Can statutory presumption under Section 20 of the Prevention of Corruption Act be invoked solely on recovery of marked currency when demand and acceptance remain unproven?

Court holds that without proof of demand and voluntary acceptance, recovery alone cannot trigger the Section 20 presumption; upholds requirement of foundational facts as laid down in Neeraj Dutta. This Orissa High Court decision affirms existing precedent in vigilance prosecutions and serves as binding authority for subordinate courts, with persuasive value for other High Courts and the Supreme Court.

 

Summary

Category Data
Case Name CRLA/266/2012 of CHANDRAMANI MAHAR Vs STATE
CNR ODHC010042082012
Date of Registration 23-04-2012
Decision Date 26-08-2025
Disposal Nature Disposed Off
Judgment Author Mr. Justice Chittaranjan Dash
Court Orissa High Court
Bench Single Judge
Precedent Value Authoritative binding precedent on demand & acceptance; persuasive elsewhere
Overrules / Affirms Affirms
Type of Law Criminal law – Prevention of Corruption Act, 1988
Questions of Law
  • Whether demand and voluntary acceptance were proved
  • Whether Section 20 presumption arises on recovery alone
  • Validity of prosecutorial sanction
  • Reliability of trap witnesses
Ratio Decidendi

The offences under Sections 7 and 13(1)(d) of the PC Act require proof of demand and subsequent acceptance of illegal gratification as a fact in issue. Mere recovery of marked currency from a public servant’s file, without independent proof of demand or actual handling by the accused, cannot sustain conviction. A complainant’s hostile testimony negating demand is substantive when his prior Section 164 statement was not proved through the magistrate. In such cases, the mandatory presumption under Section 20 cannot be invoked. Sanction under Section 19 must be granted by a competent authority, and defects in delegation may be cured only if no prejudice is shown.

Judgments Relied Upon
  • Neeraj Dutta v. State (NCT of Delhi) (2023) 4 SCC 731
  • State of Kerala v. C.P. Rao (2011) 6 SCC 450
  • K. Shanthamma v. State of Telangana (2022) 4 SCC 574
  • P. Satyanarayana Murthy v. District Inspector of Police (2015) 10 SCC 152
  • B. Jayaraj v. State of A.P. (2014) 13 SCC 55
Logic / Jurisprudence / Authorities Relied Upon by the Court
  • Constitutional Bench’s delineation of proof of demand and acceptance
  • Distinction between presumption of fact and presumption in law under Section 20
  • Credibility standards for trap witnesses
  • Section 19(3) curing sanction irregularities
Facts as Summarised by the Court

The appellant, a Revenue Inspector, allegedly demanded ₹400 for processing an OLR case. A vigilance trap on 05-07-2007 used phenolphthalein-marked currency. Notes were recovered from the appellant’s case file; file-wash tested positive, hand-wash negative. Complainant turned hostile, denying any demand.

Practical Impact

Category Impact
Binding On All subordinate courts in Orissa
Persuasive For Other High Courts and the Supreme Court
Overrules None
Distinguishes Earlier convictions based solely on recovery without proof of demand, as in State of Kerala v. C.P. Rao and K. Shanthamma
Follows
  • Neeraj Dutta v. State (NCT of Delhi)
  • P. Satyanarayana Murthy v. District Inspector of Police
  • B. Jayaraj v. State of A.P.

What’s New / What Lawyers Should Note

  • Negative phenolphthalein test on the accused’s hands negates inference of handling despite recovery from file.
  • A complainant’s hostile testimony in court is substantive if prior Section 164 statement is not proved via the recording magistrate.
  • Section 20 presumption cannot be drawn on recovery alone; foundational proof of demand and voluntary acceptance is mandatory.
  • Reliance on a “shadow witness” may fail if such witness has repeatedly served in vigilance traps and lacks clear vantage to overhear demand.
  • Sanction under Section 19 must be granted by an authority competent to remove the public servant; absence of delegation proof may render sanction vulnerable, though Section 19(3) can cure harmless irregularities.

Summary of Legal Reasoning

  1. Reiterated Neeraj Dutta (2023) principle: demand and acceptance are fact in issue for Sections 7 and 13(1)(d).
  2. Complainant (P.W.7) turned hostile; his Section 164 statement unproved without magistrate’s testimony; therefore cannot be substantive.
  3. Shadow witness (P.W.4) credibility undermined by prior service as a stock vigilance witness and uncertain listening position.
  4. Independent witness (P.W.6) only corroborates recovery and chemical test, not demand or physical acceptance.
  5. Negative hand-wash destroys inference that the accused physically handled the notes.
  6. Without proof of demand or acceptance, mandatory presumption under Section 20 does not arise.
  7. Sanction challenge: absence of clear delegation suggests potential invalidity, though no prejudice shown and Section 19(3) may cure the defect.
  8. Cumulative procedural lapses and failure to prove foundational facts compel acquittal.

Arguments by the Parties

Petitioner (Appellant):

  • Demand and acceptance were not proved; complainant denied any demand.
  • Section 164 statement is inadmissible without the magistrate’s testimony.
  • Shadow witness is a “stock witness” and lacked proper vantage.
  • Negative hand-wash negates physical handling.
  • Sanction by ADM was invalid; competent authority is the Collector.
  • Relied on Neeraj Dutta, State of Goa v. Babu Thomas, Sushil Kumar Pati, State of Kerala v. C.P. Rao, K. Shanthamma.

Respondent (State Vigilance):

  • Independent trap witnesses (P.W.4, P.W.6) proved demand and recovery.
  • File-wash tested positive; Section 20 presumption shifts burden to accused.
  • Complainant’s hostility does not abate trial; prior consistent statements exist.
  • Minor procedural lapses are non-fatal.
  • Sanction challenge barred by Section 19(3); reliance on Raghubir Singh, Shankar Prasad, Vinod Kumar Garg, Neeraj Dutta.

Factual Background

The appellant, as Revenue Inspector, was handling OLR Case No. 12/2005 when he allegedly demanded ₹400 as illegal gratification. The complainant lodged a vigilance report and participated in a trap on 05 July 2007, offering phenolphthalein-marked notes which were accepted and placed in the case file. Vigilance officers recovered the notes, conducted file-wash and hand-wash tests, obtained prosecution sanction under Section 19, and charged the appellant under Sections 7 and 13(2) read with 13(1)(d) of the PC Act. The trial court convicted and sentenced him; this appeal ensued.

Statutory Analysis

  • Section 7 PC Act: Offence of acceptance of illegal gratification where an offer by the bribe giver is accepted by a public servant; requires proof of offer and acceptance.
  • Section 13(1)(d) PC Act: Offence of obtaining illegal gratification through demand by public servant.
  • Section 20 PC Act: Mandatory presumption that recovered gratification was for motive or reward, applicable only after proof of voluntary acceptance.
  • Section 19 PC Act: Requires prior sanction by competent authority; Section 19(3) can cure irregularities unless prejudice is shown.

Alert Indicators

  • ✔ Precedent Followed

Citations

  • Neeraj Dutta v. State (NCT of Delhi), (2023) 4 SCC 731
  • State of Kerala v. C.P. Rao, (2011) 6 SCC 450
  • K. Shanthamma v. State of Telangana, (2022) 4 SCC 574
  • P. Satyanarayana Murthy v. District Inspector of Police, (2015) 10 SCC 152
  • B. Jayaraj v. State of A.P., (2014) 13 SCC 55

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