1

REPORTABLE
2025 INSC 868
IN THE SUPREME COURT OF INDIA
CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO.391 OF 2017

M SAMBASIVA RAO ...APPELLANT

VERSUS

THE STATE OF ANDHRA PRADESH ...RESPONDENT

J U D G M E N T

AHSANUDDIN AMANULLAH, J.

The present appeal challenges the Final Judgment and Order

dated 21.08.2015/09.09.2015 passed in Criminal Appeal No.548/2006

(hereinafter referred to as the ‘Impugned Judgment’) by the then High

Court of Judicature at Hyderabad for the State of Telangana and the

State of Andhra Pradesh (hereinafter referred to as the ‘High Court’),

whereby the appellant/accused no.1 and accused no.3 (Mr. M Venkata

Siva Naga Prasad) were convicted, by reversing the finding of acquittal

Signature Not Verified

recorded in the Final Judgment and Order dated 07.06.2005 passed in

Digitally signed by
VARSHA MENDIRATTA
Date: 2025.07.17
16:53:04 IST
Reason:

C.C. No.17/2000 on the file of the Court of the learned Special Judge for

CBI Cases, Visakhapatnam (hereinafter referred to as the ‘Trial Court’),

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and sentenced to undergo rigorous imprisonment for a period of one

year, alongwith imposition of fine(s). Accused no.2 (Mr. N Govindarao

Naidu) passed away during the pendency of the appeal in the High Court

on 15.12.2013.

THE FACTUAL MATRIX:

2. The appellant/accused no.1 was posted as an Assistant

Administrative Officer in United India Insurance Company (hereinafter

referred to as the ‘Insurance Company’), Branch Office-II, Guntur

(hereinafter referred to as the ‘branch’), in the year 1999. His duty was,

inter alia, to assist the Branch Manager in processing of claims submitted

in the branch. Accused no.2 was posted as the Regional Manager,

Visakhapatnam Region from June-October, 1999 and it was his duty to

process claims submitted through the branches and forward it to higher

authorities for approval. The branch supra of the Insurance Company fell

under his jurisdiction. Accused no.3 is the appellant’s younger brother

and is engaged in agriculture and business.

3. Mr. L Laxman Reddy had taken a Janata Personal Accident

policy (hereinafter referred to as the ‘policy’) from the branch on

21.11.1997 for a sum of Rs.8,00,000/- (Rupees Eight Lakhs). After the

accidental death of the insured on 28.03.1999, his wife and nominee for

the policy, Mrs. Srilakshmi (PW2), submitted claim dated 05.06.1999 for

the insured sum in the branch. This claim was submitted through Mr. L
 3

Srinivasa Rao, the surveyor appointed by the branch as instructed by the

appellant. The complainant/Mr. T Kotireddy (PW1) is the maternal uncle

of Mrs. Srilakshmi and was authorized to pursue the settlement of the

claim.

4. During investigation, it emerged that Mr. L Srinivasa Rao had

submitted Investigation Report dated 13.07.1999 on the claim of PW2 to

the Manager of the branch on 20.07.1999. Thereupon, the appellant

made his recommendation on 16.08.1999 and sent the file to the Branch

Manager, who made his recommendation on 20.08.1999 and referred

the file to the Senior Divisional Manager, who in turn, on 15.09.1999,

recommended settlement of the claim and ordered to refer the file to the

Regional Office for approval. The claim was sent for settlement and

onward transmission to higher authority to the office of the accused no.2

on 18.09.1999.

5. Meanwhile, PW1 after submitting the claim met the appellant and

requested for early disposal of the claim. Such request, for early

settlement of the claim, was reiterated by PW1 when he met the

appellant once again on 15.10.1999. It is then that the appellant told him,

as the prosecution’s story goes, to arrange an amount of Rs.40,000/-

(Rupees Forty Thousand) as bribe for himself and accused no.2 for

settlement of the claim and travel with him on 17.10.1999 to Hyderabad,

where accused no.2 was available, to give him his share of the bribe.
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PW1 did not agree to pay the bribe and did not go to Hyderabad.

Thereafter, PW1 again met the appellant on 20.10.1999 when the

appellant told him that accused no.2 was still in Hyderabad and PW1

should arrange for the bribe and book two train tickets for their journey to

Hyderabad by the Narsapur-Hyderabad Express on 22.10.1999. The

appellant also told PW1 to arrange for a bottle of whisky as accused no.2

was fond of liquor. PW1 was told to convey his confirmation to the deal

in the morning of 21.10.1999.

6. PW1 gave a complaint on 21.10.1999 to Mr. N Vishnu (PW12),

Inspector of Police, Central Bureau of Investigation (hereinafter

abbreviated to ‘CBI’), Visakhapatnam, who was camping at the Railway

Retiring Room of the Vijayawada Railway Station, and on his

instructions, he purchased the tickets and called the appellant to inform

that the arrangement of money and berths in the train had been done.

The appellant was to meet PW1 near his coach at the Guntur Railway

Platform on 22.10.1999. Accordingly, PW12 secured the presence of

another CBI Inspector, Mr. S B Shanker and two independent mediators,

Mr. M Radhakrishnan and Mr. M Nagaraju (PW3), Excise Inspectors,

and along with the complainant prepared the first mediators’ report dated

22.10.1999. The report noted that the tainted currency of Rs.40,000/-

(Rupees Forty Thousand) and whisky bottle was handed over to PW12.

The numbers of each of the eighty (80) tainted notes of Rs.500

denomination and batch number of the whisky bottle was noted down.
 5

PW1 was instructed to signal by wiping his face with a handkerchief

soon after the demand and acceptance of the tainted currency and the

whisky bottle.

7. The trap party led by PW12 boarded the Narsapur Express at

Vijayawada Station. The train left the station at 10:40 pm. When the train

reached Guntur, the appellant, with accused no.3, came near S2 coach

and informed PW1 that he was unable to come to Hyderabad due to

some personal problem and, instead, the accused no.3 will accompany

PW1. The train reached Secunderabad early in the morning of

23.10.1999 and PW1 and accused no.3 checked into the Rama Krishna

Hotel. It is alleged that accused no.3 took an appointment with accused

no.2 on a call and thereafter, both left for accused no.2’s house. The trap

team followed them. On reaching the house of accused no.2, the

independent witnesses saw accused no.2 waiting outside his house.

PW1 and accused no.3 along with accused no.2 went inside the house.

Once inside, accused no.3 introduced PW1 as the party and told

accused no.2 that he had brought the bribe. Thereafter, accused no.2

sent PW1 outside the room and both these accused talked for some

time, after which accused no.3 called PW1 inside. Thereafter, PW1

requested accused no.2 for settlement of the claim to which accused

no.2 replied by stating that it would be settled without delay. Then, on

demand made by accused no.3, PW1 handed over the bribe to accused

no.3, who took out 10 tainted notes amounting to Rs.5,000/- (Rupees

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Five Thousand) and kept it in his shirt pocket and handed over the rest

of the bribe amount i.e., Rs.35,000/- (Rupees Thirty-Five Thousand) to

accused no.2, who instead of handling it, told accused no.3 to keep the

same on the teapoy. Accordingly, accused no.3 kept Rs.35,000/-

(Rupees Thirty-Five Thousand) on the teapoy. Accused no.3 also took

the whisky bottle from PW1 and placed it by the right side of the sofa on

which accused no.2 was sitting. After this, PW1 went outside and gave

the pre-arranged signal to the trap team, which rushed inside the house.

The cash from the teapoy and the shirt of accused no.3 was seized

alongwith the whisky bottle. The hands of accused no.2 were subjected

to phenolphthalein and sodium carbonate solution test and the solution

remained colourless. After this, the hands and shirt pocket of accused

no.3 were subjected to the chemical test and the resultant solution

turned pink. The numbers of the currency notes and the whisky bottle

tallied with the first mediators’ report. The white shirt worn by accused

no.3 was also seized. All of this was recorded in the second mediators’

report dated 23.10.1999.

8. On the basis of the above investigation, Crime No.RC.23(A)/99-

VSP came to be registered on 24.10.1999 under Section 120B of the

Indian Penal Code, 1860 (hereinafter referred to as the ‘IPC’) read with

Section 7 of the Prevention of Corruption Act, 1988 (hereinafter referred

to as the ‘Act’). Chargesheet was filed against the three accused on

28.06.2000 under Section 120B, IPC along with Sections 7, 11, 12, 13(2)
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read with 13(1)(d) of the Act. During trial, the prosecution examined PWs

1 to 13 and got marked Exhibits P1 to P49 and also MOs 1 to 9. The

appellant and accused no.3 did not lead any evidence in defence.

Accused no.2, on the other hand, got examined DWs 1 and 2 and got

marked Exhibits D1 to D6. After appreciation of the oral and

documentary evidence, the Trial Court found the accused not guilty of

the offences alleged and, accordingly, acquitted them of all the charges.

Aggrieved, the State went up in appeal to the High Court by filing

Criminal Appeal No.548/2006. After evaluation of the facts and evidence,

the High Court vide the Impugned Judgment allowed the appeal and

convicted the appellant and accused no.3 as under:

Position Sections Sentence

Appellant/accused Section 120B, IPC and 1 year’s rigorous
no.1 Sections 7, 13(2) read with imprisonment and fine of
13(1)(d) of the Act Rs.5,000 on three counts,
and in default of payment
of fine, additional simple
imprisonment for 2
months.
Accused no.3 Section 120B, IPC and 1 year’s rigorous
Sections 12, 13(1)(d) read imprisonment and fine of
with 13(2) of the Act read with Rs.5,000 on three counts,
Section 109, IPC and in default of payment
of fine, additional simple
imprisonment for 2
months.

9. This Impugned Judgment, as noted above, is challenged before

us.
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APPELLANT’S SUBMISSIONS:

10. Mr Jayant Bhushan, learned senior counsel, at the outset

submitted that where two views are possible on the same evidence, and

the Trial Court’s view favours the accused, the Appellate Court shall not

ordinarily interfere unless the findings are perverse or unreasonable and

based on no evidence. It was argued that, in a case of acquittal, there is

a double presumption of innocence in favour of the accused and the

High Court should have reversed the acquittal only on cogent grounds.

In the present case, the High Court erred in reversing the well-reasoned

judgment of the Trial Court, which has scrutinized all the evidence

minutely.

11. It was pointed out that the appellant made his recommendation

on the claim on 16.08.1999 itself and sent the file to the Branch

Manager, who made his recommendation on 20.08.1999 and referred

the file to the Senior Divisional Manager, who in turn, on 15.09.1999,

recommended settlement of the claim and ordered to refer the file to the

Regional Office for approval. Thus, it was submitted that there was no

occasion for the appellant to collude with accused no.2 and demand a

bribe of Rs.40,000/- (Rupees Forty Thousand), precisely for the reason

that there was lack of any official favour pending with the appellant.
 9

12. It was further submitted that the mother-in-law of PW2 had filed

O.S. No.63/1999 before the II Additional District Judge and also

preferred I.A. No.1163/1999 for restraining the Insurance Company from

disbursing the policy amount to the nominee, pending the disposal of

such suit. It was due to the order in this case that claim settlement was

delayed and not due to the alleged demand of bribe by the appellant.

13. The only circumstance to establish conspiracy between the

appellant and accused no.2 is the call made on the night of 21.10.1999.

The High Court erred in drawing an adverse inference against the

appellant for denying the call and not coming forth with the contents of

the conversation. On the other hand, the Trial Court has rightly

appreciated this circumstance in the view of the background facts and

correctly noticed that if this was the only call, then the prosecution had

failed to establish as to when the apparent quantum of the bribe was

decided between the accused. The High Court also failed to take note of

the most important fact i.e., that the appellant and accused no.2 were not

on cordial terms as the accused no.2 had transferred the appellant twice

to different offices after receiving complaint(s) against him. In such

circumstance, it is inconceivable that the two would enter into a

conspiracy, as alleged by the prosecution.

14. It was contended that the first mediators’ report noted that

phenolphthalein was only applied on the currency and not on the whisky
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box. However, surprisingly the second mediators’ report conducted after

the trap proceedings note that phenolphthalein powder was collected

from the whisky box and the chemical solution turned pink. Learned

senior counsel submitted that the High Court had given a bizarre

explanation for the same when it reasons that since PW1 first handed

over the tainted currency and then the whisky box, the powder must

have transferred from the currency onto PW1’s hand and then onto the

box.

15. During trap proceedings, the white shirt worn by the accused no.3

was seized. However, the Trial Court notes that the shirt exhibited in

evidence was not white but rather it was moss-coloured. Another bizarre

explanation, in the learned senior counsel’s opinion, that the High Court

provides, is that the white shirt seized in 1999 would have turned moss-

coloured as the colour would have withered away due to dust.

16. It was argued that there were multiple inconsistencies in the

prosecution evidence. PW3 deposed that only two people went inside

the house of accused no.2, whereas the second mediators’ report

provides that three people went inside the house. Further, there is

inconsistency in the evidence with regard to the fact as to whether

accused no.2 was watering the plants or standing at the gate, when the

accused no.3 along with PW1 approached him. Moreover, there is

material contradiction in the depositions apropos construction work going

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on in the upper portion of the house of accused no.2 on the relevant day.

PW1 was sent out by the accused present in the house after entering the

house. Some witnesses say that he came out after 2-3 minutes, whereas

others estimate the time period to be 15 minutes. Furthermore, the

second mediators’ report was prepared belatedly. It was submitted that

all these material inconsistencies and contradictions would go on to

show that the entire trap proceedings are false and concocted.

17. It was further argued that accused no.2 in his defence states that

the then Superintendent of Police (hereinafter abbreviated to ‘SP’), Mr. A

Sudhakara Rao came to his house and told him to be wise enough to

come out of the case, to which accused no.2 did not agree. This, it was

contended, is to be seen with the evidence of PW12 who had deposed to

the effect that he did not inform the SP about laying of the trap from

Hyderabad, but informed him about the same only after his return to

Visakhapatnam. This evidence is falsified by the Tour Diary of the SP

which shows that on 23.10.1999 he had reached Hyderabad and in that

whole week, only a solitary trap case was registered. This goes to

demonstrate, again, that the entire case was fabricated to falsely

implicate the accused.

18. It was contended that there are too many loose ends in the case

of the prosecution, which has miserably failed to prove the charges

alleged against the appellant. We were reminded across the bar that the
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two co-accused have passed away. The appellant is aged around 74

years and suffering from multiple ailments. In view of the above, learned

senior counsel urged us to allow the appeal and acquit the appellant.

SUBMISSIONS OF THE RESPONDENT-STATE:

19. Per contra, Mr. Vikramjit Banerjee, learned Additional Solicitor

General (hereinafter abbreviated to ‘ASG’), contended that the Trial

Court had misdirected itself in appreciating the evidence and the High

Court has considered the same in the correct perspective. The High

Court, submitted the learned ASG, has every power to re-appreciate the

evidence and facts and interfere when the Trial Court’s judgment

suffered from a perverse appreciation of the facts. It was submitted that

the Impugned Judgment is based on cogent reasoning and does not call

for any interference by this Court.

20. It was argued that the processing/clearing of the claim at the level

of the appellant before the date of demand is of no consequence, as the

demand made by the appellant was not to clear the file at his level but to

liaison with accused no.2 to get the claim settled. This has been rightly

noted by the High Court. The demand by the appellant and acceptance

of the bribe by the other accused has been proven by the testimony of

PW1, which remained unshaken in the cross-examination. The High

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Court has correctly analyzed the probative value of the evidence,

including the deposition of PW1 and has rightly convicted the appellant.

Reliance was placed on D Velayutham v State, (2015) 12 SCC 348 to

argue that the Court has, previously, taken note of the byzantine

methods of bribe-taking, and where an evader escapes a trap,

constructive receipt has to be an alternate means of fastening criminal

culpability.

21. It was contended that the injunction order passed in O.S.

No.63/1999 was only with respect to disbursal of the amount. It should

be noted that despite the injunction, the Assistant Divisional Manager

and the Senior Divisional Manager approved the claim and forwarded

the file to the accused no.2 for settlement of the claim, subject to

judgment in the case. PW5 has deposed that accused no.2 instructed

him to keep the file pending. Further, there was no noting in the file to

the effect that it is pending due to vigilance enquiry.

22. Learned ASG further submitted that the appellant and accused

no.2 were on cordial terms, as evident from the phone call made on

21.10.1999. This is also clear from the fact that even after receiving

corruption complaint against the appellant, accused no.2 transferred the

appellant locally in Guntur. Hence, it is clear that the transfer(s) were

done only as a formality. Another crucial fact noted by the High Court is
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the call made by accused no.3 to accused no.2 on the morning of

23.10.1999 to take an appointment. This call has been proved through

oral and documentary evidence and clinches that a conspiracy was

hatched.

23. It was further contended that minor inconsistencies in the

evidence of the witnesses is natural and should be ignored by this Court.

On principally these grounds, learned ASG urged us to dismiss the

appeal and uphold the conviction.

ANALYSIS, REASONING AND CONCLUSION:

24. We have heard the learned senior counsel for the appellant and

learned ASG for the State, considered their submissions and perused

the material on record. We have bestowed anxious consideration to the

issues involved. It is imperative to, at the outset, note that there are

multiple contested facts apropos the demand-and-trap proceedings and

given that there are divergent opinions expressed by the Courts below, it

is all the more appropriate to analyze and appraise the evidence

adduced. We may gainfully refer to the discussion by a 5-Judge Bench in

Neeraj Dutta v State (NCT of Delhi), (2023) 4 SCC 731 with regard to

the evidentiary standard to prove offence(s) under the concerned

provisions of the Act:

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‘88. What emerges from the aforesaid discussion is

summarised as under:
88.1. (a) Proof of demand and acceptance of illegal
gratification by a public servant as a fact in issue by
the prosecution is a sine qua non in order to establish
the guilt of the accused public servant under Sections
7 and 13(1)(d)(i) and (ii) of the Act.
88.2. (b) In order to bring home the guilt of the
accused, the prosecution has to first prove the
demand of illegal gratification and the subsequent
acceptance as a matter of fact. This fact in issue can
be proved either by direct evidence which can be in
the nature of oral evidence or documentary evidence.
88.3. (c) Further, the fact in issue, namely, the proof of
demand and acceptance of illegal gratification can
also be proved by circumstantial evidence in the
absence of direct oral and documentary evidence.
88.4. (d) In order to prove the fact in issue, namely,
the demand and acceptance of illegal gratification by
the public servant, the following aspects have to be
borne in mind:
(i) if there is an offer to pay by the bribegiver without
there being any demand from the public servant and
the latter simply accepts the offer and receives the
illegal gratification, it is a case of acceptance as per
Section 7 of the Act. In such a case, there need not be
a prior demand by the public servant.
(ii) On the other hand, if the public servant makes a
demand and the bribe-giver accepts the demand and
tenders the demanded gratification which in turn is
received by the public servant, it is a case of
obtainment. In the case of obtainment, the prior
demand for illegal gratification emanates from the
public servant. This is an offence under Sections 13(1)
(d)(i) and (ii) of the Act.
(iii) In both cases of (i) and (ii) above, the offer by the
bribe-giver and the demand by the public servant
respectively have to be proved by the prosecution as a
fact in issue. In other words, mere acceptance or
receipt of an illegal gratification without anything more
would not make it an offence under Section 7 or
Sections 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 servant which would make it an offence.
 16

Similarly, a prior demand by the public servant when

accepted by the bribe-giver and in turn there is a
payment made which is received by the public
servant, would be an offence of obtainment under
Sections 13(1)(d)(i) and (ii) of the Act.
88.5. (e) The presumption of fact with regard to the
demand and acceptance or obtainment of an illegal
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 stands.
88.6. (f) In the event the complainant turns “hostile”,
or has died or is unavailable to let in his evidence
during trial, demand of illegal gratification can be
proved by letting in the evidence of any other witness
who can again let in evidence, either orally or by
documentary evidence or the prosecution can prove
the case by circumstantial evidence. The trial does
not abate nor does it result in an order of acquittal of
the accused public servant.
88.7. (g) Insofar as Section 7 of the Act is concerned,
on the proof of the facts in issue, Section 20 mandates
the court to raise a presumption that the illegal
gratification was for the purpose of a motive or reward
as mentioned in the said Section. The said
presumption has to be raised by the court as a legal
presumption or a presumption in law. Of course, the
said presumption is also subject to rebuttal. Section 20
does not apply to Sections 13(1)(d)(i) and (ii) of the
Act.
88.8. (h) We clarify that the presumption in law under
Section 20 of the Act is distinct from presumption of
fact referred to above in sub-para 88.5(e), above, as
the former is a mandatory presumption while the latter
is discretionary in nature.’

25. Keeping in mind the aforesaid decision, we turn to the evidence

on record. On the point of demand of bribe by the appellant, the Trial

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Court opined that the appellant and other officers of the Branch Office

had already approved the claim file and referred the file to the Regional

Office for its approval on 15.09.1999 and thus, there was no occasion for

the appellant to demand the bribe. The High Court, on the other hand,

has observed that the demand was made to liaison with the accused

no.2. To drive home the act of liaison, it was alleged by the prosecution,

and accepted by the High Court, that since the bribe was not paid by

PW1, the claim file was kept pending in the Regional Office by accused

no.2.

26. PW1 has spoken of the demand made by the appellant, wherein

he is stated to have specifically demanded Rs. 40,000/- (Rupees Forty

Thousand) i.e., 5% of the claim amount to be shared between himself

and accused no.2, failing which, the claim will not be cleared. The

prosecution would contend that it is apparent then, that the demand, if so

made by the appellant, was clearly to liaison and the fact that the claim

was cleared at the Branch Office cannot be used to discard the theory of

demand. Having said so, this sole circumstance, as we later discuss,

cannot by itself prove the factum of demand having been made by the

appellant.

27. In order to present proof of criminal conspiracy between the

appellant and accused no.2, the prosecution had placed reliance on the
 18

call made between them on 21.10.1999 at 21:45 hours. The Trial Court

disbelieved the criminal conspiracy on the ground that if this was the only

circumstance of conspiracy, then it was not proved as to when the

accused had arrived at an understanding on the quantum of the bribe,

which had been demanded earlier on 15.10.1999. The High Court, on

the other hand, has preferred to take a more plausible view insofar as it

states that it is not the prosecution’s case that this call was the first

instance for fixation of the bribe. However, the High Court then goes on

to draw an adverse inference against the accused for not divulging the

contents of the conversation holding the call to be a conspiratorial talk,

which, in our view, ought not to have been done, as the reasoning for the

same is based on shaky ground. The High Court’s analysis of the call

reads thus:

‘20) Another instance which clinches the conspiracy

between AO1 and AO2, is the telephonic call made by
AO1 on the night of 21.10.1999 from his residence
telephone. PW9, the Chief Accounts Officer of
Telecom Department, Guntur provided the particulars
of the out going calls from the telephone to phone
No.358621 belonging to AO1 under Ex.P36. Ex.P37 is
the covering letter for Ex.P36. As per Ex.P36A entry, a
phone call was made from this telephone No.7745462
which admittedly belonging to AO2 on the night of
21.10.1999 at 21.39 hours. In the cross-examination
of PW9 except denying that Ex.P36 particulars are not
correct and unauthenticated nothing was brought on
record to disprove the authencity of call particulars
furnished by a responsible officer like PW9. Therefore,
there is no reason to disbelieve Ex.P36A call
particulars which would show that on the crucial date
i.e. one day prior to the proposed visit of AO1 and
PW1 to AO2 at Hyderabad, AO1 made a call to AO2. If
AO1 and AO2 were not in good terms, there was no
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occasion for AO1 to make a call to AO2 that too when

he was on leave and stayed in his house at
Secunderabad. When we believe that the aforesaid
call was made by AO1 to AO2 the logical conclusion is
that AO1 owed a responsibility to divulge as to the
reason for his calling AO2. As already stated supra, he
was totally denying the authenticity of Ex.P36 and
specifically Ex.P36A calls. It could have been a
different thing had he admitted that he made a phone
call to AO2 and gave a reason for calling. In such
circumstances, the authenticity of his explanation
would have been discussed and decided. On the other
hand, he simply denied the authenticity of Ex.P36 and
P36A. As already held, the authenticity of Ex.P36
cannot be doubted in view of evidence of PW9. It
confirms that AO1 indeed made a phone call to AO2.
His flat denial of making phone call on the pretext of
inauthenticity of Ex.P36 prompts me to draw an
adverse inference against him to the effect that the
phone call was nothing but part of conspiratorial talk
between AO1 and AO2. In my esteem, this phone call
and another phone call made by A3 to AO2 about
which I will discuss at the relevant part of the
judgment, are the crucial pieces of evidence which
fortify the prosecution case on one hand and blast
away the defence of all the accused. Unfortunately the
trial Court, it must be said, on a perverse appreciation,
has discarded the aforesaid valuable piece of
evidence. For discarding such a valuable piece of
evidence covered by above two phone calls, the trial
Court did not make a logical analysis basing on the
facts, evidence and circumstances but came to
slipshod conclusion. It is pertinent to narrate its
conclusion covered by para-26 of the judgment which
reads thus:
“Para 26: Even with regard to the telephone
calls allegedly made to A2 by A3, there is
absolutely no dependable evidence as to who
actually spoke those calls and as to what was
that conversation. The same is the result of
the analysis with regard to the telephone call
allegedly made by A1 to A2 in the night of
21.10.1999.”
With regard to phone call made by A3 to AO2 and the
perversity of finding of trial Court I will discuss later.
 20

a) Sofaras first phone call made by AO1 to AO2 is

concerned, from the above observation of the trial
Court what we can understand is it disbelieved the
said phone call on the ground that there is no
dependable evidence about phone call and it is not
known who actually spoke and what was the nature of
conversation. This observation is quite inappreciable.
Dependability of evidence is concerned, a responsible
officer of calibre of PW9 avouched authenticity of
Ex.P36 and P36A call data particulars. The trial Court
did not give any plausible reason for not accepting his
evidence. So, the dependability of Ex.P36 and P36A is
not a question at all. Then, the question of who spoke
is concerned, there can be no doubt because the call
was emanated from the residential telephone of AO1
and not from a public booth or from some other
telephone. The recipient of the call being the higher
officer of AO1 none else than AO1 must have talked to
AO2. It is true that the Court has no benefit of
conversion between AO1 and AO2. However, as
already observed supra, from the flat denial of every
thing by AO1 the adverse inference can be drawn that
they must have talked about the proposed visit of AO1
and PW1 to the residence of AO2. It must be noted
that the trial Court gave illogical reasoning to hold that
the conversion between AO1 and AO2 even if believed
must not be in connection with the claim of PW2 and
bribe etc. The trial Court observed that if the said
phone call is accepted as the proof for the alleged
criminal conspiracy between AO1 and AO2 to come to
a common understanding regarding quantum of bribe
of Rs.40,000/- how come that on that day morning
itself PW1 could already mention the said amount as
demanded by AO1 in Ex.P4— complainant and held
that there was no conspiracy at all. It must be noted
that it is not the case of the prosecution that through
this phone call only, AO1 and AO2 for the first time
conspired and fixed the bribe amount. They might
have discussed about their conspiracy and fixed the
bribe amount through another phone call by a different
phone number. What the prosecution intended to
establish is that the phone call in Ex.P36A is a part of
their conspiracy but not the first one for fixation of
bribe amount. Hence, the above circumstances clearly
establish the conspiracy between AO1 and AO2.’
(sic)
 21

(emphasis supplied)

28. From the above extract, rather portions thereof, it is quite clear

that the High Court itself has relied on inferences and conjectures alone.

Even if the factum of phone call, as alleged, having been made stands

accepted, it is clear that the contents of the conversation are not

available at all. That aside, surely the protection of Article 20(3) of the

Constitution of India, 1950 (hereinafter referred to as the ‘Constitution’)

would apply and the appellant could not be compelled to disclose the

nature and content of the conversation, assuming it happened. In this

background, much has also been said about the nature of the

relationship between the appellant and the accused no.2. The

prosecution has strived to prove that they shared a cordial relationship

while the defence has argued that there was antagonism between them

in view of the orders passed by accused no.2 transferring the appellant

twice. At this juncture, it is pertinent to note that one Mr. K Venkata

Reddy, stating to be a close friend of Mr. L Laxman Reddy (PW2’s

deceased-husband) had written a letter dated 04.08.1999 to accused

no.2 informing him that the appellant is demanding a bribe to settle

PW2’s claim and requested for settlement of the claim as also suitable

action against the appellant. This letter was forwarded by accused no.2

to Mr. K N Rasool (Vigilance Officer) for investigation which is apparent

from letter dated 11.08.1999 sent by Mr. Rasool to the Head Office,
 22

Vigilance Department informing them about the complaint(s) received

against the appellant. Thereafter, accused no.2 passed an Office Order

dated 12.08.1999 transferring the appellant to the Divisional Office,

Guntur. Subsequently, through another Office Order dated 07.10.1999,

accused no.2, again, transferred the appellant to the Branch Office,

Guntur. The High Court has termed the transfer orders as a fleabite in

view of the transfers being made locally. No doubt, it is true that accused

no.2 could have imposed harsher punishment/posting to the appellant

and even assuming, for the sake of argument, that the two shared a

cordial relationship, we are unable to persuade ourselves to the ultimate

conclusion drawn by the High Court in this regard especially in view of

the fact that it was accused no.2 himself who had forwarded the

complaint against the appellant to the Vigilance Officer. Being so, it

would militate against normal human conduct besides being extremely

unwise and illogical, for accused no.2 to enter into a conspiracy with the

very appellant, against whom he had complained to the Vigilance Officer,

just a month later, being acutely aware of the scrutiny placed on the

appellant by Mr. Rasool/the Vigilance Department and the ongoing

investigation.

29. The prosecution further alleged that since the bribe was not paid

by PW1, the claim file was kept pending in the Regional Office by

accused no.2. The Trial Court attributed the delay in clearing of the file
 23

by the Regional Office to the injunction order dated 18.08.1999 passed

in O.S. No.63/1999 filed by PW2’s mother-in-law. However, as rightly

taken note of by the High Court, the injunction was only with regards to

disbursing the policy amount and not on settling the claim filed by PW2.

This is why, despite the injunction order, multiple officers in the Branch

Office approved the claim and sent it to higher authorities for approval.

The delay, therefore, cannot be attributed to the injunction order. The

High Court has placed reliance on the testimony of PW5/Assistant

General Manager, Regional Office, to hold that accused no.2 indeed

kept the file pending as per the pre-arrangement between the accused

persons. It has come in, by way of PW5’s deposition, that if a complaint

is received in respect of any file and the same is referred to the Vigilance

Department, then the file will not be processed till instructions are

received therefrom. On 04.10.1999, accused no.2 told PW5 to keep the

file pending at his level but did not disclose any reason for the same. By

this time, accused no.2 had already forwarded complaint dated

04.08.1999 to the Vigilance Officer and was aware of the pending

vigilance inquiry in respect of the claim, therefore, it was incumbent on

him to keep the file pending. However, he had to make an endorsement

of this fact on the file which he failed to do. This conduct on his part

raises some suspicion, however, we have some hesitation in accepting

the theory of demand for the reason already noted supra, viz. that

accused no.2 was well-aware of the vigilance inquiry against the

 24

appellant. In this scenario, it is not reasonably conceivable to believe that

he would be audacious enough to hatch a conspiracy with the appellant.

More importantly, after the file was dealt with by the appellant, he stood

transferred to the Divisional Office on 12.08.1999 and then back to the

Branch Office on 07.10.1999. By such time, the file in question had

moved to the Regional Office, Vishakhapatnam where accused no.2 was

posted. PW1-Complainant could not have been unaware of the fact that

a close friend of the deceased had already written a letter on 04.08.1999

to accused no.2 complaining that the appellant was demanding a bribe

to settle the claim and had also sought suitable action against him, which

had resulted in the appellant’s transfer from the Branch Office to the

Divisional Office, with the file being referred to the Vigilance Department.

Therefore, it does not stand to reason as to why he would approach the

same officer and agree to offer him bribe and further, that the appellant

would agree to act as a liaison between PW1 and accused no.2 in

respect of the same claim. Hence, as the facts reveal themselves to us,

the allegation of demand of bribe, as projected by the prosecution, is

shrouded in a cloud of dubiety. Nevertheless, arguendo, taking the

allegation of the demand of bribe to be proved, even if we proceed to

analyze the evidence put forth in support of the subsequent trap and

post-trap proceedings, it would not be possible for this Court to sustain

the Impugned Judgment.

 25

30. We may take note that the Trial Court has pointed out several

contradictions and inconsistencies in the prosecution evidence which,

inter alia, relate to: i) placement of the whisky bottle in the house of

accused no.2; ii) number of people that went inside the house of

accused no.2; iii) accused no.2 watering the plants when accused no.3

and PW1 reached his house; iv) presence of labourers and ongoing

construction work in the upper portion of the house of accused no.2, and;

v) time-gap after which PW1 first came out of the house of accused no.2.

We do not wish to dwell upon these aspects elaborately as in light of our

eventual conclusion, we feel they are minor which are natural in the

usual course of progression of a trial and more importantly as ultimately,

for reasons below, we are unable to concur with the view taken by the

High Court holding the demand and acceptance of the bribe as proved.

31. We say so, in view of three glaring contradictions in the

prosecution evidence which cumulatively shake the foundations of the

prosecution case and render its death knell. Firstly, the foremost aspect

is the presence and participation of the SP/Mr. A Sudhakara Rao in the

trap proceedings. This is all the more relevant in view of the specific

defence raised by accused no.2 that the SP during the trap gave a sly

hint that there is no case against him given that he is wise enough to

come out of the case, which is also spoken of by DW2 (accused no.2’s

wife). It is his stand, that on his refusal, he has been falsely implicated in
 26

the case. Interestingly, PW12 has stated that he did not inform the SP

about the laying of the trap from Hyderabad, but only after his return to

Visakhapatnam, he informed the SP. Neither the prosecution witnesses

nor any documentary evidence prepared during the trap proceedings

record/indicate the presence of the SP and/or his participation in the trap

proceedings. But on the other hand, the tour diary of the SP duly signed

by him, shows that on 23.10.1999, the day of the trap, he reached

Hyderabad from Chennai and participated in a trap. It further shows that

during the week commencing from 18.10.1999 to 24.10.1999, there was

only one trap case registered i.e., RC 23(A)/99 which relates to the

present case. This unimpeachable document, therefore, conclusively

falsifies the PW12’s evidence and raises serious doubts on the veracity

of the trap proceedings. It speaks volumes that no prosecution witness,

including PW12, indicated the presence of the SP. The justification

provided by the prosecution that the SP came to Hyderabad to attend a

meeting at the regional headquarters with the Deputy Inspector-General

of Police is negated by the tour diary which speaks of no such meetings

and provides in unambiguous terms that the SP ‘reached Hyderabad and

participated in trap and started Hyderabad to Vishakhapatnam’.

32. Secondly, prosecution witnesses have deposed to the effect that

accused no.3 was wearing a white shirt with stripes. It is further their

case that the shirt pocket was dipped in the chemical solution which
 27

turned pink and thereafter the white shirt was seized. Bizarrely enough,

the shirt produced before the Trial Court was a green/moss-coloured

shirt with stripes. The Trial Court after having seen the material object,

i.e., the ‘white’ shirt has reached the conclusion that by no stretch of

imagination can the shirt produced qualify to be a ‘white’ shirt. The High

Court has taken a view that since the ‘white’ shirt was seized in 1999,

due to the efflux of time, its white colour would have withered away due

to dust. We are quite dumb-founded by the explanation offered by the

High Court, to fill in a glaring gap in the prosecution case, which is

beyond comprehension. The High Court should not have made such an

incredulous and irrational leap, only to find some semblance of logic. It is

to be kept in mind that during trial, material objects are exhibited and the

Trial Court has the visual benefit of perceiving the material object’s

physical characteristics. The Trial Court, thus, has the advantage of

direct examination, which may not be available to the appellate courts,

who, more often than not, only have the benefit of testimonies or

photographs. In such scenario, it was incumbent on the High Court to

have either summoned the material object for examination by itself, in

exercise of powers under Section 91 of the Code of Criminal Procedure,

1973 (hereinafter referred to as ‘CrPC’) or to have accepted the view of

the Trial Court which discerned that the shirt exhibited was a moss-

coloured shirt and not white-coloured. There is also a sea of difference

between a moss-coloured shirt and the yellowish/brownish tinge that is

 28

accumulated due to disuse and withering of the colour of a white shirt

due to passage of time. While these may appear trivial to the layman at

first blush, the Courts of law dealing with life and liberty cannot ever be

too careful. The High Court ought not to have proceeded with such lack

of care in simply accepting the explanation proffered by the prosecution.

33. Lastly, we find from the second mediators’ report and the

evidence of the prosecution witnesses, that a cotton swab was used to

collect the phenolphthalein powder from the surface of the cardboard

box of the whisky bottle and the same on being subjected to chemical

test yielded positive result. Curiously, the first mediators’ report which

was prepared before the trap does not mention that any phenolphthalein

powder was applied to the cardboard box or the whisky bottle. In such

circumstances, it is doubtful how the phenolphthalein powder was

recovered from the surface of the cardboard box in the first place. The

High Court has reasoned that since PW1 first handed over the tainted

cash to accused no.3 and thereafter handled the whisky box, the

phenolphthalein powder must have transferred from his hands to the

whisky box. We are afraid that such reasoning is based on conjectural

assumptions alone, while hastening to add that we should not be

understood as saying that transfer of phenolphthalein powder from the

tainted cash to the hands of PW1 and thereafter from his hands to

cardboard box is not possible at all. It may have been possible but to
 29

presume such fact in a criminal trial, having severe eventual penal

consequences, is something that we express our clear reservation on. In

fact, this is also indicative of the lack of care with which the High Court

proceeded. The High Court misdirected itself in engaging deeply with the

minor inconsistencies, while not providing sufficient reasoning for

accepting the most glaring and obvious contradictions in the

prosecution’s case.

34. In a case of such nature, where the accused persons have been

acquitted by the Trial Court, there is a double presumption of innocence

which accrues in their favour. Reference may be made to Jafarudheen

v State of Kerala, (2022) 8 SCC 440 which observed:

‘25. While dealing with an appeal against acquittal by

invoking Section 378 CrPC, the appellate court has to
consider whether the trial court's view can be termed
as a possible one, particularly when evidence on
record has been analysed. The reason is that an order
of acquittal adds up to the presumption of innocence
in favour of the accused. Thus, the appellate court has
to be relatively slow in reversing the order of the trial
court rendering acquittal. Therefore, the presumption
in favour of the accused does not get weakened but
only strengthened. Such a double presumption that
enures in favour of the accused has to be disturbed
only by thorough scrutiny on the accepted legal
parameters.’
(emphasis supplied)

35. Hence, it was all the more important for the High Court to have

provided cogent reasoning for disturbing the finding of acquittal recorded

 30

by the Trial Court. Unfortunately, the Impugned Judgment does not

sufficiently address the weakest links in the prosecution version,

necessitating interference by this Court.

36. Even if we take the prosecution case at its highest, ignoring the

chinks in its armour, it can, at best, be said that it is a case where two

views are possible. When faced with this situation, the view of this Court

has been only one – where two views are possible, the Court should err

on the side of caution and lean in favour of the defence, as held in

Suresh Thipmppa Shetty v State of Maharashtra, 2023 SCC OnLine

1038 in the following terms:

‘18. On a deeper and fundamental level, when this

Court is confronted with a situation where it has to
ponder whether to lean with the Prosecution or the
Defence, in the face of reasonable doubt as to the
version put forth by the Prosecution, this Court will, as
a matter of course and of choice, in line with judicial
discretion, lean in favour of the Defence. We have
borne in mind the cardinal principle that life and liberty
are not matters to be trifled with, and a conviction can
only be sustained in the absence of reasonable doubt.
The presumption of innocence in favour of the
accused and insistence on the Prosecution to prove its
case beyond reasonable doubt are not empty
formalities. Rather, their origin is traceable to
Articles 21 and 14 of the Constitution of India. Of
course, for certain offences, the law seeks to place a
reverse onus on the accused to prove his/her
innocence, but that does not impact adversely the
innocent-till-proven-guilty rule for other criminal
offences.’
(emphasis supplied)
 31

37. In fine, even if it is accepted that the appellant and accused no.2

had a close relationship and the so-called action of transfer of the

appellant by accused no.2 was cosmetic in nature, this would not obviate

the requirement of proving the factum of demand being made by the

appellant for himself and also on behalf of accused no.2 for approval of

the amount to be paid to the policy-claimant. Moreover, if the appellant

was demanding Rs. 40,000/- (Rupees Forty Thousand) from PW1 as

bribe, the division being Rs.5,000/- (Rupees Five Thousand) for himself

and Rs.35,000/- (Rupees Thirty-Five Thousand) for accused no.2, it

does not stand to reason as to why the appellant would not keep his

share of Rs.5,000/- (Rupees Five Thousand) in Vijayawada itself and

then send the remaining Rs.35,000/- (Rupees Thirty-Five Thousand) to

accused no.2 or even keep the entire sum of Rs.35,000/- (Rupees

Thirty-Five Thousand) meant for accused no.2 with himself. There may

also be an indication that accused no.3 had taken out Rs.5,000/-

(Rupees Five Thousand) from the Rs.40,000/- (Rupees Forty Thousand)

given by PW1 and kept it in his pocket and passed on the remaining

Rs.35,000/- (Rupees Thirty-Five Thousand) to accused no.2 meaning

thereby, at best and presuming for argument’s sake, it was a deal

between PW2, accused no.2 and accused no.3. The mere fact that

accused no.3 is the appellant’s brother would not lead to a presumption

in law that the money taken by him was meant for the appellant and that

too, pursuant to demand being made by the appellant. It would also be

 32

important to take note of the fact that except for PW1-Complainant, no

other witness/person was privy to the demand made to the complainant

by the appellant. This does not satisfy the requirement that in trap cases

where after a complaint is received, independent witnesses of the trap

team are also required to confirm the demand made by the accused

personally, which has not been done in the present case. Thus, the

procedure of the trap case itself from the very inceptual stage suffers

from serious legal lacuna, which cannot be now overcome. For, the

purpose of this requirement is that before the trap is set into motion,

there should be corroboration of the allegation made by the complainant

of actual and real demand being made by the accused-public servant as

a quid pro quo for extending a favour to the complainant. On to the next

stage of actual laying of trap, there also the appellant was nowhere in

the picture. The prosecution’s effort of still trying to bring him under the

ambit and scope of the corruption net clearly has not succeeded in the

circumstances.

38. Having analysed the evidence threadbare and considered the

entire evidential gamut, we find that the prosecution has not proved

beyond reasonable doubt the demand of and acceptance of the bribe in

the trap laid by PW12. This is, to be charitable to the investigative

agency, at best a case of a botched-up trap with serious lapses

committed by the investigative agency. The role of the SP and PW12

 33

also calls for a detailed look, but in view of the fact that they are not

before us, we refrain from further comment. At its worst, this case is an

example of fabrication and attempted frame-up. Whatever be the truth of

the matter, the fact remains that in either scenario, benefit of doubt has

to flow to the appellant. It would be unsafe to uphold the conviction of the

appellant in any view of the matter. In view of our foregoing discussion,

we set aside the Impugned Judgment and restore the Judgment and

Order of the Trial Court.

39. Accordingly, the appeal is allowed. The appellant is acquitted of

all charges relating to this case. The appellant is entitled to refund of the

fine amount, if any deposited, in pursuance of the Impugned Judgment.

.………………..................…..J.
[PANKAJ MITHAL]

………………....................…..J.
[AHSANUDDIN AMANULLAH]
NEW DELHI
JULY 17, 2025