed – When initial demand itself is suspicious,
    even if two other components can be held to be proved, the chain
    would not be complete – Testimony of complainant does not
    inspire confidence, his conduct sufficient to render his testimony
    unreliable – Thus, since factum of demand itself not been proved
    beyond reasonable doubt, the acquittal of respondent cannot be
    termed perverse or unwarranted – Impugned judgment upheld.
    [Paras 23-28]

                             Case Law Cited
    State of Karnataka v. Chandrasha [2024] 11 SCR 1321 : 2024 SCC
    OnLine SC 3469; Md. Rahim Ali v. State of Assam [2024] 7 SCR
    2329 : 2024 SCC OnLine SC 1695; Jay Kishan v. State of U.P.
    [2025] 3 SCR 65 : 2025 SCC OnLine SC 296; Paritala Sudhakar
    v. State of Telangana, 2025 SCC OnLine SC 1072; Yadwinder
    Singh v. Lakhi, 2025 SCC OnLine SC 686 – referred to.

                                List of Acts
    Prevention of Corruption Act, 1988.

                             List of Keywords
    Bribe; Illegal gratification; Unreliable testimony; Extension officer;
    Spot inspection report; Phenolphthalein-smeared currency notes;
    Sodium carbonate solution turned pink; Demand, acceptance
    and recovery; Factum of demand; Demand of illegal gratification;
    Validity certificate; Tainted currency notes.

                            Case Arising From
    CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
    1157 of 2015
    From the Judgment and Order dated 09.07.2013 of the High Court
    of Karnataka at Bangalore in CRLA No. 12 of 2012
[2025] 5 S.C.R.                                                             1039

         State of Lokayuktha Police, Davanagere v. C B Nagaraj


                         Appearances for Parties
     Adv. for the Appellant:
     D. L. Chidananda.
     Advs. for the Respondent:
     Dr. Joseph Aristotle S., Sr. Adv., Ms. Priya Aristotle, Ashish Yadav,
     Ms. Anagha S. Desai.

                Judgment / Order of the Supreme Court

                                 Judgment

     Ahsanuddin Amanullah, J.

     This appeal assails the Final Judgment and Order of a learned
     Single Judge of the High Court of Karnataka (hereinafter referred to
     as the ‘High Court’) dated 09.07.2013 rendered in Criminal Appeal
     No.12/2012 (hereinafter referred to as the ‘Impugned Judgment’)
     [2013 SCC OnLine Kar 5293], whereby the High Court set aside
     the Judgment and Order of conviction dated 23.12.2011 passed by
     the learned Special Judge, Davanagere (hereinafter referred to as
     the ‘Trial Court’) in Spl. C. (Lokayuktha) No.8/2007. Vide this Order,
     the Trial Court convicted the sole Respondent under Sections 7,
     13(1)(d) read with 13(2) of the Prevention of Corruption Act, 1988
     (hereinafter referred to as the ‘Act’). The Respondent was sentenced
     to undergo simple imprisonment for a period of six months and to
     pay fine of Rs. 2,000/- (Rupees Two Thousand) for the offence
     punishable under Section 7 of the Act, and simple imprisonment for
     a period of 2 years and pay a fine of Rs. 3,000/- (Rupees Three
     Thousand) for the offence punishable under Sections 13(1)(d) read
     with 13(2) of the Act.

     BRIEF FACTS:
2.   The Respondent was working as an Extension Officer, in the office
     of the Taluka Panchayath, Davanagere. The Complainant, one Mr. E
     R Krishnamurthy (hereinafter referred to as the ‘Complainant’) was
     appointed to the post of Primary School Teacher in Yadgir Academic
     District, under Category-II A. A letter was sent to the BCM Office,
     Davanagere from the DDPI Office, Yadgir for the certified copy of
     Validity Certificate of the Complainant’s claim under Category-II A.
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     This file was put up to the Respondent to enquire and report. The
     Complainant alleged that the Respondent on 07.02.2007 at about
     12:30 PM demanded illegal gratification of Rs.1,500/- (Rupees One
     Thousand Five Hundred) from him to submit the spot inspection
     report prepared by the Respondent.
3.   On this allegation, a complaint was registered against the Respondent
     by the Davanagere Lokayuktha Police Station under Sections 7,
     13(1)(d) read with 13(2) of the Act.
4.   It is further alleged that on the same day between 5:30 PM and
     5:45 PM, the Respondent received said illegal gratification from the
     Complainant.
5.   Pursuant thereto, a trap was conducted by the Lokayuktha Police
     team on 07.02.2007. Through this trap, phenolphthalein-smeared
     currency notes amounting to Rs.1,500/- (Rupees One Thousand Five
     Hundred) received by the Respondent, were seized by the trap team.
     Thereafter, the Respondent’s fingers were dipped in sodium carbonate
     solution which turned pink due to the presence of phenolphthalein
     on the fingers of the respondent as they had come in contact with
     the currency notes smeared with phenolphthalein.
6.   In this backdrop, the Trial Court framed two questions: Whether
     on 07.02.2007, the Respondent demanded illegal gratification of a
     sum of Rs.1,500/- (Rupees One Thousand Five Hundred) from the
     Complainant as motive or reward for performing the above-mentioned
     official act/favour? And, whether the Respondent, on the same date
     between 5:30 PM and 5:45 PM in his office, obtained the said sum
     from the Complainant for showing the above-mentioned act/favour,
     and thereby committed misconduct in the discharge of his duties?
7.   Answering both questions in the affirmative, the Trial Court convicted
     the Respondent under the charged provisions of the Act. The High
     Court, vide the Impugned Judgment, allowed the Respondent’s appeal
     and set aside the order of conviction by the Trial Court.
8.   Against the Impugned Judgment of the High Court, the State through
     the Lokayuktha Police is in appeal before this Court.

     APPELLANT’S SUBMISSIONS:
9.   The learned counsel for the Appellant contended that the presumption
     under Section 20 of the Act, comes into play once demand and
[2025] 5 S.C.R.                                                      1041

         State of Lokayuktha Police, Davanagere v. C B Nagaraj


     acceptance of a sum of money is proved. Learned counsel submitted
     that, this presumption, though being rebuttable at the option of
     the accused, the Respondent herein did not adduce any material
     evidence, and also did not cross-examine the prosecution witness on
     this point. Further, it was submitted that the prosecution on the other
     hand, had proved beyond all reasonable doubt that the recovery of
     the tainted currency notes amounting to Rs.1,500/- (Rupees One
     Thousand Five Hundred) from the possession of the Respondent,
     was a bribe.
10. To support this contention, learned counsel placed reliance on the
    decision of this Court in State of Karnataka v Chandrasha, 2024
    SCC OnLine SC 3469 wherein it has been held that ‘… Section 20
    gets attracted when it is proved that the public servant has accepted
    or agreed to accept any gratification other than legal remuneration
    and in that case, presumption is that it is the motive or reward for any
    of the acts covered under Section 7, 11, or 13(1)(b) of the Act. …’
    The Court also held that the presumption under Section 20 of the
    Act is similar to the presumption under Section 118 of the Negotiable
    Instruments Act, 1881, where the onus is on the accused to prove
    that he is not guilty of the offences charged.
11. Thus, learned counsel for the Appellant submitted that once the
    recovery of bribe amount from the Respondent is proved, the
    explanation offered by the Respondent – that the money received
    by him was repayment of money lent by the Respondent to the
    Complainant on an earlier occasion, is clearly not worthy of being
    accepted. Therefore, upon the aspects of ‘demand’ and ‘acceptance’
    of the bribe amount being established beyond doubt, no two views
    are possible in the matter. It was urged that the appeal should be
    allowed.

     RESPONDENT’S SUBMISSIONS:
12. Per contra, learned counsel for the Respondent based his submissions
    on three points. Firstly, learned counsel submitted that the evidence of
    the Complainant is not credible and shows mala fide conduct. Learned
    counsel submitted that the Complainant with oblique intentions denied
    the spot inspection report though he had signed it. However, when
    he was confronted with the said spot inspection report, he conceded
    thereto, stating that it was signed by him and his father.
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13. Secondly, it was urged that the Complainant was aware that the spot
    inspection report had already been sent to the concerned department,
    and there was no work pending with the Respondent, at the time of
    the alleged demand.
14. Thirdly, learned counsel contended that the Respondent has been
    consistently stating, right from the time of seizure, without any
    afterthought, that the alleged bribe recovered from the Respondent,
    was only repayment of amount that was given to the Complainant
    at the time of the spot inspection.
15. Learned counsel summing up his arguments submitted that the
    Respondent is a 67-year-old, award-receiving serviceman with
    an impeccable service record, and suffers from permanent visual
    disability and old age ailments. It was urged that the appeal be
    dismissed in the interest of justice.

     ANALYSIS, REASONING, AND CONCLUSION:
16. We have gone through the pleadings, materials on record and
    considered the submissions made on behalf of the parties.
17. The admitted facts are that the Respondent, at the relevant point
    in time, was holding the post of Extension Officer in the Office of
    Taluka Panchayath, Davanagere. The Complainant had applied
    for a Validity Certificate with regard to claim under Category-II A
    and for the grant of the same, the matter had to be placed before
    Caste Scrutiny Committee along with a spot inspection report, to be
    prepared by the Respondent.
18. In this connection, the Respondent visited the village of the
    Complainant on 05.02.2007 and thereafter the Complainant went to
    his office on 07.02.2007 at about 12:30 PM and again visited him
    at 5:30 PM on the same day.
19. The entire episode hinges around the aforesaid factual narrow
    compass. As per the Complainant’s/prosecution version, the
    Respondent, to favour the Complainant demanded Rs.1,500/-
    (Rupees One Thousand Five Hundred) as illegal gratification from
    the Complainant when the Complainant came to his office at 12:30
    PM on 07.02.2007. It is further alleged that to satisfy such demand,
    the Complainant again went to the office of the Respondent on the
    same day at 5:30 PM alongwith an amount of Rs.1,500/- (Rupees
[2025] 5 S.C.R.                                                      1043

         State of Lokayuktha Police, Davanagere v. C B Nagaraj


     One Thousand Five Hundred), which was allegedly accepted by the
     Respondent in the presence of the trap witnesses/panchas.
20. On behalf of the prosecution, nine witnesses have been examined,
    whereas on behalf of the defence, one witness was produced.
21. From the evidence recorded of the prosecution witnesses, PW2
    stated that the Respondent asked about the alleged bribe, when
    the Complainant asked about the report. However, in his cross-
    examination, initially PW2 stated that he had not heard the
    conversation between the Respondent and the Complainant which
    occurred inside the chamber of the Respondent, as he was standing
    near the entrance door. However, PW2 later stated that when the
    Respondent and the Complainant came down, he followed them, and
    the Respondent demanded the bribe amount from the Complainant,
    and thereafter, when they walked down the stairs, he had seen
    the Complainant give the bribe amount to the Respondent from
    a distance of 2 to 3 feet. Yet, PW2 further stated that he did not
    know whether the Respondent had asked the Complainant for the
    amount he had given to him. Except for this reference, coming in the
    deposition of PW2 apart from that of the Complainant himself i.e.,
    PW1, no other witness has testified to being privy of such demand.
    Even in the initial complaint of the Complainant, he has stated
    that he had gone to enquire about the certified copy of the Validity
    Certificate from the Respondent, whom he met on 07.02.2007 in
    the afternoon at about 12:30 PM, who is alleged to have told him
    that though the spot inspection report, that had to be sent to the
    BCM Office, Davanagere was ready, he would only forward it on
    payment of Rs.1,500/- (Rupees One Thousand Five Hundred). The
    Complainant, taking the plea that he did not have the money with
    him, told the Respondent that he would return in the evening with
    the money. Thereafter, the Complainant moved the Lokayukhta’s
    Office and the trap came to be organized.
22. From the aforesaid, as per the version of the Complainant, the demand
    was made for the first time on 07.02.2007 at about 12:30 PM by the
    Respondent and later on as per the deposition of the witnesses, the
    Respondent is said to have informed the Complainant that he had
    already forwarded the file and after that also asked for the money,
    which was paid and recovered from the Respondent.
23. In such background, it is clear that, basically, it is only the version
    of the Complainant himself which can be said to have some basis
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     with regard to the demand of the amount of Rs. 1,500/- (Rupees
     One Thousand Five Hundred) as bribe, allegedly made by the
     Respondent. The reference in PW2’s deposition being not very
     coherent and slightly self-contradictory, the benefit thereof has to
     flow to the Respondent, in the absence of PW2’s testimony being
     clear on this point.
24. Coming to the deposition of the Complainant himself read with his
    complaint – for it to be taken as fully reliable and made the sole
    basis to convict the Respondent, the same would require greater
    scrutiny apropos its veracity and reliability. A glaring pointer in this
    regard is the fact that the Complainant categorically stated in his
    deposition that he was not aware of any spot inspection report by
    the accused on 05.02.2007, however the moment he was confronted
    with the document viz. Exhibit D8, he, without demur, accepted the
    same. Not stopping at acceptance, the Complainant also admitted to
    have signed on the document and identified both his and his father’s
    signature as also of the witness.
25. It is pertinent to note that till 05.02.2007, when the Respondent had
    conducted the physical/spot inspection, there is not even a whisper of
    there being any demand of bribe. Moreover, when the Complainant
    went back to the Respondent’s office at 5:30 PM with the money,
    the prosecution case itself as per the deposition of its witnesses
    makes it clear that the Respondent had informed the Complainant
    that he had already forwarded the concerned file. Thus, if the same
    is accepted, there was no occasion for the Complainant to go ahead
    with paying the amount, which he claims to be in the nature of bribe
    demanded by the Respondent, after the work for which the bribe was
    purportedly sought, had already been done. The observation of the
    High Court to this extent is correct that just because money changed
    hands, in cases like the present, it cannot be ipso facto presumed
    that the same was pursuant to a demand, for the law requires that for
    conviction under the Act, an entire chain – beginning from demand,
    acceptance, and recovery has to be completed. In the case at hand,
    when the initial demand itself is suspicious, even if the two other
    components – of payment and recovery can be held to have been
    proved, the chain would not be complete. A penal law has to be strictly
    construed [Md. Rahim Ali v State of Assam, 2024 SCC OnLine
    SC 1695 @ Paragraph 45 and Jay Kishan v State of U.P., 2025
    SCC OnLine SC 296 @ Paragraph 24]. While we will advert to the
[2025] 5 S.C.R.                                                          1045

         State of Lokayuktha Police, Davanagere v. C B Nagaraj


     presumption under Section 20 of the Act hereinafter, there is no cavil
     that while a reverse onus under specific statute can be placed on
     an accused, even then, there cannot be a presumption which casts
     an uncalled for onus on the accused. Chandrasha (supra) would
     not apply as demand has not been proven. In Paritala Sudhakar v
     State of Telangana, 2025 SCC OnLine SC 1072, it was stated thus:
           ‘21. As far as the submission of the State is that the
           presumption under Section 20 of the Act, as it then was,
           would operate against the Appellant is concerned, our
           analysis supra would indicate that the factum of demand,
           in the backdrop of an element of animus between
           the Appellant and complainant, is not proved. In such
           circumstances, the presumption under Section 20 of the
           Act would not militate against the Appellant, in terms of
           the pronouncement in Om Parkash v. State of Haryana,
           (2006) 2 SCC 250:
                ‘22. In view of the aforementioned discrepancies
                in the prosecution case, we are of the opinion
                that the defence story set up by the appellant
                cannot be said to be wholly improbable.
                Furthermore, it is not a case where the burden of
                proof was on the accused in terms of Section 20
                of the Act. Even otherwise, where demand has
                not been proved, Section 20 will also have
                no application. (Union of India v. Purnandu
                Biswas [(2005) 12 SCC 576: (2005) 8 Scale
                246] and T. Subramanian v. State of T.N. [(2006)
                1 SCC 401: (2006) 1 Scale 116])’
                                                 (emphasis supplied)’
                    (emphasis in bold is original, underlining is ours)

26. Moreover, the testimony of the Complainant, as discussed supra,
    does not inspire confidence, inasmuch as, for reasons best known
    to him alone, he completely denied the visit of the Respondent for
    spot inspection, that too, just two days prior to the date of the trap
    and immediately changed such stance by accepting such visit and
    admitting the spot report as also identifying his own, his father’s and
    the witness’s signatures. In the considered opinion of this Court, such
    conduct is sufficient to render his testimony unreliable.
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27. Though it can be commented that the High Court was required to
    give detailed factual reasoning, which has not been done, as to
    why it was overturning an order of conviction by that of acquittal,
    yet since the factum of demand itself has not been proved beyond
    reasonable doubt, the acquittal of the Respondent by the Impugned
    Judgment cannot be termed perverse or unwarranted, in the factual
    matrix of the present lis. In Yadwinder Singh v Lakhi, 2025 SCC
    OnLine SC 686, this Court opined that ‘The Trial Court could have
    better worded its order through clearer reasoning.’ However, upon
    examination of all relevant factors, the Court chose to restore the
    order of the Trial Court therein and set aside the order impugned
    therein, upon examining all factors of the matter itself. In the instant
    case, needless to add, we have applied our mind independently to
    all material aspects and find ourselves ad idem with the conclusion
    of the High Court.
28. Thus, on an overall conspectus of the facts and circumstances of
    the case and the discussions made hereinabove, we do not find
    any ground made out by the Appellant requiring interference by this
    Court. The Impugned Judgment is, hence, upheld.
29. Accordingly, the appeal stands dismissed.
30. No order as to costs.

     Result of the case: Appeal dismissed.



     †
         Headnotes prepared by: Nidhi Jain