ION 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 Crimi nal Appeal No 498 of 1954 and Criminal Revision Case No 257 of 1955 arising out of the judgment and order dated the 12th July 1954 of the Special Judge Coimbatore in C C No I of 1952
H J Umrigar H R Khanna and R H Dhebar for the appellants
Krishnaswamy Iyengar and Sardar Bahadur for the re spondent
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 Court of Madras reversing the judgment of the Special Judge of Coimbatore and thereby acquitting the respondent who had been convicted of an offence under section 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 582 of June 1951
According to the prosecution the respondent in the end of September 1951 demanded from KS Narayana Iyer hereinafter referred to as the complainant who is a proprietor of a Coffee Hotel called Nehru cafe in Coimba tore with another similar hotel at Bhavanisagar a bribe of Rs 1000
The complainant had been assessed to income tax all along since 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 section 28 read with section 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 morn ing 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 1000 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 respondent 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 re spondent though the prosecution and the defence are not in accord as to the purpose of this visit
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 toCoimbatoreandgot into touchwith the complain ant and asked him if he had paid anybribetotherespoiident
The complainant mentioned to the Inspector about the demand of a bribe by the respondent
At the instance of the In spector the complainant appeared before the Tehsildar Magis trate 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 exhibit P 17
The complain ant then went to the office of the accused but no money was accepted on that day because the respondent had received an anonymous letter exhibit 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
The same evening the complainant was told that he was required to go to the house of the respond ent 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 High 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 respond ent on the morning of November 17 at the latter s house
On this occasion the complainant accompanied by his manager P W 14 had gone towards the house of the respondent along with the Magistrate and Circle Inspector and Venkates lyer 584 P W 14 in a car which was stopped three or four blocks away from the house of the respondent and only the complain ant 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 complain ant 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 prevented from doing so by the Inspector and he then pro duced the money from the folds of his dhoti
While the mahazar was being prepared the respondent said that he bad received this money as a loan from the complainant who denied this and said it had been paid as a bribe
A tele gram 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 Superintend ent 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 four anna stamps affixed was later produced in the court by the respondent on July 171952 during the course of his state ment under section 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 section 161 of the Indian Penal Code read with a 4 of the Prevention of Cor ruption Act Act II of 47
The explanation of the respondent was that be men tioned to the complainant about his money difficulties 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 1000 
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 respond ent should execute a pronote for Rs 1000 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 prosecu tion and after a careful analysis of the evidence found 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 when 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
Naturally 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 the 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 version of P W 8 and thatof the accused are balanced the probability seems totilt the scale in favour of the accused s version
In any case the evidence is not enough to show that the explana tion offered by the accused 586 cannot reasonably be true and so the benefit of doubt must go to him iii But this was not a case of ordinary lendee but an Income tax Officer whose favour was needed by the lender
ivEvidence shows that in November 1951 the accused was in need of a sum of Rs 1000 and for that purpose has asked PW 8 for a loan v In my view the evidence does not necessarily make out a case 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 I gratification 
 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 contended that the jurisdic tion exercised by this court under article 136 was the same as that exercised by the Judicial Committee of the Privy Coun cil and reliance was placed on a minority judgment by Venka tarama Aiyar J in Aher Raja Khima vs The State Of Saurash tra1 where the learned judge after discussing the various Privy Council judgments and quoting a passage from the judgment of this court in Pritam Singh vs The State2 observed  The preceding article referred to in the opening passage is clearly article 134
Article 1341 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 1341 would become super fluous
It is obvious that the intention of the Constitu tion in providing for an appeal on facts under Article 1341a and b was to exclude it under Article 136 and it strongly supports the conclusion reached in Pritam Singh vs The State 3that like the Privy Council this Court would not function as a further court of appeal on facts in crimi nal cases  I 19552 SCR 1285 1301
2   458 587 The State of Madhya Pradesh vs 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 been 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 State of Madras vs Gurviah Naidu  Co Ltd 2 and section R Das Acting CJ 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 section 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 ac quitting the accused
This case negatives the contention that under article 136 interference by this court with findings of High Courts in judgments of acquittal is not intended
Even in State of Madhya Pradesh vs 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 vs The State 3 Fazl Ali J after a careful examination of article 136 along with the preceding articles stated the scope of the appeal under article 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 i 2 AIR 1956 SC 158 161 75 3  458
588 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 irregu lar or so outrageous as to shock the very basis of justice 
See Mohinder Singh vs The King 1
An instance of this principle is the decision of the Privy Council in Stephen Seneviratne vs 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 section 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 vs Sibnath Bannerji 3 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 tile terms of the section by mere construction so as to exclude these cases from its operation
 In article 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 terri tory 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 vs The State of Rajasthan4 the following observation of the Judicial Committee of the Privy Council in Stephen Seneviratne vs The King2 at p 299 1 I932 LR 59 IA 233 2353 1945 LR 72 IA 241 255
2  AIR 1936 PC 2894 589   there are here no grounds 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 re versed the judgment of conviction by the High Court under article 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 ques tion has been such that it falls within what Mr Justice Mahajan in State of Madhya Pradesh vs Ramakrishna Ganpatrao 1 described as  acting perversely or otherwise improperly 
Although the learned High Court Judge has in the begin ning of the judgment mentioned the presumption which arises under section 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 section 4
The relevant words of this section are  Where in any trial of an offence punishable under section 161    it is proved that an accused  person has accepted   any gratification other than legal remuneration  from any personit shall be presumed unless thecontrary is proved that he accepted    that gratifica tion as a motive or reward such as is mentioned in the said section 161      Therefore where it is proved that a gratification has been accepted then the presumption shall at once arise i A1R 1054 SC 20
590 under the section
It introduces an exception to the gener al 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 de fined in the Indian Evidence Act no doubt for the purpose of that Act but section 4 of the Prevention of Corruption Act is in part materia with the Evidence Act because it deals with a branch of law of evidence eg presumptions and there fore 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 of law and therefore it is obligatory on the court to raise this presumption in every case brought under section 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 disre garded the special rule of burden of proof under section 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 section 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 61951 put up proposal to IAC 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 PW 8 591  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 complain ant for illegal gratification of Rs 1000
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 bad
The respondent has then stated that the complainant was known to him since 1942 when he the respondent was the Head Clerk of the Appellate Assistant Commissioner of In come tax and that is the reason why towards the end of August or the beginning of September when be 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 1000 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 com plainant and he filed his return on August 11 1951
The notice must have been issued to the complainant under a 222 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 improbable 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 complaint replied that he had no money to spare as he had purchased a house 592 and he also asked him if the respondent had finished the assessment
The latter s reply was 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 be did produce them on September 27
The notes made by the respondent in P 7 and P 7a 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
 In regard to Bhavanisagar hotel the note stated   Purchases are not fully supported and sales are reckoned from till takings On October 1 1951 the assesses 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 enquiries could be made in the whole of this period is not clear from the assessment record and it ends 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 November2 and needed twice that amount for his son s premi um or security as he chooses to call it
No importance was attached to this aspect of the case by the learned 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 tile High Court has said coloured by nere suspicion
On November 6 1951 Circle Inspector Munisami contacted the complainant and arrangement was made for Rs 1000 to be paid by the complainant to the respondent and the money was actually taken by the complainant and offered to the re spondent on November 8 which the respondent did not accept as he had received an anonymous letter exhibit P 18 which was dated November 6 1951 in which the respondent had been warned that Malayalam people were attempting to ruin him
In spite of this warning 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 PW 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 state ment of the Magistrate PW 13 was  While the mahazar
was being prepared the accused volun teered and told me that he had received the 800 rupees as a loan from PW 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
I asked the accused to remove the towel
The accused removed the towel
I saw some bulging at his waist in the dhoti be was wearing
I asked him again to produce the currency notes
He produced them from the folds of the dhoti be was wearing
When producing the currency notes the accused did not say anything 594 No real cross examination was directed against these por tions of the statement of the Magistrate PW 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 promote for Rs 1000 executed by him in favour of the complainant
That promote 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 promote should have been made for Rs 1000 when actually the amount paid was only Rs 800 and why the respondent offered to give this promote to the complainant without receiving full considera tion
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 gratifi cation or a loan is such that the judgment falls within the words of Mahajan J in Ramakrishna s case 1 ie 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 grati fication
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 section 4 of the Prevention of Corruption Act II of 1947 or not
We would therefore allow this appeal set aside the judg ment 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


Summary:
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 section 16i Indian Penal Code and sen tenced him to six months simple imprisonment
On appeal the High Court acquitted the respondent
The State obtained special leave and appealed
Held that the words used in article I36 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 will not readily interfere with the findings of fact given by the High Court but if the High Court i AIR 1954 SC 680
581 acts perversely or otherwise improperly interference will be called for
The findings of the High Court are halting and its approach to the case has been erroneous as it disregarded the special rule of burden of proof under section 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 Court to raise it in every case brought under section 4
The evidence and circumstances in this case lead to the conclusion that the transaction was not one of loan but of illegal gratification