illegal gratification

Case BriefsHigh Courts

Bombay High Court: K.R. Shriram, J., while explaining the concept of bribe under the Prevention of Corruption Act, 1988, upheld the decision of Sessions Court.

Present appeal was filed with respect to impugning an order and judgment passed by Special Judge under P.C. Act Pune acquitting respondent (referred as accused) of offence punishable under Section 7 (Public servant taking gratification other than legal remuneration in respect of an official act) and Sections 13(1) (d) read with Section 13(2) (Criminal misconduct by a public servant) of the Prevention of Corruption Act, 1988.

Prosecution’s Case

Sambhaji Namdeo Sakhare (PW 1) complainant and his family members were served with a notice from the office of Sub-Divisional Officer, Maval Sub-Division informing them about compensation to be paid to them against the acquisition of their property.

Rs 30,000 was towards compensation of the building in the acquired. When PW-1 went to the office of the Sub-Divisional Officer to collect the compensation amount, the accused demanded Rs 1,000 for preparing and giving the cheque of Rs 30,000 out of the total amount of compensation.

As PW-1 was not having Rs 1,000 at the said time, hence it was alleged that the accused asked him to bring the said amount on the next date and collect the said cheque of Rs 30,000.

PW-1 approached A.C.B and lodged a complaint. After formalities for pre trap panchanama were completed, the raiding party went to the office of accused.

Later, PW-1 and PW-2 went and met accused who told them to come again on a date informed to them. On 12-08-2003, the accused took the signature of the complainant on receipt of which revenue stamp was affixed and accused informed PW 1 that officer concerned was not available and therefore he should come back again on 14-08-2003.

On 14th August, 2003 raiding party went to the office of the accused, then again the complainant was told to come again at 4.00 P.M. At, 4.00 P.M. complainant and panch entered the office of the accused, cheque was given by accused to complainant and when complainant and panch started going out, accused went towards water cooler which was kept in the office. While drinking water, accused gestured by his hand to the complainant demanding money and then complainant handed over marked currency to accused who accepted those notes by his left hand and kept it in the left side pocket of his pant. Then complainant went out and gave the agreed signal to the raiding party.

Accused was immediately caught and the marked currency along with certain other amounts were found. The said currency was checked under an ultraviolet lamp. Thereafter, post trap panchanama was prepared, investigation commenced, and investigation papers were prepared.

Trial Court had concluded that accused required to be acquitted.

Bench noted a lot of inconsistencies in the evidence of the complainant.

High Court expressed that the law on the issue is well settled that demand of illegal gratification is sine quo non for constituting an offence under the Prevention of Corruption Act, 1988.

Bench elaborated on the concept of bribe and expressed that,

Mere recovery of tainted money is not sufficient to convict the accused when substantive evidence in the case is not reliable, unless there is evidence to prove payment of bribe or to show that the money was taken voluntarily as a bribe.

Illegal Gratification

Mere receipt of the amount by the accused is not sufficient to fasten guilt, in the absence of any evidence with regard to demand and acceptance of the amount as illegal gratification.

Therefore, the burden lies upon the accused to displace the statutory presumption raised under Section 20 of the 1988 Act, by bringing on record evidence, either direct or circumstantial to establish with reasonable probability, that the money was accepted by him, other than as a motive or reward as referred to in Section 7 of 1988 Act.

It is further stated that, while invoking the provisions of Section 20 of the Act, the Court is required to consider the explanation offered by the accused, if any, only on the touchstone of preponderance of probability and not on the touchstone of proof beyond all reasonable doubt.

In Court’s opinion, recovery of tainted currency is not sufficient to hold a person guilty. Demand has to be unequivocally proved.

Bench found that the evidence of complainant was fraught with a lot of inconsistencies and contradictions with the evidence of the prosecution witness.

Single Judge of this Court in Khushalchand Yashwant Gaikwad v. State of Maharashtra, 2018 SCC Online Bom 1073, held that it is well-settled law that mere possession and recovery of currency notes without proof of demand will not bring home the offence under Section 7 since the demand of illegal gratification is sine qua non to constitute the offence.

In view of the above discussion, High Court stated that there is an acquittal and therefore, there is double presumption in favour of the accused.

Adding to the above, Court held that firstly, the presumption of innocence available to the accused under the fundamental principle of criminal jurisprudence that every person shall be presumed to be innocent unless they are proved guilty by a competent court of law.

Secondly, accused having secured his acquittal, the presumption of his innocence is further reinforced, reaffirmed and strengthened by the trial court.

Therefore, Sessions Court rightly observed that the prosecution failed to prove its case.

Appeal was dismissed in the above view.[State of Maharashtra v. Srirang Dagaduji Bale, 2021 SCC OnLine Bom 1123, decided on 30-06-2021]

Advocates before the Court:

Ms. M.M. Deshmukh, Addl. P.P. for State.

Mr. Satyavrat Joshi for Respondent.

Case BriefsDistrict Court

Sessions Court, Greater Bombay: Abhijeet A. Nandgaonkar, Additional Sessions Judge, issued summons, being of the prima facie opinion that Chanda Kochhar, Former MD and CEO of ICICI Bank may have misused her official position in sanctioning loans to Videocon Group and got illegal gratification through her husband.

FACTUAL MATRIX

Accused 1 was the MD and CEO of ICICI Bank, whereas accused 2 is the husband of accused 1.

During June, 2019 to October, 2011 ICICI Bank sanctioned six high-value loans to various companies of Videocon Group in the tune of Rs 300 crores which was in contravention of the rules and policy of sanctioning committee. On the very next day of when the said amount of Rs 300 crores was disbursed, an amount of Rs 64 crores was transferred by the accused V.N. Dhoot to NRPL managed by accused Deepak Kochhar through his company SEPL.

Chanda Kochhar got illegal gratification/undue benefit through her husband.

ICICI Bank sanctioned various loans to Videocon Group of Companies. However, the said loans were turned NPA resulting in wrongful loss to ICICI Bank and wrongful gain to the borrowers and accused persons.

After Chanda Kochhar took over the charge of ICICI Bank as MD and CEO, all the credit facilities as stated above, sanctioned to Videocon group of companies.

The said loans were sanctioned by the different sanctioning committees and Chanda Kochhar was one of the Committee member which sanctioned RTL of Rs 300 crores to VIEL and Rs 750 crores to VIL.

Hence, total misappropriation/loss caused was of Rs 1,730.

Enforcement Directorate

After initiation of investigation, all the accused persons were arrested and it was found that Deepak Kochhar ( accused 2) had a close acquaintance and relationship with V.N. Dhoot, Chairman and Managing Director of Videocon Industries Ltd.

Accused 1 Chanda Kochhar had neither disclosed the above fact nor recused herself from sanctioning committee of ICICI bank while sanctioning loan to VIL or VIEL.

Day after the sanctioning of loan to VIEL Rs 64 crores was transferred to NRPL, owned and managed by accused Deepak Kochhar. The said was illegal gratification to accused Chanda Kochhar, through accused Deepak Kochhar by abusing her position as MD and CEO of ICICI Banking sanctioning the loan.

The said proceeds of crime Rs 64 crores transferred to NRPL through a web of companies was used to purchase properties.

Decision

Bench in view of the facts and circumstances of the case, opined that it appears that accused Chanda Kochhar misused her official position in granting the loan to accused V.N. Dhoot and/or Videocon Group Companies and got illegal gratification/undue advantage through her husband accused Deepak Kochhar, per se quid pro quo web-transactions, created by the accused persons through various companies for siphoning off money and proceeds of crime.

Hence, the above-stated constituted the commission of schedule offence, which gave rise to register the offence under Section 3 read with Section 70 punishable under Section 4 of the Prevention of Money Laundering Act.

Order

Process to be issued against the accused nos. 1 to 11, accused 2 who is in custody be served upon summons. ED granted leave to continue with the ongoing investigation and to take action as per law.[Directorate of Enforcement v. Chanda Kochhar, PMLA Special Case No. 915 of 2020, decided on 30-01-2021]

Image Credits [Chandra Kochhar]: Business Standard

Case BriefsSupreme Court

Supreme Court: Stating that it has some reservation in respect of the observation and findings recorded by the 3-judge bench of former CJ HL Dattu, V Gopala Gowda and Amitava Roy, JJ in P. Satyanarayana Murthy v. District Inspector of Police, State of Andhra Pradesh (2015) 10 SCC 152, the bench of R. Banumathi and R. Subhash Reddy, JJ has referred the following to a larger bench:

“The question whether in the absence of evidence of complainant/direct or primary evidence of demand of illegal gratification, is it not permissible to draw inferential deduction of culpability/guilt of a public servant under Section 7 and Section 13(1)(d) read with Section 13(2) of Prevention of Corruption Act, 1988 based on other evidence adduced by the prosecution.”

Satyanarayana Ruling:

In the said judgment, the court proceeded under the footing that failure of the prosecution to prove the demand for illegal gratification due to the death of complainant would be fatal to the prosecution case and recovery of the amount from the accused would not entail his conviction. The Court, in the said case, held:

“to hold on the basis of the evidence on record that the culpability of the appellant under Sections 7 and 13(1)( d )(i ) and ( ii) has been proved, would be an inferential deduction which is impermissible in law.”

Appellant’s contention based on the Satyanarayana ruling:

Mere proof of receipt of money by the accused in the absence of proof of demand of illegal gratification is not sufficient to prove the guilt of the accused.

“when the complainant passed away, primary evidence of demand is not forthcoming and when the prosecution could not establish the demand by such primary evidence, the conviction of the appellant cannot be sustained.”

State’s contention against the Satyanarayana Ruling:

In Satyanarayana, the court did not notice the line of judgments and the consistent view taken by this Court in various decisions that demand can be proved either by direct evidence or by drawing inference from other evidence like evidence of panch witness and the circumstances.

Court’s observation:

After referring to a number of judgments where accused was convicted even when the evidence of complainant was not available either due to death of complainant or where the complainant had turned hostile, the Court showed reservations on the judgment. It said:

“The direct or primary evidence of demand may not be available at least in three instances:- (i) where the complainant is dead and could not be examined; (ii) complainant turned hostile; and (iii) complainant could not be examined either due to non-availability or other reasons. Direct proof of demand may not be available in all the above instances but from the evidence of panch witness, acceptance of money was proved by Phenolphthalein Test and by raising presumption under Section 20 of the Act, it is permissible to draw inference to prove the demand.”

The matter was, hence, referred to a larger bench.

[Neeraj Datta v. State, 2019 SCC OnLine SC 296, decided on 28.02.2019]

Case BriefsHigh Courts

Gujarat High Court: The order of acquittal passed by the trial court in favor of the accused was upheld by a Single Judge Bench comprising of R.P. Dholaria, J., wherein it was held that in order to prove a case of demand of illegal gratification, the prosecution must adduce clinching evidence.

The respondent Taluka Surveyor, was accused of demanding illegal gratification from the complainant for measuring his land. He was accordingly prosecuted. However, on appreciation of evidence the trial court was of the view that the guilt of the respondent was not proved by the prosecution; and the trial Court acquitted the respondent. Aggrieved thus, the State filed the instant appeal.

The High Court perused the evidence adduced by the prosecution and also discussed the law on the subject; and was of the view that to prove the vital ingredients i.e. demand, acceptance and recovery, the evidence of crucial witnesses i.e. complainant, panchas and independent witness is worth to be appreciated. However, such evidence did not support the prosecution case. The demand of illegal gratification has to be proved by adducing clinching evidence. The prosecution in the present case failed to do so; and thus, the order of the trial court acquitting the respondent could not be faulted with. Accordingly, the appeal was dismissed. [State of Gujarat v. Amratbhai Zinabhai Chapaneria, 2018 SCC OnLine Guj 228, dated 16-02-2018]