# The State of Bombay v. Saubhagchand M. Do1hl Venkataramtt

- **Citation:** [1958] 1 S.C.R. 580
- **Court:** Supreme Court of India
- **Decided:** 1955-09-06
- **Case number:** Criminal Appeal No. 5 of 1957
- **Bench:** B. P. Sinha, Govinda Menon, J. L. Kapur
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/the-state-of-bombay-v-saubhagchand-m-do1hl-venkataramtt-1400
- **Pages:** 15

## Headnote

Appeal by special /eave-Order of acquittal by the High CourtPower of Supreme Court-Presumption-Prevention of Corruption
Act. (II of 1947), s. 4-Constitution of India, Art. 136.
Respondent, an Income-tax Officer, called an assessee to his
house and took a sum of Rs. 800 from him. Immediately afterwards a search was made and the respondent, after some evasion
produced the money. The respondent's defence was that he had
taken the money as a loan and not as illegal gratification. The
Special Judge who tried the respondent found him guilty under
s. 161, Indian Penal Code, and sentenced him to six months simple
imprisonment. On appeal, the High Court acquitted the respond-
'
ent. The State obtaine.d special leave and appealed.
Held, that the words used ·in Art. 136 of the Constitution
show that in criminal matters no distinction can be made as
a
matter of construction between a judgment of conviction and one
of acquittal. The Supreme Court till not readily interfere with
the findings of fact given by the High Court but if the High Court
(t) A.I.R. (1954) S.C. 680.
S.C.R.
SUPREME COURT REPORTS
581
acts perversely or otherwise improperly interference will be
19.57
called for.
·
The finwngs of the High Court are halting and its approach
to the case has been erroneous as it disregarded the special rule
The State of
Madras
of burden of proof under s. 4 of the Prevention of Corruption Act
(II of 1947). The judgment of the High Court shows that certain
salient pieces of evidence were missed or were not
properly
appreciated.
In this situation the Supreme Court can interfere· in an
appeal by special leave.
Where it is proved that a gratification has been accepted, the
presumption under s. 4 of the Prevention of Corruption Act shall
at once arise. It is a presumption of law .and it is obligatory on
the Col!rt to raise it in every case brought under s. 4.
The evidence and circumstances in this case lead to the
conclusion that the transaction was not one of loan but of illegal .
gratification.
CRIMINAL
APPELLATE
JURISDICTION : Criminal
Appeal No. 5 of 1957.
Appeal by special . leave from the judgment
and
order dated the 6th September, 1955, of the Madras
High Court in Criminal Appeat No. 498 of 1954 and
Criminal Revision Case No. 257of1955, arising out of
the judgment and order dated the· 12th July, 1954 of
the Special Judge, Coimbatore in C.C. No. 1 of 1952.
H.J. Umrigaer, H. R. Khanna and R. H. Dhebar, for
the appellants.
·
K. S. Krishnaswamy Iyengar and Sardar Bahadur,
for the respondent.
1957. September 26. The following Judgment of
the Court was delivered by
KAPUR J.-This is an appeal by the State of Madras
from the judgment and order of the High C:ourt of -
Madras reversing the judgment of the Special Judge
of Coimbatore and thereby acquitting the respondent
who had been convicted of an offence under s. 161
Indian Penal Code and sentenced to six months simple
imprisonment.
The respondent, Vaidyanatha Aiyer, was at all
material times the Income-tax Officer of Coimbatore
and it is not disputed that he was there in the beginning
v.
A. Valdyanatha
Tyer
KapurJ.
1957
Tht Srate of
Madras
v,
A. Vaidyanalha
Iyer
Kapur
J.
582
SUPREME COURT REPORTS
[1958]
of June 1951. According to
the prosecution the
respondent in the end of September 1951 demanded
from K. S. Narayana Iyer (hereinafter referred to as the
complainant) who is a proprietor of a "Coffee Hotel"
called Nehru Cafe in Coimbatore with another similar
hotel at Bhavanisagar a bribe of Rs. 1,000.
The complainant had been assessed to income-tax
all along ~ince 1942. During the course of assessment
for the year 1950-51 it was discovered that he had
failed to pay advance income-tax. A notice was therefore issued to him on March 24, 1951 under s. 28 read
with s. 18-A(2) of the Income-tax Act to show cause
why
a penalty should not be imposed for underestimating his income. For the assessment year 195152 also the complainant in the usual course filed his
return on August 11, 1951 and on a notice be

## Text

1957
The State of
Bombay
v.
Saubhagchand
M. Do1hl
Venkataramtt
Alyar J.
1957
580
SUPREME
COURJ REPORTS
[1958]
Junagadh, the age of superannuation was 60, that
art. XVI of the Instrument of Accession provided that
the permanent members of the public services in the
several States should be continued on conditions not
less advantageous than those on which they were
holding office at the· date of accession, and that under
this Covenant, the respondent was entitled to continue
until he attained the age of 60. The decision in
Bholanath J. Thaker v. State of Saurashtra(') was
relied on in support of this position. But no such
claim was put forward in the writ petition, and it is
now too late to raise it.
In the result, the appeal is allowed, the order of the
lower Court is set aside, and the petition of the res-
. pondent is dismissed. The parties will bear their own
costs throughout.
Appeal allowed.
THE STATE OF MADRAS
v.
September 26
A. VAIDYANATHA IYER
(B. P. SINHA, GOVINDA MENON and J. L. KAPUR, JJ.)
Appeal by special /eave-Order of acquittal by the High CourtPower of Supreme Court-Presumption-Prevention of Corruption
Act. (II of 1947), s. 4-Constitution of India, Art. 136.
Respondent, an Income-tax Officer, called an assessee to his
house and took a sum of Rs. 800 from him. Immediately afterwards a search was made and the respondent, after some evasion
produced the money. The respondent's defence was that he had
taken the money as a loan and not as illegal gratification. The
Special Judge who tried the respondent found him guilty under
s. 161, Indian Penal Code, and sentenced him to six months simple
imprisonment. On appeal, the High Court acquitted the respond-
'
ent. The State obtaine.d special leave and appealed.
Held, that the words used ·in Art. 136 of the Constitution
show that in criminal matters no distinction can be made as
a
matter of construction between a judgment of conviction and one
of acquittal. The Supreme Court till not readily interfere with
the findings of fact given by the High Court but if the High Court
(t) A.I.R. (1954) S.C. 680.
S.C.R.
SUPREME COURT REPORTS
581
acts perversely or otherwise improperly interference will be
19.57
called for.
·
The finwngs of the High Court are halting and its approach
to the case has been erroneous as it disregarded the special rule
The State of
Madras
of burden of proof under s. 4 of the Prevention of Corruption Act
(II of 1947). The judgment of the High Court shows that certain
salient pieces of evidence were missed or were not
properly
appreciated.
In this situation the Supreme Court can interfere· in an
appeal by special leave.
Where it is proved that a gratification has been accepted, the
presumption under s. 4 of the Prevention of Corruption Act shall
at once arise. It is a presumption of law .and it is obligatory on
the Col!rt to raise it in every case brought under s. 4.
The evidence and circumstances in this case lead to the
conclusion that the transaction was not one of loan but of illegal .
gratification.
CRIMINAL
APPELLATE
JURISDICTION : Criminal
Appeal No. 5 of 1957.
Appeal by special . leave from the judgment
and
order dated the 6th September, 1955, of the Madras
High Court in Criminal Appeat No. 498 of 1954 and
Criminal Revision Case No. 257of1955, arising out of
the judgment and order dated the· 12th July, 1954 of
the Special Judge, Coimbatore in C.C. No. 1 of 1952.
H.J. Umrigaer, H. R. Khanna and R. H. Dhebar, for
the appellants.
·
K. S. Krishnaswamy Iyengar and Sardar Bahadur,
for the respondent.
1957. September 26. The following Judgment of
the Court was delivered by
KAPUR J.-This is an appeal by the State of Madras
from the judgment and order of the High C:ourt of -
Madras reversing the judgment of the Special Judge
of Coimbatore and thereby acquitting the respondent
who had been convicted of an offence under s. 161
Indian Penal Code and sentenced to six months simple
imprisonment.
The respondent, Vaidyanatha Aiyer, was at all
material times the Income-tax Officer of Coimbatore
and it is not disputed that he was there in the beginning
v.
A. Valdyanatha
Tyer
KapurJ.
1957
Tht Srate of
Madras
v,
A. Vaidyanalha
Iyer
Kapur
J.
582
SUPREME COURT REPORTS
[1958]
of June 1951. According to
the prosecution the
respondent in the end of September 1951 demanded
from K. S. Narayana Iyer (hereinafter referred to as the
complainant) who is a proprietor of a "Coffee Hotel"
called Nehru Cafe in Coimbatore with another similar
hotel at Bhavanisagar a bribe of Rs. 1,000.
The complainant had been assessed to income-tax
all along ~ince 1942. During the course of assessment
for the year 1950-51 it was discovered that he had
failed to pay advance income-tax. A notice was therefore issued to him on March 24, 1951 under s. 28 read
with s. 18-A(2) of the Income-tax Act to show cause
why
a penalty should not be imposed for underestimating his income. For the assessment year 195152 also the complainant in the usual course filed his
return on August 11, 1951 and on a notice being issued
to him produced his accounts before the Income-tax
Officer on September 27, 1951. He again appeared
before him on the 28th and the respondent told him
that the "penalty papers had not been disposed of and
that the accounts of the current year had also not
been gone through" and asked the complainant to see
him at his house on .the following morning, which the
complainant did. There he was told by the respondent that if he wanted to have his return accepted and
to be helped in the matter of penalty proceedings he
should pay the respondent Rs. 1,000 as illegal gratification. The complainant mentioned this fact to his
manager and also that he had been
told by the
Income-tax Officer that his accounts were unsatisfactory. Because he was asked to do so the complainant
saw the respof\dent at the latter's house on October 6
or 7 and he asked the complainant if he had brought
the money and after some talk about the assessment
the respondent asked the complainant to pay half the
amount as it was Deepavali time. There is evidence
of a defence witness also to show that towards the end
of October 1951·, the complainant was·· seen coming
from the house of the respondent though the prosecution and the defence are not in accord as to the purpose
of this visit.
. S.C.R.
SUPREME COURT REPORTS
583'
The Circle Inspector, Munisami P.W. 12, claims to
have received complaints while at Madras about the
respondent being corrupt and his "indulging in corrupt
practices". He then came to Coimbatore and got into
touch with the complainant and asked him if he had
paid any bribe to the respondent. The complainant
mentioned to · the Inspector about the demand of a
bribe by
the respondent
At the instance of the
· Inspector the complainant appeared before the Tehsildar-Magistrate who
recorded his statement P-17
wherein the whole story of the demand of the bribe has
been set out. The Inspector then gave ten one hundred currency notes to the complainant after their
numbers were taken down in Ex. P-17. The complainant then went to the office of the accused but no
·money was accepted on that day because the respondent had received an anonymous letter Ex. P-18 warning him of the trap which was being laid by the
Malayalam people. The respondent naturally got very
annoyed with the complainant and sent him away.
The same evening the complainant was told that he
was required to go to the house of the respondent on
the following morning which he did at 8 a. m. . The
respondent told him that he should take no notice of
the anonymous letter which must have been sent by
his enemies and asked him to pay some money. The
complainant paid a sum of Rs. 200 which on his return
he entered in his kacha account book which the Higlt
Court has rejected without sufficient reason. On the
evening of November 15,. the complainant again went
to the house of the respondent and the latter told him
that he would pass final orders and that money should
be paid. The record, P-7 and P-7(a), shows that an
order was dictated on November 13 although there is
no proof or even indication that the complainant knew
about it. The complainant was given 8 one hundred
rupee notes by the Inspector and the complainant paid
them to the respondent on the morning of November
17 at the latter's house. On this occasion the complain-·
ant accompanied by his manager P.W. 14 had gone
towards the house of the respondent along with the
Magistrate and Circle Inspector :!.nd Venkatesa IY,er
1957
;
(. :.J 0
Madras
v.
A. Vaidya11atha
Iyer
Kapur J.
1957
The State of
Madras
v.
A. Vaidyanatha
lytr
KapurJ.
584
SUPREME COURT REPORTS
[1958]
P.W. 14 in a car which was stopped three
or four
blocks away from the house of the respondent and
only the complainant and his manager went into the
respondent's house and paid the money. Two or three
minutes later the Inspector P.W. 12 and the Magistrate
P.W.
13 and one Sesha Ayyar who had joined the
party en route also came into the house on receiving
the signal from the complainant. They disclosed their
identity to the respondent and told him that they had
information that he had received Rs. 800 from the
complainant as illegal gratification and asked him to
produce the money which he had received from the
complainant. The respondent did not say anything
and got up from the chair on which he was sitting and
tried to go into the house but was preventec;l from
doing so by the Inspector and he then produced the
money from the folds of his dhoti. While the mahazar
was being prepared the respondent said that he had
received this money as a loan from the complainant
who denied this and said it had been paid as a bribe.
A telegram was then sent to the Superintendent of
Special Police Establishment and under his orders a
case was registered and the investigation was
then
taken up by a Deputy Superintendent of Police who
searched the house of the respondent on November 19
but no pronote seems to have been received or taken
into possession on that date. A pronote with fout anna
stamps affixed was later produced in the court by the
respondent on July 17, 1952 during the course of his
statement under s. 342 Criminal Procedure Code but
it was not mentioned to the Magistrate P.W. 13 by
the respondent.
The charge against the respondent was that he had
obtained from the complainant Rs. 800 as gratification other than legal remuneration as a motive for the
reward for showing favour to him in the exercise of
official functions and had thereby
committeed an
offence punishable under s. 161 of the Indian Penal
Code read with s. 4 of the Prevention of Corruption
Act (Act II of 47).
The explanation of the respondent was that he mentic;med to the complanant about his money difficulties
S.C.R.
SUPREME COURT REPORTS
585
when accidentally he met him on the road towards
the end of August or beginning of September
1951.
The complainant offered to lend him Rs .. 1,000/-.
At
that time he was not aware that the complainant had
an assessment pending before him. It was the complainant who told him on November 15 when he met
him again that the anonymous letter was the "work
of his enemies" and promised to advance the loan as
previously promised and he also suggested that the
respondent should execute a pronote for Rs.
1,000
which would be attested by Venkatesa Ayyar to which
he (the respondent) was agreeable. The complainant
paid Rs. 800 on. the morning of November 17
and
promised to pay Rs. 200 in the evening. The respondent had the pronote ready and offered to hand
it
over in the morning but the complainant said he
would take it when "he left the house".
The learned Special Judge accepted the story of the
prosecution and after a careful analysis of the evidence
fouild the respondent guilty of the offence charged
and sentenced
him to six months simple imprisonment.
On appeal being taken to the High Court the learned
Single Judge reversed the judgment and acquitted the
respondent. It will be .convenient to give here the
main findings of the learned judge in his own words :
(i) "It is true that at the time whe.n the money
was accepted by the accused, the proceedings in relation to assessment of income-tax on P.W.
8 were
pending before the accused.
NaturaJly, therefore, if
in such circumstances, the accused should receive
money from
an
assessee, the suspicion is readily
aroused that the money must have been .paid only as
an illegal gratification. On going through tlie judgment
of the learned trial Judge, I formed the impression
that he was totally influenced by such suspicion."
(ii) "The result is that if the v~tsion of P. W. 8
and that of the accused are balanced, the probability
seems to tilt the scale in favour of the
accused's
version.
In any case, the evidence is not enough to
show that the explanation
offered
by the accused
M2SC PIV61-9
·'
1957
The State. of
Madras
v.
A. Vaidyur1uthM
Iyer
Kapur /.
586
SUPREME COURT REPORTS
[1958]
_ I951
e~nnot reasonably be true, and so, the benefit of doubt
must go to him."
_
The State of
(iii) "But this was not a ease of ordinar.}' lendee, ·
ft!adras
v.
but an Income-tax Officer whose favour was needed by
A. Vaidyanatha the lender."
•
Iyer
(iv) "Evidence shows that in· November, 1951,
Kapur J.
'.
_,
the accused was in need of a sum of Rs. 1,000 and,
for that purpose, has asked P.,V. 8 for .a loan."
(v) "In my view, _the evidence does not necessarily make out a ease that the accused must have
accepted the money only as a bribe."
(vi) "I do not therefore feel certain that the -
_taking of a loan· with an -obligation to repay it with
interest, would fall within the meaning of the term
' gra tifica ti on '. "
The extent of the power of the Supreme Court to -
interfere with a judgment of acquittal was raised before us by the respondent's counsel and it was eon tended that the jurisdiction exercised by this court under
Art. p6 was . the same as that exercised by · the
Judicial Committee of the Privy Council and reliance
was placed on a minority ·judgment by Venkata-
..
rama Aiyar J. in Aher Raja Khima v. The State of
Saurashtra (') where -the learned judge after discussing
the various Privy Council judgments and -quoting a
passage from . the judgment of thi_s court in _Pritam
Singh v. The State(') observed!· ·
"The preceding article referred to in the openi'ng
passage is clearly article 134. Article 134(1) confers a
right of appeal to this court-in certain cases, in terms
- unqualified, on questions both of fact and law, and if
the scope of an appeal under Article 136 is to be extended likewise to questions of fact, then article 134( l) would
become superfiuous. It is obvious that the intention
. of the Constitution in providing for an appeal on facts
· wi.der Article 134(1)(a) and (b) was to exclude it underArticle 136, and it strongly supports the conclusion
~ reached in Pritam Singh v. The State (') that like the
Privy Council this Court would not function as a .further court of appeal on facts in criminal cases. "
(z) (r950J S.C.R. 453• 458.
. ,
•
S.C.R.
SUPREME
COURT
REPORTS
587
The State of Madhya Pradesh v. Ramakrishna
Ganpatrao Limsey (1) was also referred to by counsel for
the respondent and it was contended that. the Supreme
Court should not interfere with the order of the High
Court merely on the ground that it took a different
view of the facts. That was
an appeal which had
})een brought on a certificate by the High Court and
not by . Special Leave of this Court. That judgment
was considered by a Constitution Bench in States of
Madras v. Gurviah Naidu & Co., Ltd. (2) and S.R. Das,
Acting C.J., delivering the judgment of the court pointed out that that was a decision of a bench of three
judges and not of a Constitution bench and the observation that there was no provision corresponding to
s. 417 of the Criminal Procedure· Code only emphasised
that this Court should not in appeal by Special Leave
interfere with the order of acquittal passed by
the
High Court merely for correcting errors of fact or of
law. Gurviah Naidu's case (2) was an appeal against a
judgment of acquittal and this court reversed the
judgment saying :-
"In our view, the High Court erred in holding
that the prosecution had failed to establish their case
and in acquitting the accused."
This case negatives the contention that under Art.
136 interference by this court with findings of High
Courts in judgments of acquittal is not intended.
Even in State of Madhya Pradesh v. Ramakrishna
Ganpatrao (1) Mahajan J. was of the opinion that the
Supreme Court can interfere where the High Court
"acts perversely or otherwise improperly or has been
deceived by fraud."
In Pritam Singh v. The State (3) Fazl Ali J. after a
careful examination of Art. 136 along
with the
preceding articles stated the scope of the appeal under
Art. 136 to be :-
"Generally speaking, this court will not grant
special leave, unless it is shown that exceptional and
special circumstances exist, that substantial and grave
injustice has been done and that the case in question
(1) A.I.R. 1954 S.C. 20.
(3) [1950] S.C.R. 453, 456.
(~) A.J.R. 1956
158, 161.
M2SC PIV6!-10
1957
Tht State of
Jlfadras
v.
A. Valdyanatha
Iyer
Kapur I.
1957
Th• State of
Madras
v.
Vafdyanatha
Iyer
Kapur/.
588
SUPREME COURT REPORTS
(1958)
presents features of sufficient gravity to warrant a
review of the decision appealed against."
Even the Privy Council in laying down the permissible limits for review in criminal matters included
things "so irregular or so outrageous as to shock the
very basis of justice". See Mohinder Singh v. The
King(').
An instance of this principle is the decision of the
Privy Council in Stephen Seneviratne v. The King (2)
which will be discussed later in this judgment and
which has been approved of by this court.
Interpreting the following words of s. 205 of the
Government of India Act, 1935, "any judgment, decree
or final order of a court" and "it shall be the duty of
-every High Court in British India to consider in every
case", Lord Thankerton in King Emperor v. Sibnath
Bannerji(') said :-
"The· purpose of the provision is to confer a
right of appeal in every case that involves a substantial
question of law as to the interpretation of the Act or
of any Order in Council made thereunder."
One of the questions for decision in that case was
whether an appeal lay in cases of Habeas corpus. Lord
Thankerton there observed :
"In the absence of an express exception of
habeas corpus cases, and having in view· the terms
and purpose of the section, their Lordships are unable
to limit the terms of the section by mere construction
so as to exclude these cases from its operation."
In Art. 136 the use of the words "Supreme Court
may in its discretion grant special leave to appeal
from any judgment, decree, determination,
sentence
or order in any cause or matter passed or made by
any court or tribunal in the territory of India" show
that in criminal matters no distinction can be made
as a matter of construction
between a judgment of
conviction or acquittal. In Bhagwan Das v.
The State
of Rajasthan(4)
the
following observation of the
Judicial Committee of the Privy Council in Stephen f
Seneviratne v.
The King(2) at p. 299 :
(1) (1930) L.R. 59 I.A. 033, 235.
(3) (19;5) L.R. 7> I.A. 041, >55·
(>) A.l.R. 1936 P.C. zBg.
(4) A.l.R. 1957 $.C. 589.
S.C.R.
SUPREME COURT REPORTS
589
" .... there are here no grom1ds on the . evidence,
taken as a whole, upon which any tribunal could
properly as a matter of legitimate inference, arrive at
a conclusion that the appellant was guilty .... "
was quoted with approval and after an examination
of all the facts and circumstances of the case the
Supreme Court reversed the judgment of conviction
by the High Court under Art. 136. The question for
decision in the present case is whether it falls within
the limits laid down in the above-mentioned cases.
This court will not readily interfere with the findings
of fact given by the High Court but if the High Court
acts perversely or otherwise improperly interference
will be called for.
The findings of the High Court in the present case
are, to say the least, halting, and the approach to the
whole question has been such that it falls within what
Mr. Justice Mahajan in State of Madhya Pradesh v.
Ramakrishna
Ganpatrao (1)
described as
"acting
perver,sely or otherwise improperly"..
Although the
learned High Court Judge has in the beginning of the
judgment mentioned the presumption which arises
tinder s. 4 of the Prevention of Corruption Act (II of
1947), the following passage in the judgment :
·
"in any case, the evidence is not enough to show
that the explanation offered by the accused cannot
reasonably be true, and so, the benefit of doubt must
go to him."
is indicative of a disregard of the presumption which
the law requires to be raised under s. 4. The relevant
words of this section are :
"Where in any
trial of an offence
punishable
uttder s.
161. ............ .it is proved that· an accused
person
has
accepted .............. any
gratification
(other than legal remuneration) ....... from any person,
it shall be presumed unless the contrary is proved that
he accepted ................... that gratification ........... as a
motive or reward such as is mentioned in the said
. section 161 ...................................... ''
Therefore whete ·it is proved that a gratification has
beeh accepted, then the presumption Sba\l at ort¢e arise
(1) A.I.R. 1954 S.C. 20.
.
19S7
The State of
Mtirlras
v;
A. Viridyanatha
Jj•et
[(,dpurl.
1957
Th•
State of
Madras
v.
A. J-'aidyanatha
Iyer
KapurJ.
590
SUPREME COURT REPORTS
[1958]
under the section. It introduces an exception to the
general rule as to the burden of proof in criminal
cases and shifts the onus on to the accused. It may
here be mentioned that the legislature has chosen to
use the words 'shall presume' and not 'may presume'
the former a presumption of law and latter of fact.
Both these phrases have been defined in the Indian
Evidence Act, no doubt for the purpose of that Act,
but s. 4 of the Prevel}tion of Corruption Act is in pari
materia with the Evidence Act because it deals with
a branch of law of evidence, e.g., presumptions, and
therefore should have
the same meaning. "Shall
presume" has been defined in the Evidence
Act as
follows :
"Whenever it is directed by this Act that the
Court shall presume a fact, it shall regard such fact
as proved unless and until it is disproved." .
It is a presumption oflaw and therefore it is obligatory on the court to raise this presumption in every case
brought under s. 4 of the Prevention of Corruption
Act because unlike the case of presumptions of fact,
presumptions of law constitute a branch of jurisprudence. While giving the finding quoted above the
learned judge seems to have disregarded the special
rule of burden of proof under s. 4 and therefore his
approach in this case has been on erroneous lines.
The judgment also shows that certain salient pieces
of evidence were missed
or were not properly
appreciated.
At the time when the penalty notice was issued
under s. 28 of the Income-tax Act the respondent
was not the Income-tax Officer at Coimbatore but by
June 6, he had been posted at Coimbatore and the note
on the Penalty File dated June 6, 19~1 :
"put up proposal to l.A.C. for levy of standard
penalty,"
was made by him. Although this proposal was made
on June 6, 1951, it is not clear as to what final orders
were passed in these proceedings and when. At least
there is nothing to indicate that any intimation was '
given to the complainant in regard to this matter. The
complainant has stated on oath as P.W. 8:-.
S.C.R.
SUPREME COURT REPORTS
591
"I alone went to the accused on 28th September,
1951. He then told me that the penalty paper was not
disposed of and that the accounts for the current year
had not also been gone through."
On the day following this the respondent asked the
complainant for illegal gratification of Rs. 1,000.
Counsel for the respondent contended that there was
no occasion for the respondent to say anything about
the penalty proceedings because as far as
he was
concerned the recommendation had already been made
by him but the real question is whether the complainant was told as to what had happened or had any
knowledge of this. He states that he had none and
there is nothing to indicate that he had.
The respondent has then stated that the complain·
ant was
known to him since 1942 when
he, the
respondent,
was the Head Clerk of the Appellate
Assistant Commissioner of Income-tax and that is the
reason why towards the end of August or the begin·
ning of September when he casually met the complain·
ant on the road, he told him that he was in financial
difficulties and the complainant offered him a loan of
Rs. 1 ,000 to be returned in easy instalments and that
he did not know at that time that the complainant
was an assessee before him. This statement of the
respondent has been accepted by the High Court
without considering the following important facts.
Notice was issued to the complainant and he filed his
return on August 11, 1951. The notice must have
been issued to the complainant under s. 22(2) of the
Income-tax Act by the respondent himself as he was
at that time the Income-tax Officer. So it is difficult
to believe his statement about his not knowing that
the complainant was an assessee before him and it is
improvable that the respondent would mention his
financial troubles to a more or less casual acquaintance who has neither been shown to be a banker, nor
a money lender nor a wealthy person. The complainant has stated that he visited the respondent on 6th
or 7th October 1951, when he asked him if he had
brought the money. The complainant replied that he
had no money to spare as he had purcha$ed a house
1957
The State of
Madras
v.
A. Vaidya11atha
Iyer
Kapur J.
1957
The State of
Madras
A. Vaidyanatha
Iyer
Kapur J.
592
SUPREME
COURT
REPORTS
[1958]
and he also asked him if the respondent had finished
the . assessment.
The latter's reply wa> that
he
would look into the matter and also told him that
the complainant might pay half the amount (of the
illegal gratification) before the deepavali time.
This
statement the respondent has denied but the statement of the complainant as to his having no money
as he had purchased a house has not been seriously
challenged in cross-examination.
The complainant had been asked to produce the
accounts and he did produce them on Sptember 27.
The notes made by the respondent in P-7 and P-7(a)
show that the accounts of the complainant were not
being accepted in regard to Coimbatore Hotel.
The
portion of the order was :-
"All the defects that are usual in hotel accounts
exist here."
fn regard to Bhavanisagar hotel the note stated:-
"Purchases are not fully supported and sales are
reckoned from till takings."
On October 1, 1951, the assessee
had filed his
written statement and
also some other documents.
Nothing more seems to have been done till November 7,
when the relevant part of the note on the file is:
"I have been keeping this in order to compare
the results with other nearby hotels."
As to why no enquires could be made in the whole of
this period is not clear from the assessment
record
and it lends support to the prosecution case that the
respondent was making approaches to the complainant
to get. money
from him. The respondent during
the pendency of assessment proceedings of
the
complainant allowed the complainant to visit him at
his
house
and even paid visit to his cafe. Even
according to the findings of the High Court the
complainant was "needing the favours" of the respondent who
on
his own showing was himself in
dire need of a thousand rupees as he had succeeded
in collecting only a thousand rupees by November 2,
and needed twice that amount for his sons premium
or security as he chooses to call it.
No importance
was attached to this aspect of the case by the learned
s.c.R.
SUPREME COURT REPORTS
593
judge of the High Court. In our opinion the learned
trial judge correctly appreciated .this part of the
prosecution case and his judgment is not, as the High
Court has said, coloured by mere suspicion.
·
On November 6, 1951, Circle Inspector Munisami
contacted the complainant and arrangement was made
for R$. 1,000 to be paid by the complainant to the
respondent and the money was actuaJly taken by the
complainant, and offered to the
repondent
on
November 8 which the respondent did not accept as
he had received an anonymm.1s letter Ex. P-18 which
was dated November 6, 1951 in which the respondent
had
been
warned
that
Malayam people were
attempting to "ruin him". Jn spite of this waming the
respondent continued to have truck with the complainant and actually accepted Rs. 800 from him. It is
true that when soon after the money was paid and the
Inspector P.W. 12 and the Magistrate P.W. 13 arrived
at the house of the respondent and asked him about
this money he stated that he had taken it as a loan
but in the context it assumes a different complexion.
The statement of the Magistrate P.W. 13 was :-
"While the mahazar was being prepared the
accused volunteered and told me that he had received
the
800 rupees as
a loan . from P.W.
8 the
complainant."
This witness had· also stated that when he went into
the verandah of the house, he asked · the respondent
whether he had received an illegal gratification from
the complainant and also asked him to produce the
money. The accused did not say anything but got
up from the chair and tried to go inside the house which
he was prevented from doing by the Inspector P. W. 12.
The witness added :
"The accused was seen trembling and
meddling
with something under the towel. T asked the accused
to remove the towel. The accused removed the towe1.
I saw some bulging at his waist il) the dhoti· he was
wearing. I asked him again to produce the currency
notes. He produced them from the folds of the dhoti
he was wearing. When producing the currency notes
the accused did not say anything."
19S7
The State of
Madras·
A. Vaidya11atlrn
Kapur/.
1957
The State of
Madras
...
A. Vaidya11atha
Iyer
Kapur J.
594
SUPREME COURT
REPORTS
[1958]
No real cross-examination was directed against these
portions of the statement of the Magistrate P.W. 13
nor has the High Court correctly appreciated them or
given them due weight. The respondent produced
before the Special First Class Magistrate on July 11,
1952, an unsigned pronote for Rs. 1,000 executed by
him in favour of the complainant. That pronote was
not found in the house when the search was made by
the Deputy Superintendent of Police on November 19,
1951, and it is not explained why the pronote should
have been made for Rs. I ,000 when actually the amount
paid was only Rs. 800 and why the respondent offered
to give this pronote to the complainant without
receiving full consideration.
These salient features of the case do not seem to have
been properly appreciated or given due weight to
by the High Court and in our opinion the learned
judge's approach to the question whether the sum of
Rs. 800 was an illegal gratification or a loan is
such
that the judgment falls within the words of Mahajan J.
in Ramakrishna's case('), i.e. that the High Court has
acted
perversely or otherwise
improperly.
The
evidence and the circumstances lead to the conclusion
that the transaction was not one of loan but illegal
gratification.
In view of the finding that the sum of Rs. 800
was a bribe and not a loan it is not necessary to
consider whether
in this case the loan would be
an illegal gratification within s. 4 of the Prevention
of Corruption Act (II of 194 7) or not.
We would, therefore, allow this appeal, set aside the
judgment and order of the High Court of Madras and
restore that of the Special Judge
of Coimbatore
convicting the respondent of the offence he was
charged with. The respondent must surrender to his
bail bond.
Appeal allowed.
(1)
A.LR. 1954 S.C. 20.