CRLP/10898/2024 of Itta Upender Rao Vs The State of Telangana on 5 December 2025

ORDER

This Criminal Petition is filed by the petitioner-accused No.2 seeking to quash the proceedings against him in C.C. No.2 of 2022 pending on the file of the learned I Additional Special Judge for Central Bureau of lnvestigation Cases, Hyderabad (for short 'the learned trial Court') registered for the offences under Sections 1208 of the Indian Penal Code (for short 'lPC') read with Section 7(a) of the Prevention of Corruption Act (for short 'the Act').

02. Heard Sri V.R.Machavaram, learned counsel for the petitioner and Sri Srinivas Kapatia, learned Special : i i I I I I I I I

Public Prosecutor for the central Bureau of lnvestigation Perused the record 03(a). The brief facts of the case are that, based on a complaint dated 11.11.2020 rodged by shri Kammari Kalappa before the superintendent of police, cBl, ACB, Hyderabad, it was alleged that the accused No.1, an lncome Tax lnspector, demanded an undue advantage of Rs.1,00,000/- from the complainant for closing a Tax Evasion Petition pending against him before the lncome Tax officer, Unit-|, lncome Tax lnvestigation Department, Hyderabad. The said complaint was verified by Shri shekhar Dora Babau, lnspector. During the verification, the complainant, accompanied by an independent witness, approached the accused No.1 on the pretext of negotiating the bribe amount, during which the accused No.1 agreed to reduce the demanded amount to Rs.80,000/-, directing the complainant to arrange the money at the earliest and to contact him once the amount was ready. ln the presence of the verifying officer and an independent witness, the complainant also spoke to the accused No.1 over phone and requested whether he JI 't; could pay Rs.40,0001 as the first installment' to which the accused No.1 declined. The said conversation was overheard by the verifying officer and the independent witness. O3(b). lt is further alleged that on 12.11.2020, a trap was laid, during which the accused No.1 was caught while demanding and accepting the undue advantage of Rs.80,000/- from the complainant. During the post-trap proceedings, the hand-wash of the accused No.1 in colourless sodium carbonate solution turned pink. Further, an amount of Rs.30,000/-, being part of the trap money, was recovered from the possession of the accused No.'l . Durtng the same proceedings, the remaining amount of trap money, i.e. Rs.50,000/-, was recovered from the possession of the petitioner-accused No.2, also an lncome Tax lnspector, who was assisting the accused No.1 in handling the verification of the Tax Evasion Petition against the complainant. The hand- wash of the accused No.2 also turned pink, indicating his handling of the tainted currency. Both the accused No.1 and the petitioner-accused No.2 were arrested after completion of fl,,$ 1 ::3: i I

all legal formalities and were remanded to judicial custody. During the course of investigation, on 13.11.2020, Shri ltta Upender Rao was arraigned as accused No.2. Oa(a). Learned counsel for the petitioner_accused submitted that the petitioner-accused No.2 has no involvement whatsoever with the alleged offences. lt is contended that there is no material or evidence to substantiate the allegation of criminal conspiracy between the accused Nos.1 and 2. rhere is no allegation that the petitioner-accused No.2 ever demanded any money from the complainant. lt is further submitted that the verification report of the lnspector of police, cBl, does not contain any averment regarding the presence of the petitioner-accused No.2 along with the accused No.1 at the time of the alleged demand of bribe. 04(b). lt is further submitted that even according to the charge sheet, no official favour of any nature was pending with the petitioner-accused No.2 in relation to the de-facto complainant. lt is also submitted that the petitioner:accused ot, i l i ! I

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No.2 had already been transferred from the said post and had joined his new place of posting, and therefore, he had no exclusive custody or control over the office table drawer from which the alleged amount was recovered. No part of the alleged bribe money was recovered from the personal possession of the petitioner-accused No.2. The essential ingredients necessary to attract the offences punishable under Sections 120r- of IPC read with 7(a) of the Act are absent. 0a(c). With the above submissions, while praying to quash the proceedings against the petitioner-accused No.2, he relied upon a decision of the Honourable supreme court in P. somaraju v. state of Andhra Pradesh' wherein it was held at Paragraph Nos.17, 18 & 23 that: "17. We are unable to appreciate the reasoning adopted by the High Court in this regard. tn the first place, the negative result of the 'hand-wash'fesf was only one of several susprbious circumstances considered by the Trial Court, not the first or mosf determinative one. More impoftanily, it is not the case 'zozs tttsc tz6s of either side that the appertant physicarty handred the tainted notes, and the same has been accepted by the High Court. The prosecution maintains that the nofes were dropped into the drawer at the appellant's instance, while the defence asserfs that they were ptaced there without his knowledge For either side, the 'hand- wash'test and the negative result thereof is of no consequence as it cannot advance the case one way or the other. What is troubling is that the High Court has neverlheless seized upon this circumstance and gone on to attribute wrongful intent to the appellant. We take this opportunity to reiterate that suspicion, however strong, cannot take the place of proof.

18. The statutory presumption under Secflon 20 of the PC Act is not automatic and arises only once the foundational facts of demand and acceptance are proved. The same has been reiterated time and again by this Court; in the recent decision of Rajesh Gupta vs. Sfafe through Central Bureau of tnvestigation, it was held: "17. For an offence under Section 7 of PC Act, the demand of iilegal gratification is a sine qua non to prove the guilt. Mere recovery of currency nofes cannot constitute an offence under Secfion 7 of PC Act, unless rt rs proved beyond reasonable doubt that accused voluntarily accepted the money, knowing it to be a bribe. The proof of acceptance of illegal ll . l , a gratification can foilow onty if there is proof of demand.',

23. ln contrast, the defence has consistenily maintained that the aileged demand and acceptance of bribe never took place. According to the appellant, the complainant entered his office arone and Quring the appellant's brief absence, placed the tainted amount in the left_drawer of the table. Accordingly, when the trap-pafty entered, the appellant immediately denied having received any money, and the phenolphthalein fesf on both hands yietded negative resu/fs. " 04(d). Further, he relied upon a decision of the Honourable Supreme court in N.vijayakumar v. sfafe of Tamil Nadu2 wherein it was herd at paragraph No. 12 that: "12. lt is equalty well setiled that mere recovery by itself cannot prove the charge of the prosecution against the accused. Reference can be made to the judgments of this Couft in the case of C.M.Girish Babu v. CBl, Cochin, High Couft of Kerala (2009) 3 SCC 779 and in the case of B.Jayaraj v. Sfafe of Andhra Pradesh (2014) 73 scc 5s. tn the aforesaid Judgments of this Court while considering the case under Secfions 7, 13(l)(d)(i) and (ii) of the prevention of Corruption Act, lggg it is reiterated that to prove the charge, it has to be proved beyond reasonable 2criminarAppearNos.l00-101 of 2021(Arisingoutof S.L.p.(crr).Nos.4729 _4730of 2o2o)

doubt that accused voluntarity accepted money knowing it to be bribe. Absence of proof of demand for illegal gratification and mere possession or recovery of currency nofes ,'s not sufficient to constitute such offence. ln the said judgments it is also held that even the presumption under Section 20 of the Act can be drawn only after demand for and acceptance of illegal gratification is proved /f is a/so fairly well settled that initial presumption of innocence in the criminal juisprudence gefs doubted by acquiftal recorded by the trial court. The relevant paragraphs 7, I and 9 of the judgment in the case of B. Jayaraj (supra) read as under: "7. lnsofar as the offence under Secfion 7 is concerned, it rs a seff/ed position in law that demand of illegal gratification is srne qua non to constitute the said offence and mere recovery of currency nofes cannot constitute the offence under Secfion 7 unless it is proved beyond all reasonable doubt that the accqsed voluntarily accepted the money knowing it to be a bribe. The above position has been succinctly laid down in several judgments of this Coutt. By way of illustration reference may be made to the decision in C.M. Sharma v. Sfafe of A.P. K2010) 75 SCC 1 : (2013) 2 SCC (Cri) 891 and C.M. Giish Babu v. CBt K200e) 3 SCC 779 : (2009) 2 SCC p0 lt. ( I

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8. ln the present case, the complainant did not support the prosecution case insofar as demand by the accused is concerned. The prosecution has not examined any other witness, present at the time when the money was allegedly handed over to the accused b,y the complainant, to prove that the sarne was pursuant to any demand made by the accused. When the complainant himself had disowned what he had sfafed in the initial complaint (Ext. P11) before LW9, and there is no other evidence to prove that the accused had made any demand, the evidence of PW 1 and the contents of Ext. Pll cannot be relied upon to come to the conclusion that the above material furnishes proof of the demand allegedly made by the accused. We are, therefore, inclined to hold that the learned trial court as well as the High Couft was not correct in holding the demand alleged to be made by the accused as proved. The only other material available is fhe recovery of the tainted currency nofes from the possession of the accused. ln fact such possession is admitted by the accused himself. Mere possession and recovery of the currency nofes from the accused without proof of demand will not bring ,.1

home the offence under Section T. The above also will be conclusiye rnsofar as the offence under Secfions 13(1)(d)(0 and (ii) is concerned as in the absence of any proof of demand for iltegal gratification, the use of corrupt or iilegal means or abuse of position as a public seruant to obtain any valuable thing or pecuniary advantage cannot be hetd to be established.

9. lnsofar as the presumption permissible to be drawn under Section 20 of the Act is concerned, such presumption can only be in respect of the offence under Secfion 7 and not the offences under Secfions 13(1)(d)(i) and

(ii) of the Act. ln any event, it is only on proof of acceptance of iltegat gratification that presumption can be drawn under Secfion 20 of the Act that such gratification was received for doing or forbearing to do any official act. proof of acceptance of illegal gratification can follow only if there is proof of demand. As the same is lacking in the present case the primary facts on the basis of which the legal presumption under Secfibn 20 can be drawn are wholly absent. The above said view taken by this Court, fulty supports the case of the appellant. ln view of the /

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contradictions noticed by us above in the depositions of key wifnesses examined on behatf ofthe prosecution, we are of the view that the demand for and acceptance of bribe amount and cell phone by the appellant, is not proved beyond reasonable doubt. Having regard to such evidence on rgcord the acquittal recorded by the trial court is a ,,possible view" as such the judgment of the High Court is fit to be se/ asrde. Before recording conviction under the provisions of Prevention of Corruption Act, courls have to take utmosl care in scanning the evidence. Once conviction is recorded under provisions of Prevention of Corruption Act, rt casfs a social stigma on the person in the society apart from serious consequences on the seruice rendered. At the same time it is a/so to be noted that whether the view taken by the trial court is a poss ibte view or not, the're cannot be any definite proposition and each case has to be judged on its own merits, having regard to evidence on record." 0a(e). Further, he reried upon a decision of the Honourable supreme court in Neeraj Dutta v. sfafe (Govt. of Ncr of Dethi)3 wherein it was held at paragraph No.6g that "68. what emerges from the aforesaid dr.scussion r's summarised as under: 3 ItSZS;4 Supreme Court Cases 725

(a) Proof of demand and acceptance of iltegal gratification by a public seruant as a fact in issue by the prosecution is a sine qua non in order to establish the guilt of the accused public seruant under Secfions 7 and 13 (1)(d) (i) and(ii) of the Act.

(b) ln order to bring home the guitt of the acgused, the prosecution has to first prove the demand of iltegat gratification and the subsequent acceptance as a matter of fact. This fact rn issue can be proved either by direct evidence which can be in the nature of oral evidence or documentary evidence.

(c) Further, the fact rn issue, namely, the proof of demand and acceptance of iltegal gratification can a/so be proved by circumstantial evidence in the absence of direct oral and documentary evidence.

(d) ln order to prove the fact rn issue, namely, the demand and acceptance of illegat gratification by the public seruant, the following aspecfs have to be borne in mind:

(i) if there is an offer to pay by the bribe giver without there being any demand from the public seruant and the latter simply accepfs the offer and receives the illegal gratification, it is a case of acceptance as per Secfion 7 of the Act. ln such a case, there need not be a pior demand by the public servant.

(ii) On the other hand, if the public seruant makes a demand and the bibe giver accepts the demand and tenders the demanded gratification which in turn is received by the public seruant, ff is a case of obtainment. ln the case of obtainment, the prior demand for illegal gratification emanates from the public seruant. Ihis is an offence under Section 13

(1) (d)(i) and (ii) of the Act.

(iii) ln both cases ot (i) and (ii) above, the offer by the bribe giver and the demand by the public seruant respectively have to be proved by the prosecution as a fact rn issue. ln other words, mere acceptance or receipt of an illegal gratification without anything more would not make it an offence under Secfrbn 7 or Secfion 13 (1)(d), (i) and (ii) respectively of the Act. Therefore, under Section 7 of the Act, in order to bring home the offence, there must be an offer which emanates from the bribe giver which is accepted by the public seruant which would make it an offence. Similarly, a prior demand by the public servant when accepted by the bribe giver and inturn there is a payment made which is received by the public seruant, would be an offence of obtainment under Secfion 13 (1)(d) and (i) and (ii) of the Act.

(e) The presumption of fact with regard to the demand and acceptance or obtainment of an illegat gratification may be made by a court of law by way of an inference only when the foundational facts have been proved by relevant oral and documentary evidence and not in the absence thereof. On the basis of the material on record, the Court has the discretion to raise a presumption of fact while considering whether the fact of demand has been proved by the prosecution or not. Of course, a presumption of fact is subject to rebuttal by the accused and in the absence of rebuttal presumption sfands.

(t) ln the event the complainant turns ,hostile,, or has died or is unavairabre to ret in his evidence during triar, demand of illegar gratification can be proved by tetting in the evidence of any other uvifness who can again ret in evidence, either orally or by documentary evidence or the prosecution can prove fhe gase by circumstantial evidence. The trial does not abate nor does ft result in an order of acquittar of the accused public servant.

(g) ln so far as Secflon 7 of the Act is concerned, on the proof of the facts in issue, Secfion 20 mandates the court to raise a presumption that the iilegar gratification was for the purpose of a motive or reward as mentioned in the sard Secfion. The sard presumption has to be raised by the court as a legal presumption or a presumption in law. Of course, the said presumption is a/so subject to rebuttar. section 20 does not appty to Section 13 (1) (d) (i) and (ii) of the Act.

(h) We clarify that the presumption in law under secfion 20 of the Act is drsfrncf from presumption of fact referred to above in point (e) as the former is a mandatory presumption while the latter is discretionary in nature."

05. on the other hand, rearned Speciar pubric Prosecutor for the central Bureau of lnvestigation contended that there are triabte issues and factual aspects to be examined by the learned trial court and it is not a fit case to quash the proceedings against the petitioner at this juncture and the matter is to be decided after conducting trial by the learned trial Court and prayed to dismiss this Criminal Petition.

06. Having regard to the submissions made by both sides and upon a perusal of the material on record, it is evident that the case against the petitioner-accused No.2, as projected in the charge sheet, pertains only to his alleged participation in the handling of the verification process and in assisting the accused No.1. There is no allegation in the record that the petitioner-accused No.2 himself made any demand for illegal gratification from the complainant. The record clearly demonstrates that the alleged demand was made solely by the accused No.1, and the role attributed to the petitioner-accused No.2 is confined to the alleged handling or recovery of a part of the trap money from the drawer of his office table.

07. lt is a well-settled principle of law that, for an offence under Section 7 of the Act, proof of demand and acceptance of illegal gratification is a sine qua non, and mere recovery of currency notes, in the absence of such proof, is insufficient to sustain the charge. The statutory presumption under Section 20 of the Act arises only after the foundational facts of demand and acceptance are estabrished; the presumption is not automatic, as held in the above decisions. [/ere recovery of tainted currency notes frorn the drawer of the petitioner-accused No.2, which is accessible to several persons, or recovery not from his exclusive personal possession, does not, by itself, constitute proof beyond reasonable doubt of voluntary acceptance by the petitioner- accused No.2.

08. lt is not the case of the prosecution that the petitioner-accused No.2 either direcfly demanded or accepted the gratification from the complainant. where the foundational fact of demand and/or acceptance is absent, the mandatory presumption under secfion z0 of the Act cannot be invoked. The legal position is clear that mere possession or recovery of currency notes is not enough to constitute the offence under section 7 of the Act unless it is proved beyond reasonabre doubt that the accused votuntariry accepted the money knowing it to be bribe. Even though the hand_wash test produced a pink reaction, as per the setfled principre of law such tests are only one of the circumstances to be considered and cannot by themsetves suppry the missing rink of demand or acceptance.

09. A perusar of the entire record indicates that the principal allegations are directed against the accused No.1, who is alleged to have demanded iilegar gratification from the complainant for extending an officiar favour. rnsofar as the petitioner-accused No.2 is concerned, even according to the charge sheet, no officiat favour of any nature was pending with him in relation to the de-facto complainant. 10' Apparenry, the petitioner-accused No.2 had already been transferred from the said post and had joined at his new prace of posting, and that he was present in the office on the rerevant date onry for compreting pending work. However, no materiat has been praced by the prosecution to demonstrate that he had fuil custody or contror over the tabre

drawer from which the amount was recovered. tt is also pertinent to note that no part of the alleged bribe money was recovered from the personal possession of the petitioner- accused No.2. Therefore, the mere recovery of a portion of the tainted currency from an office drawer, in the absence of proof of the petitioner's exclusive or personal custody over that drawer or of any direct act of receiving the money, does not conclusively establish voluntary acceptance. The fact of the petitioner's transfer and the absence of evidence showing his exclusive control over the drawer at the relevant time further weakens any inference of acceptance. consequently, the essential ingredient of proof of demand or offer and acceptance, or of cogent circumstantial evidence unerringly pointing to such acceptance, is absent in the present case.

11. ln order to substantiate a charge of criminat conspiracy requires cogent material demonstrating a common intention or a meeting of minds to commit the substantive offence. on a careful scrutiny of the entire material available on recordi the prosecution has not placed ,, -/

\ '19 any material to show that the petitioner-accused No.2 and the accused No.1 had agreed to demand or accept illegal gratification from the complainant. The available material does not establish any linkage indicative of a criminal conspiracy between the accused No.1 and the petitioner- accused No.2. As seen from the record, the prosecution has relied upon mobile phone conversations between the complainant and the accused No.1 in support of certain allegations, however, no call data, conversations, or any other mode of communication between the accused No.1 and the petitioner-accused No.2 has been produced to substantiate the charge of criminal conspiracy or to demonstrate the petitioner's involvement. The foundational facts necessary for drawing a presumption under Section 20 of the Act, or for establishing the offence under Section 7 of the Act read with Section 120B of lPC, are absent insofar as the petitioner-accused No.2 is concerned. Therefore, the continuation of criminal proceedings against him would amount to an abuse of the process of law, and the same is liable to be quashed.

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12. Accordingly, this criminal petition is ailowed and the criminal proceedings against the petitioner-accused No.2 in c.c.No.2 of 2022 pending on the fire of the rearned r Additional special Judge for centrar Bureau of rnvestigation Cases, Hyderabad, are hereby quashed. As a sequel, pending miscellaneous applications, if any, shall stand closed. SD/. L. VIJAYA SISTANT REGI /TRUE COPYI/ SECTION OFFICER the State of

5. Two CD CoPies I, To,

4. Sa/psl

HIGH COURT DATED:05/1 212025

ORDER

CRLP.No.10898 ot 2O24 ALLOWING THE CRIMINAL PETITION yiP Sr-.r\7 a q f,o .-'! iln u$ 2125 SPa.rtlt't f:o * * Op