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Synopsis

The Supreme Court recently said that the presumption under Section 20 of the Prevention of Corruption Act cannot arise merely on an allegation of demand and acceptance of illegal gratification.

"Unless proof is offered to the satisfaction of the Court that there is a demand and acceptance of illegal gratification, the presumption would not arise," a bench of Justices Sudhanshu Dhulia and K Vinod Chandran said.

The court stated that if there is a demand and acceptance of a bribe, then a presumption arises that it is to dishonestly carry out some activity by a public servant. However, proof must first be offered regarding the demand and acceptance. It is not the case that whenever there is a misuse of authority, a presumption of demand and acceptance of a bribe automatically follows, resulting in a valid allegation of corruption.

Relying on the five-judge Constitution bench judgment in Neeraj Dutta vs. State (NCT of Delhi) (2023), the bench pointed out that proof of demand (or an offer) and acceptance of illegal gratification by a public servant is a fact in issue in criminal proceedings and is a sine qua non to establish the guilt of the accused public servant under Sections 7 and 13 of the Act.

Court allowed an appeal filed by former Gujarat Minister Dileepbhai Nanubhai Sanghani against the Gujarat High Court's judgment refusing to exercise jurisdiction under Section 482 of the CrPC against the Special Judge's order rejecting his discharge application.

As per the case facts, the appellant was a minister in the Gujarat government who, after resigning, was proceeded against under the Prevention of Corruption Act, 1988. The allegation was that, with intent to obtain illegal gratification, fishing contracts in state-controlled reservoirs were allotted without adhering to the government's policy, which mandated tender proceedings.

Senior advocate Mukul Rohatgi, appearing for the appellant, submitted that there was not even an allegation in the investigation report or in the statements recorded by the investigating team that the appellant had demanded or accepted a bribe for issuing the grants. He contended that the grants, made at a pre-fixed upset price, were meant to benefit the Padhar Adivasi Community, as permitted under the Fisheries Department's policy, which had been approved by the Cabinet and the Chief Minister, as reflected in the investigation report itself.

Rohatgi argued that an alleged violation of policy or a mere peremptory grant made without following the tender process does not amount to an allegation of corruption under the Act, as held in the Neeraj Dutta case.

Senior advocate Iqbal Syed, appearing for the complainant-respondent, referred to Section 20 of the Act, arguing that a statutory presumption arises against the accused. He contended that the Minister of State had demanded a bribe, as evident from statements recorded in the investigation report.

He submitted that the government's policy mandated tendering for the distribution of state projects, which could not have been deviated from by the Minister or the department. It was under the Minister’s order that the department proceeded to make the grants without resorting to the tender process.

The state counsel refrained from taking sides but pointed out that while the investigation team had not clearly found evidence of bribe acceptance, a statement was recorded regarding a demand made by the first accused. The investigation report disclosed that a meeting was convened in the chambers of the first accused with Zonal Officers of the Fisheries Department, during which the decision to allocate water bodies was made and subsequently approved by the second accused.

After examining the facts and arguments, the court held that the question of presumption did not arise in the present case, where the special court had merely examined the complainant and summoned three officers from the investigation team under Section 311 of the CrPC for recording their statements.

"This is pre-charge evidence based on which summons have been issued to accused Nos. 2 to 7. However, even a prima facie finding has to be based on allegations containing the definite ingredients for which proof could be offered at trial, giving rise to the presumption under Section 20 of the Act, which presumption is also rebuttable," the bench observed.

In this case, the court noted that the complainant never alleged any wrongdoing by the appellant, nor did the statement recorded at the pre-evidence stage before the Special Judge contained such an allegation.

"The allegation was only that the Minister of State had granted the rights at an upset price, without following the Government Policy of 2004, thus causing a loss to the State exchequer, running into crores of rupees," the bench said.

Even in the special court's order, there was no reference to any allegation made by the complainant against the appellant, the court pointed out.

"We cannot but observe, as seen from the records produced before us, that the complainant had once sought to withdraw the complaint by way of an application, which was later withdrawn. The investigation at the first stage was carried out by the Superintendent of Police, Gandhinagar, who was relieved from the case, and the Special Judge directed the Gujarat Anti-Corruption Bureau to take over the investigation. It was the Anti-Corruption Bureau that filed the enquiry report," the bench said.

After examining the 2004 policy, the court noted that the tendering process was mandatory only for reservoirs outside tribal areas, with provisions for reservations and relaxations for tribals and societies.

"We do not find any enquiry having been carried out regarding the location or area of the reservoirs for which the grants were made. Be that as it may, even if the grants were made in non-tribal areas, the ingredients of the offences alleged under the Prevention of Corruption Act are absent," the bench said.

The court noted that the only charge was related to the misuse of authority, which did not fall under the Prevention of Corruption Act. None of the essential ingredients concerning demand, obtaining, or acceptance of a bribe or illegal gratification had been established.

"The accusation was only that the State’s policy required a tender process, but the Minister sanctioned the grant of fishing rights at an upset price. This is alleged to be a misuse of authority, especially since policy deviations can be made only by the Chief Minister or the Cabinet, as per the policy document and the Rules of Business," the bench said.

The court pointed out that the investigation report spoke only of an allegation of misuse of authority, without any claim of demand and acceptance of a bribe against the appellant.

The court accepted the appellant’s contention that there was no material in the investigation report, the pre-charge statements of the complainant or police officers, or even the statements of those questioned by the investigation team that could attract the provisions of the Prevention of Corruption Act.

"We are of the opinion that the discharge application of the appellant ought to have been allowed by the Special Court, especially since there is not even an allegation of demand and acceptance of a bribe by the second accused/appellant," the bench said, allowing the appeal and directing that proceedings against the appellant be dropped.

Case Title: Dileepbhai Nanubhai Sanghani Vs State of Gujarat & Anr