IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE FIFTEENTH DAY OF SEPTEMBER TWO THOUSAND AND NINE PRESENT THE HONOURABLE SRI JUSTICE K.C.BHANU CRIMINAL APPEAL NO.1337 OF 2003 Between:- J.Venkateswara Rao, Inspector of Excise, Hyderabad. ..Appellant/Accused And State of A.P. rep.by C.B.I., Hyderabad. .. Respondent/Complainant JUDGMENT: The present Criminal Appeal, under Section 374(2) Cr.P.C., is directed against the Judgment dated 08.12.2003 in C.C.No.28 of 2001 on the file of Special Judge for C.B.I. Cases, Hyderabad where under and whereby, appellant/A.1 was found guilty of the offences under Sections 7 and 13(1)(d) read with Sec.13(2) of Prevention of Corruption Act, 1988, and accordingly, convicted and sentenced to undergo Rigorous Imprisonment for one year and to pay fine of Rs.2,000/- in default to suffer simple imprisonment for three months for the offence under Section 13(1)(d) read with 13(2) of the Act, and sentenced to undergo Rigorous Imprisonment for two years and fine of Rs.3,000/- in default to suffer simple imprisonment for three months for the offence under Section 7 of the Act. 2. The brief facts that are necessary for the disposal of the present appeal may be stated as follows: P.W.1-the de facto complainant, is the Director, P.W.2 is the Assistant Production Manager and P.W.3 is the Clerk, in Messers Medchal Chemicals and Pharmaceuticals Private Limited. P.W.4-the bank officer, is accompanying witness, P.W.6 is the sanction authority and P.W.7 is the Circle Inspector of Police, C.B.I., who is trap laying officer. On 22-12-2000, A-1 and his staff inspected Messers Medchal Chemicals and Pharmaceuticals Private Limited, verified the records of said company upto 6.30 p.m. and while going, A-1 asked P.Ws.2 and 3 to inform his Director (P.W.1) to meet him on the next day and the same was conveyed to P.W.1 by P.W.2. On 23-12-2000 around 6.30 p.m., P.W.1 came to the factory. At the same time, A-1 and some others also came there. A-1 told P.W.1 that the chemical factory has many intermediate products and although they may not be sold in the market, they can be subjected to excise duty, but the factory did not pay the same. He also said that the assessment for the year 1994, on this estimate, a substantial amount running in crores would be due towards excise duty and asked Rs.3,00,000/- as bribe to resolve the problem amicably. P.W.1 expressed his inability to pay that amount. Then A-1 noted some particulars. On 07.01.2001 A-1 telephoned to P.W.1 and said that if P.W.1 could not pay Rs.3,00,000/-, a sum of Rs.1,00,000/- may be paid, but P.W.1 declined. A-1 said that at least Rs.50,000/- should be paid on 18- 01-2001 failing which, A-1 would make a report to higher authority. P.W.1, who was not willing to pay the bribe, gave a report to Central Bureau of Investigation (for short ‘C.B.I.’) on 07.01.2001. Ex.P-1 is the report. On the basis of Ex.P-1, P.W.7- Inspector of Police, C.B.I. registered the case and issued F.I.R- Ex.P-11. P.W.7 secured the presence of mediators P.W.4 and another, and the trap was arranged and prepared pre trap mediators’ report under Ex.P-2. At about 2.30 p.m., P.W.1 along with trap party reached Taj Mahal hotel and trap party took vantage positions. Then, P.W.1 met A.1 and his colleague one Srinath (A.2) sitting over in the lobby. Meanwhile, P.W.4 also came there. All of them had a cup of coffee. During that time, A-1 asked P.W.1 whether he brought the money. Then, A-1 took P.W.1 to a Maruti car to where Srinath (A.2) and P.W.4 also followed. A- 1 sat in front seat other than driver seat, which was occupied by one Srinath (A.2). P.W.1 sat on back seat. P.W.4 stood to right of P.W.1 on the road. A-1 asked P.W.1 to give money. P.W.1 gave Rs.500/- bundle to A-1 who received it with his left hand and put it into dash board. Then, P.W.4 gave pre arranged signal, on which two C.B.I officials came and caught hold of both the hands of A-1 and took him to reception of Taj Mahal hotel. Sodium carbonate solution test was conducted to the left hand fingers of A-1, which gave positive result. When A-1 was asked about the amount of Rs.50,000/-, he told that he kept it in car dashboard. P.W.4 and another Inspector seized the amount. As per the directions of P.W.7, Inspector along with panch witnesses went, wiped the car dashboard with cotton swab and conducted sodium carbonate solution test, which gave positive result. The numbers of currency notes seized, when compared, tallied with the currency note numbers noted in first mediators’ report. After conducting personal search of A-1 and another-Srinath, post mediators’ report-Ex.P.3 was prepared at room No.30 at 10 p.m. on 08.01.2001. The version of A-1 was also incorporated in Ex.P- 3. P.W.7 handed over the case to P.W.9. P.W.9, after obtaining sanction order - Ex.P-10, and completion of investigation, filed charge sheet. 3. The charges levelled against the accused are as follows: “Charge Under Sec.7 of P.C.Act, 1988:- That you being public servant, employed as Inspector of Central Excise, P & I Unit, VII Division Commissionerate – I, Hyderabad initially demanded Rs.3,00,000/- on 26.12.2000, subsequently, reduced it to Rs.1,00,000/- on 06.01.2001 and finalized it to Rs.50,000/- on 07.01.2001 and accepted an amount of Rs.50,000/- on 08.01.2001 as bribe from Sri K.Pattabhiraman, Director, M/s.Medchal Chemicals and Parmaceuticals Limited for showing favour by not levying Excise and Customs duty on the firm M/s.Medchal Chemicals and Pharmaceuticals Limited and thereby, committed an offence punishable under Sec.7 of P.C.Act, 1988 and within my cognizance. Charge under Section 13(2) R/w.13(1)(d) of P.C.Act, 1988:- That, you being public servant, by corrupt or illegal means obtained for yourselves a pecuniary advantage of Rs.50,000/- from Sri K.Pattabhiraman, Director, M/s.Medchal chemicals and Pharmaceuticals Limited and thereby, committed an offence punishable under Section 13(2) read with Sec.13(1)(d) of P.C Act,1988 and within my cognizance”. When the said charges were read over and explained to the appellant/A-1, he pleaded not guilty, and claimed to be tried. 4. To substantiate the charges, the prosecution examined P.Ws.1 to 9 and got marked Exs.P-1 to P-13 besides the case properties–M.Os.1 to 4. On behalf of the accused, D.Ws.1 to 4 were examined and Exs.D-1 to D-3 are marked. 5. The Trial Court, accepting the evidence of prosecution witnesses, found the appellant/A.1 guilty of the charges levelled against him and accordingly, convicted and sentenced as stated supra. Challenging the same, the present Criminal Appeal is filed. 6. Now the point for determination is “Whether the prosecution proved its case beyond all reasonable doubt and whether the Judgment of the trial Court is correct, legal and proper?” 7 . The learned Senior Counsel Sri C.Padmanabha Reddy appearing for appellant/A.1 vehemently contended that the necessary ingredients for the offences under Section 7 and Section 13(1)(d) read with Section 13(2) of P.C.Act have not been established beyond all reasonable doubt; that the evidence of decoy witness is totally inconsistent with his earlier version made in Ex.P-1 and therefore, it is not safe to place an implicit reliance on the evidence of P.W.1; that the demand, as allegedly made by appellant on 26.12.2000, 06.01.2001 and 07.01.2001 as mentioned in the charge sheet has not been specifically mentioned either in Ex.P-1 or in the evidence of P.W.1; that the evidence of P.W.1 is totally inconsistent with the recitals in Ex.P.1 with regard to the motive, demand and inspection of the factory in question, and that Ex.P-1 was the suspicious document brought into existence to suit the case of the prosecution; that it was prepared in the office of the Central Bureau of Investigation as the typewriting in Ex.P-1 is similar to that of the typewriting in Ex.P-11-F.I.R. 8. He further contended that the money was not seized from the possession of the appellant and also that the money was not seized at the instance of the appellant so as to prove that the tainted currency notes–M.O.1 was in the constructive possession of the appellant; that there are so many inconsistencies in the evidence viz. firstly that the evidence of trap laying officer goes to show that he did not know the full name of the appellant, and he came to know after scribing of Ex.P-2 whereas Ex.P-2 indicates the full name of the appellant, and secondly that the trap laying officer stated that B.V.R.Choudary and Anuj Kumar brought the amount which was seized from the dash board whereas P.W.1 stated that Anuj Kumar brought the amount; that there is absolutely no corroboration to the evidence of P.W.1 with regard to demand of bribe, that there was no reference in the F.I.R. about the accused officer visiting the factory of P.W.1 on 22.12.2000; that there was a contradictory version of P.Ws.1 and 4 with regard to recovery of the tainted money and that there is a discrepancy with regard to the actual place of recovery of M.O.1 i.e., whether it was seized from the glove compartment of the dashboard or on the dash board; that it is the specific case of the prosecution that the appellant received the tainted currency notes with his left hand and kept the same in the dashboard but when resultant solutions of both hands’ fingers of A-1 and A-2 were subjected to analysis by P.W.5, the left hand fingers of A-1 were found to be positive for phenolphthalein and icons of sodium and corbonate and this aspect of the case has not been explained by the prosecution; that in view of these inconsistencies and improvements made by the prosecution, it is not safe to place any reliance on the evidence of witnesses examined by the prosecution and therefore, the appellant is entitled for benefit of doubt. Hence, he prays to set aside the convictions and sentence recorded by the trial Court. 9. On the other hand, Sri T.Niranjan Reddy, learned Special Public Prosecutor for the C.B.I., contended that, no doubt, there are discrepancies with regard to the actual date of demand but the fact remains that accused visited the factory of P.W.1 prior to the trap and that an official favour to be shown by the appellant to P.W.1 was pending because when the appellant inspected the premises, it was found that management failed to pay the excise duty on certain products, and not to take any further action in imposing excise duty, there was a possibility for appellant to demand certain amount; that the alibi pleaded by the appellant that he would not have been present in the factory premises on 23.12.2000, has not established; that the inconsistencies and improvements made by the witnesses are trivial in nature and they do not go to the root of the prosecution case so as to disbelieve the same; that, just prior to the trap, there was a conversation between P.W.1 and the appellant with regard to payment of money; that P.W.4 is totally independent witness and there is no other reason for him to speak false against the appellant. 10. He further contended that while throwing M.O.1–tainted currency notes, the phenolphthalein powder might have spread inside the car and therefore, both the hands’ fingers of A-1 must have contacted with the powder, and even if a slight particle of powder comes into contact, the sodium carbonate solution would turn into pink colour, and so, that possibility cannot be ruled out; that P.W.1 has no grouse or enmity against the accused so as to implicate him falsely in a case of this nature; that there is no other reason for P.W.1 to go to the Taj Mahal Hotel, Abids, Hyderabad as directed by the appellant except for paying the amount; that the inconsistency with regard to the actual place of seizure of the amount i.e. whether it is from the dashboard or glove compartment of the dashboard, makes no difference, but the fact remains that M.O.1-tainted currency notes had been seized from the vehicle of the appellant; that after an elaborate consideration of the evidence on record, the trial Court found the appellant guilty and there are no grounds to interfere with the Judgment of the trial Court. Hence, he prays to dismiss the criminal appeal. 11. The essential ingredients of Section 7 of the Act are: i) that the person accepting the gratification should be a public servant; ii) that he should accept the gratification for himself and the gratification should be as a motive or reward for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official function, favour or dis-favour to any person. 12. Similarly, the essential ingredients of Sec.13(1)(d) of the Act are: i) that he should have been a public servant; ii) that he should have used corrupt or illegal means or otherwise abused his position as such public servant, and iii) that he should have obtained a valuable thing or pecuniary advantage for himself or for any other person. 13. There cannot be any dispute that when once the necessary ingredients to constitute the offence under Section 7 of the Act are established beyond all reasonable doubt, the burden shifts on to the accused under Section 20 of the Act to rebut the same. If it is drawn, the presumption is that the accused person had accepted or obtained or agreed to accept or attempted to obtain for himself or for any other person, any gratification (other than the legal remuneration) or any valuable thing from any person. The presumption under this Section is a presumption of law, and therefore, it is obligatory on the Court to raise presumption in every case under this section because unlike the case of presumptions of fact, presumptions of Law constitute a branch of jurisprudence. In so far as the offence under Section 13(1)(d) of the Act is concerned, the burden never shifts to the accused. 14. It is not in dispute that M/s.Medchal Chemicals and Pharmaceuticals Limited (hereinafter recorded as factory), is a small scale industry manufacturing Ethamutol Hydrocholoride, a drug used in anti Tuberculosis. It is also not in dispute that Ethamutol Hydrocholoride has a zero exise duty. It is also not in dispute that while manufacturing Ethamutol Hydrocholoride, a by- product known as L2 Amino Butanol comes out which attracts the excise duty of 16% if the quantity of the by-product is more than the value Rs.1,00,00,000/-. It is the case of P.W.1 that the by-product L2 Amino Butanol would derive in a small quantity, and since its production is below the ceiling limits prescribed by the Government, there is not tax liability. Therefore, the case of P.W.1 is that there was no need for the company to pay any excise duty, on the by- product. 15. The evidence of P.W.1 would go to show that on 22.12.2000, while he was present in the office at Secunderabad, he received a phone call from his Manager about visiting the factory by some excise officials, and on 23.12.2000, he went to the factory and found number of excise officials including the appellant; at that time, the accused stated that the factory was producing many intermediate products and although they may not be sold in the market, they can be subjected to excise duty, and told that assessment of excise duty on those products from the year 1994, if estimated, would come in crores of rupees; that the appellant took him to a side room and stated that the matter could be solved amicably if he can give a sum of Rs.3,00,000/- as bribe, and on that, P.W.1 stated that due to financial problems, they could not pay that amount; that subsequently, the appellant was making telephone calls or sending messages to him or to the staff with regard to the payment of Rs.3,00,000/-. It is also his evidence that on 07.01.2001, the appellant telephoned to the house of P.W.1 and said that if he could not pay amount of Rs.3,00,000/-, a sum of Rs.1,00,000/- may be paid, and when he declined to pay, the appellant asked that atleast an amount of Rs.50,000/- should be paid on next day i.e., on 08.01.2001, failing which, he would make a report to his higher authority. After contacting his principals, he lodged Ex.P-1-complaint to P.W.7 on 07.01.2001. Thereafter, P.W.7 instructed P.W.1 to bring amount of Rs.50,000/- and the currency note numbers were duly noted down. Similarly, phenolphthalein powder was applied to M.O.1-currency notes. P.W.7 also instructed P.W.1 not to touch M.O.1 till demand was made by the accused officer. Ex.P-2–pre trap proceedings were scribed. After scribing Ex.P-2 proceedings, P.W.1 allegedly contacted the appellant through phone. Then, the appellant instructed him to come to Taj Mahal Hotel, Abids, Hyderabad. He along with P.W.4 went to the Taj Mahal Hotel at about 2.30 p.m. He found the appellant and another colleague in the lobby. At that time, the appellant asked P.W.1 whether he brought money. Thereafter, the appellant took him to the Maruthi Car. Srinath (A.2) sat in the driving seat whereas the appellant sat by the side of the driver seat and P.W.1 sat on the back seat whereas P.W.4 was standing on the road on his right side. Then, P.W.1 took M.O.1-tainted currency notes and gave to the appellant, who received the same with his left hand and put in the dashboard. Then, P.W.4 gave a pre-arranged signal and on that the trap party led by P.W.7, came there and took him to the reception of Taj Mahal Hotel. When the left hand fingers of appellant were subjected to sodium carbonate solution test, they turned into pink colour, whereas when the said test was conducted on the right hand fingers, the solution remained colourless. When the appellant was asked to produce the bribe amount of Rs.50,000/- which was received from P.W.1, he said that he kept the amount in the dashboard of the car. As directed by P.W.7, B.V.R.Chowdary (P.W.4) and Anuj Kumar came and produced Rs.50,000/- which was kept in the dashboard of the car. The rub on the dashboard with a cotton swab was also subjected to sodium carbonate solution test and it turned into pink colour and the numbers of the currency notes seized at the instance of the appellant were tallying with the numbers which are mentioned in Ex.P-2. Thereafter, Ex.P-3 post trap proceedings were drafted. 16. The specific charge levelled against the appellant is that he demanded Rs.3,00,000/- on 26.12.2000, subsequently, reduced it to Rs.1,00,000/- on 06.01.2001 and finally, to Rs.50,000/- on 07.01.2001 and accepted an amount of Rs.50,000/- on 08.01.2001. But as seen from the evidence of P.W.1, the first demand was made on 23.12.2000. Similarly, as seen from the evidence of P.W.1, it is clear that on 22.12.2000, some excise officials inspected the factory of P.W.1. That aspect of the case has not been stated by P.W.1 in Ex.P-1-complaint. The evidence of P.W.1 would go to show that there was demand for payment of Rs.3,00,000/- as bribe on 23.12.2000 whereas in Ex.P-1, though it is stated that on 23.12.2000, the appellant visited the factory along with his team and had gone through the records of production thoroughly and at that time, the appellant threatened P.W.1 that he would impose tax and penalty worth Rs.1.20 crores from 1994 onwards and further, appellant directed him to contact him on 26.12.2000, and when he contacted over phone on 26.12.2000, the appellant demanded Rs.3,00,000/- as bribe from him. Though there is a discrepancy with regard to the actual date and place of demand, the fact remains that prior to the date of trap, the appellant along with his excise officials inspected the factory premises of P.W.1 and found that the company was not paying excise duty in respect of L2 Amino Butanol, which is a by-product. 17. It is vehemently contended that it was not possible for the appellant to visit the factory of P.W.1 on 23.12.2000 in view of the evidence of D.Ws.1 and 4, which would clearly go to show that on 23.12.2000, the appellant and other central excise officials visited the factory of Cheminor Drugs which was later merged into Dr.Reddy’s Laboratory. The evidence of D.W.1 – who is ware house manager of Dr.Reddy’s Laboratory, would go to show that the excise officials including the appellant were present till 6 p.m. The evidence of D.W.1 and D.W.4, who is Senior Manager of Reddy’s Laboratory, would also go to show that by 7.30 p.m., the appellant and his other officials were present in the Green Park Hotel for the dinner being arranged by the Reddy Labs whereas the evidence of P.W.2 would go to show that the excise officials including the appellant, visited the factory in question after 3 p.m. or 3.30 p.m. The evidence of P.W.8 – Deputy Commissioner of Central Excise, would go to show that on 23.12.2000, the preventive team of Central Excise visited the Cheminor Drugs. But he did not specifically state that the appellant was one of the members of preventive team, which visited Cheminor Drugs of Jeedimetla on 23.12.2000 whereas he specifically stated that the appellant along with other members, visited M/s.Reddy Polimars and Processors Limited on 21.12.2000 and M/s.Ranith Pharma on 16.12.2000. He further stated that no permission was taken from him to visit the present factory by the appellant nor was it brought to his notice or knowledge. It is not in dispute that the factory, allegedly visited by the appellant, was located at Jeedimetla, Hyderabad whereas the factory in question is located in Medchal. In view of the fact that the appellant has taken the alibi, it is for him to establish the same by preponderance of probabilities. D.W.4 did not specifically state that till what point of time, the appellant was present in his factory, but D.W.1 stated that the appellant was present in the factory till 6 p.m. It is not in dispute that D.Ws.1 and 4 were also examined by police during the course of investigation. There is no evidence with regard to distance from the factory of P.W.1 to the factory of D.W.1. It is for appellant to establish that within ½ an hour one cannot go to the factory of P.W.1 from the factory of D.W.1. Except giving suggestion to P.W.1 that the accused and other officials never visited the factory on 22.12.2000 or on 23.12.2000, nothing has been elicited to discredit the testimony of P.W.1. 18. Similarly, P.W.2, who was working as Manager in the factory in question, categorically stated that on 22.12.2000, the appellant and others came to their factory and verified the records relating to the central excise duty. At that time, the appellant instructed him to inform Director Pattabiram to meet him on next day. Accordingly, he informed the same to his Director. On the next day, his Director came to the factory at about 6.30 p.m. and at that time, J.V.Rao (appellant) and others also came there. He categorically stated that the appellant and others were in the factory premises from 3.30 p.m. to 6.30 p.m on 22.12.2000. His evidence is also very clear that the appellant came to the factory at 6.30 p.m. on 23.12.2000. Though there is a discrepancy in the evidence of P.Ws.1 and 2 with regard to the actual time of visit by the appellant on 23.12.2000, that discrepancy would not belie the case of prosecution. The possibility for the appellant to visit the factory of P.W.1, after inspection of the Dr.Reddy’s Laboratory, cannot be shown to be impossible. 19. Similarly, P.W.3 is a Clerk in the factory. His evidence is also very clear that the appellant along with other Inspectors visited the factory on 22.12.2000 and verified the records upto 6.30 p.m. He also stated that on 23.12.2000, the appellant came to the factory and had a discussion with the Director. 20. No doubt, in the earliest report–Ex.P-1, P.W.1 did not specifically mention that the appellant and other Inspectors visited the factory on 22.12.2000. But the First Information Report is not an encyclopedia to contain all minute details. If the broad substratum of the