From Tax Reduction to Jail Term: ₹20 Lakh Bribe Demand Lands ITO & CA Behind Bars

Central Bureau of Investigation Vs V. Nagaraj (Principal Special Court for CBI Cases, Bengaluru)

Summary: In CBI v. V. Nagaraj & Naginchand Kincha, decided on 24 August 2026, the Principal Special Court for CBI Cases, Bengaluru, convicted an Income Tax Officer & a Chartered Accountant for conspiring to demand illegal gratification from an assessee in connection with reassessment proceedings.

A.K. Halim, the complainant, had been filing income-tax returns before Ward 4(3), Bengaluru. The returns concerned AYs 2008–09 & 2009–10. In June 2012, ITO V. Nagaraj issued a notice u/s 148 stating that income of approximately ₹3.28 crore had escaped assessment. Further proceedings were initiated concerning the complainant’s capital gains.

According to the prosecution, Nagaraj informed Halim that his tax liability would be approximately ₹80 lakh. He allegedly demanded ₹20 lakh as bribe for concluding the assessments by restricting the tax liability to approximately ₹30 lakh. Between 1 September & 6 September 2012, Nagaraj repeatedly contacted Halim & directed him to coordinate with Chartered Accountant Naginchand Kincha, to whom the assessment order had been handed over.

As Halim was unwilling to pay the bribe, he approached CBI with a written complaint & recordings of conversations. After verification, CBI registered RC No.12(A)/2012 on 8 September 2012.

Trap proceedings

CBI arranged a trap using ₹5 lakh in phenolphthalein-treated currency notes. Halim entered Kincha’s office while the trap team waited outside. After the amount was delivered, he gave the predetermined signal, “please arrange train ticket.”

The trap team entered Kincha’s office, where Nagaraj was also present. The tainted money was recovered from a yellow cover kept on Kincha’s table. His hand-wash tested positive for phenolphthalein. CBI also recovered the assessment order dated 6 September 2012, signed by Nagaraj, determining tax payable at ₹31,86,487. Both accused were arrested.

The prosecution examined 17 witnesses, produced 75 documents & marked 17 material objects.

Issues before the Special Court

• a criminal conspiracy between Nagaraj & Kincha;
• demand & acceptance of illegal gratification by Nagaraj;
• Kincha’s role as intermediary in demanding & receiving the bribe;
• criminal misconduct through abuse of Nagaraj’s official position; &
• validity of the sanction obtained u/s 19 of the Prevention of Corruption Act.

Prosecution’s contentions

CBI contended that the complainant’s direct testimony established the demand. It was corroborated by the independent trap witness, Trap Laying Officer, recovery mahazar, positive phenolphthalein test, assessment records, telephone-call details & recorded conversations.

The Call Detail Records showed repeated communication between the complainant, Nagaraj & Kincha during the relevant period, including several calls immediately before the trap. Kincha’s employee also confirmed that the assessment order was kept in his office & that Halim was called there for collecting it.

According to CBI, once demand, acceptance & recovery were established, the statutory presumption u/s 20 of the PC Act arose. Neither accused offered a probable explanation capable of rebutting it.

Defence contentions

Nagaraj argued that the assessment order had already been passed on 6 September 2012; therefore, no official work remained pending when the trap occurred. He claimed that he visited Kincha’s office regarding reimbursement of his mother-in-law’s hospital expenses. He also alleged that Halim filed a false complaint to escape tax liability.

Kincha contended that he had never represented Halim before the Income Tax Department. He claimed that Halim offered ₹5 lakh for payment towards tax, which he pushed back. This allegedly explained the phenolphthalein traces on his hands. Both accused questioned the electronic recordings, absence of the complainant’s original recording phone, lack of CCTV footage & absence of a direct shadow witness.

Findings & legal reasoning

The Court held that the sanction for prosecution was valid, having been granted by the competent authority after considering the relevant materials.

Relying on Neeraj Dutta v. State, the Court observed that proof of demand & acceptance is essential, but may be established through direct, documentary or circumstantial evidence. Halim’s testimony was found consistent on material particulars. Minor discrepancies did not affect the prosecution’s core case.

The Court rejected Kincha’s tax-payment explanation. If Halim genuinely intended to discharge the assessed liability of ₹31.86 lakh, there was no convincing reason for handing over only ₹5 lakh in cash to Kincha. The positive hand-wash, recovery of tainted money & presence of the assessment order in Kincha’s office supported acceptance of the bribe.

The CDRs, supported by certificates u/s 65B of the Evidence Act, demonstrated continuous coordination between both accused. The recordings, trap evidence, recovery documents & witness testimony collectively established a complete chain of circumstances. Once the foundational facts were proved, the presumption u/s 20 applied, which the accused failed to rebut even on a preponderance of probabilities.

The Court also held that prior completion of the assessment did not erase the offence, since gratification could constitute a motive or reward for an official act already performed.

Conviction & sentence

Both accused were convicted u/s 120B IPC. Nagaraj was additionally convicted u/s 7 & Section 13(2) r/w 13(1)(d) of the PC Act, while Kincha was convicted u/s 8.

Each was sentenced to three years’ simple imprisonment for the respective offences, with all sentences running concurrently. Nagaraj’s aggregate fine was ₹3 lakh, while Kincha’s aggregate fine was ₹2 lakh. Default attracted additional imprisonment.

The Court refused leniency despite age, health, clean antecedents & the 14-year trial, holding that corruption corrodes public administration & requires stern punishment. The ₹5 lakh was directed to be returned to Halim after the appeal period.

Practical implications

The judgment demonstrates that a professional intermediary can face independent criminal liability u/s 8, even without being a public servant. It also confirms that demand & conspiracy may be proved through a combined chain of oral testimony, trap recovery, chemical examination, CDRs & electronic evidence. Most importantly, an assessment order already having been signed does not provide immunity where the payment represents a reward for official favour.

Cases Discussed

• Neeraj Dutta Vs. State (Govt. of NCT of Delhi) [(2023) 4 SCC 731]
• B. Jayaraj Vs. State of Andhra Pradesh [(2014) 13 SCC 55]
• P. Satyanarayana Murthy Vs. District Inspector of Police, State of Andhra Pradesh [(2015) 10 SCC 152]
• State of Gujarat Vs. Navinbhai Chandrakant Joshi & Others [(2018) 9 SCC 361]
• Central Bureau of Investigation Vs. Baljeet Singh [2026 INSC 221]
• State of Maharashtra through CBI, Anti Corruption Branch, Mumbai Vs. Balakrishna Dattatrya Kumbhar [(2012) 12 SCC 384]
• State of M.P. Vs. Ram Singh [(2000) 5 SCC 88]
• Narendra Champaklal Trivedi Vs. State of Gujarat [(2012) 7 SCC 80]
• State Vs. Parthiban [(2006) AIR SCW 5267]
• State of Madhya Pradesh Vs. Mehtaab [(2015) 5 SCC 197]

FULL TEXT OF THE JUDGMENT/ORDER OF PRINCIPAL SPECIAL COURT FOR CBI CASES, BENGALURU

Sri.S.Hariharan, the Inspector of Police, Central Bureau of Investigation [‘CBI’ in short], Anti Corruption Branch [‘ACB’ in short] Bengaluru, has submitted a charge sheet against accused Nos.1 and 2, alleging the commission of offences punishable U/Sec.120-B of Indian Penal Code [‘IPC’ in short] and U/Sec.7, 8 and Sec.13(1)(d) r/w.13(2) of the Prevention of Corruption Act-1988 [‘PC Act’ in short].

Facts of Prosecution Case:

2. It is the case of prosecution that, the accused No.1-Sri.V.Nagaraj, a public servant, was working as Income Tax Officer, Ward-4(3), Unit Building Annexe, Bengaluru, at the time of commission of charge sheeted offences. That accused No.2-Sri.Naginchand V. Kincha, is a Chartered Accountant, based at Bengaluru. That Complainant/CW.1-Sri.A.K.Halim, is an income tax assessee with PAN No.ABOPH8910Q, was residing in JP Nagar, Bengaluru and was filing his IT returns before the ITO, Ward-4(3), Bengaluru since Assessment Year 2006-07.

3. It is the further case of prosecution that, the IT returns for the assessment year 2008-09 was filed by CW.1 on 20.01.2009 and IT returns for the assessment year 2009-10 was filed by him on 27.04.2010. That on 26.03.2010, summary assessment U/Sec.143(1) of the Income Tax Act-1961 for the assessment year 2008-09 was issued raising a demand of Rs.1,83,030/-. Further, on 9.11.2011, accused No.1-Sri.V.Nagaraj had issued an intimation u/s.143(1) raising a demand of Rs.1010/- on the IT return of CW.1-Sri.A.K.Halim for the assessment year 2009-10. Further, accused No.1-Sri.V.Nagaraj has issued a notice dated:15.06.2012 U/Sec.148 of the Income Tax Act-1961 to CW.1-Sri.A.K.Halim by intimating that his income declared for the Assessment Year 2008-2009 has escaped assessment within the meaning of Sec.147 of IT Act and further, vide letter dated:29.06.2012 accused No.1-Sri.V.Nagaraj has informed CW.1-Sri.A.K.Halim that an income of Rs.3,28,65,711/- has escaped assessment within the meaning of Sec.147 of the IT Act-1961.

4. It is the further case of prosecution that, accused No.1-Sri.V.Nagaraj, vide notice dated:05.07.2012 issued U/Sec.148 of the IT Act-1961 to CW.1- Sri.A.K.Halim; wherein it was stated that, his income for the assessment year 2009-2010 had escaped assessment within the meaning of Sec.147 of the IT Act and further directed him to furnish the details within 30 days from the date of service of the notice. Further, on 19.07.2012 a letter addressed to CW.1-Sri.A.K.Halim duly signed by accused No.1-Sri.V.Nagaraj was sent seeking the personal appearance of CW.1-Sri.A.K.Halim or appearance of any of his authorized representative on 14.08.2012 in order to seek some further information on his IT return for the assessment year 2009-10.

5. It is the further case of prosecution that, on 14.08.2012, CW.1-Sri.A.K.Halim himself appeared before accused No.1-Sri.V.Nagaraj and filed the relevant details and proof in support of the capital gain reinvestment. During the subsequent meetings of CW.1 with accused No.1, accused No.1 informed CW.1 that the actual tax liability will be around Rs.80 lakhs and if an amount of Rs.20 lakhs is paid to him as bribe, the assessment will be closed by imposing a tax of Rs.30 lakhs for both the Assessment Years. Further, between 01.09.2012 and 06.09.2012, accused No.1-Sri.V.Nagaraj called CW.1- Sri.A.K.Halim on his mobile phone and demanded for the bribe and further directed him to hand over the same to him at Bengaluru and he also informed CW.1 that the assessment order has been handed over to accused No.2- Sri.Naginchanda Kincha, the Chartered Accountant.

6. It is the further case of prosecution that, since CW.1-Sri.A.K.Halim was not interested in paying the bribe amount to accused No.1, he preferred a written complaint to CBI/ACB, Bengaluru alleging demand of bribe by accused No.1-Sri.V.Nagaraj through accused No.2-Sri.Naginchand V. Kincha, Chartered Accountant along with two CD containing the conversations taken place between him and accused No.1 & 2 from 01.09.2012 to 06.09.2012, which he had recorded in his mobile phone and later downloaded into the CD.

7. It is the further case of prosecution that, the said complaint of CW.1 was verified. After verification of the complaint, a case in RC12(A)/2012 was registered on 08.09.2012 against accused No.1-Sri.V.Nagaraj and accused No.2-Sri.Naginchanda Kincha for the offences punishable U/Sec.120-B of IPC and U/Sec.7 & 8 of the PC Act-1988.

8. It is the further case of prosecution that, during the course of investigation, a detailed Pre-Trap proceedings was carried out in the office of CBI/ACB, Bengaluru on 08.09.2012 by giving suitable instructions to all the trap team members and also to the complainant about pre-arranged signal. Further, on 08.09.2012 at about 12 PM, all the team members left the CBI office and at about 12.35 PM reached the Trap Spot; where complainant-Sri.A.K.Halim was directed to proceed to office of accused No.2 and other team members remained outside in a scattered manner waiting signal from complainant.

9. It is the further case of prosecution that, Sri.T.P.Anandakrishnan, one of the Trap Team members received a phone call from CW.1-Sri.A.K.Halim and in which he has uttered the pre-arranged signal of “please arrange train ticket”. Immediately, the TLO and the other team members rushed towards the office of accused No.2-Sri.Naginchand V.Kincha, where accused No.1- Sri.V.Nagaraj was also present. The bribe money was recovered from a Yellow Colour cover kept on the table of accused No.2-Sri.Naginchand V.Kincha. Further, an assessment order dated:06.09.2012 signed by accused No.1-Sri.V.Nagaraj raising a demand of Rs.31,86,487/- on Sri.A.K.Halim for the assessment year 2009-10 and other papers were also recovered. Thereafter, both accused were arrested.

10. It is the further case of prosecution that, thus, with intention to derive a pecuniary advantage for himself, by corrupt, illegal means and by abusing his official position as a public servant/Income Tax Officer; and during August and September, 2012 he demanded bribe from Complainant/CW.1-Sri.A.K.Halim for imposing less income tax. Further, on 08.09.2012, in furtherance of conspiracy with accused No.2-Sri. Naginchand V.Kincha, had demanded and accepted a bribe of Rs.5 lakhs from the complainant-Sri.A.K.Halim, as illegal gratification other than legal remuneration, as a motive or reward for imposing less income tax on CW.1- Sri.A.K.Halim. The above acts of Sri.V.Nagaraj and Sri.Naginchand V.Kincha would constitute the offences punishable u/s.120-B IPC and U/Sec.7, 8 and 13(2) r/w 13(1)(d) of the PC Act, 1988 and substantive offences thereof. Accordingly, the Investigation Officer has submitted a charge sheet.

11. After receipt of Charge-Sheet, this court took the cognizance of the offences punishable U/Sec.120-B of IPC and U/Sec.7, 8 and 13(2) read with Sec.13(1)(d) of PC Act against accused No.1 and 2. The Summons were issued to the accused. After service of summons, the accused Nos.1 and 2 appeared before the court through their respective counsels and they were enlarged on bail. The copy of Charge-Sheet and other materials have been provided to accused as required under Section 207 of Cr.P.C.

12. After hearing both side regarding framing of charge, the charge for the offences punishable U/Sec.120-B of IPC, U/Sec.7 and Sec.13(2) r/w.13(1)d) of PC Act, 1988 was framed against accused No.1; for the offences punishable U/Sec.120-B of IPC and U/Sec.8 of PC Act, 1988 was framed against accused No.2. After framing of charges, the accused No.1 and 2 pleaded not guilty and claimed to be tried.

13. In order to prove the case against accused persons, the prosecution has examined 17 witnesses as per PW.1 to PW.17; got marked 75 documents as per Ex.P1 to P.75 and also material objects were got marked MO.1 to MO.17. During the cross examination of prosecution witnesses Ex.D1 to D6 are got marked. After closing the prosecution side evidence, the statement of accused was recorded as provided U/Sec.313 of Cr.P.C. The accused have denied the incriminating circumstances found against them in the prosecution evidence. After recording the statement of accused, the accused No.1 and 2 have filed their separate written statements U/Sec.313(5) of Cr.P.C.

14. The Ld. Senior Public Prosecutor has relied upon the following case authorities.

1. Dr. V.Sebastian Vs. The State [1988 Crl.L.J.1150].

2. Madhukar Bhaskarrao Joshi Vs. State of Maharashtra [AIR 2001 SC 147].

3. B.Noha Vs. State of Kerala [(2006) 12 SCC 277.

4. State of AP Vs. Kommaraju Gopala Krishna Murthy [2000 (9) SCC 752.

5. M. Narasinga Rao Vs. State of AP [2001(1) SCC].

6. Krishna Ram Vs. State of Rajasthan [2009 (11) SCC 708]

7. Hazarilal Vs. Delhi Administration [1980 SCC (2) 390]

8. Mohanan Nair Vs. State of Kerala [1989 Cri.L.J. 2106 Ker]

9. Vadivelu Thevar Vs. State of Madras [1957 SCJ 527]

15. The learned counsel for accused No.1 has relied upon the following case authorities.

1. K.Shantamma Vs. State of Telangana [(2022) 4 SCC 574]

2. P.Somaraju Vs. State of Andhra Pradesh [2025 SCC OnLine SC 2291]

3. Prabhugowda Patil Vs. State of Karnataka [High Court of Karnataka/ Crl.P.No.5163/2023].

16. The learned counsel for accused No.2 has relied upon the following authorities;

1. S. Pratap Singh Vs. The State of Punjab [AIR 1964 SC 72:(1964) 4 SCR 753].

2. Yusufalli Esmail Nagree Vs. State of Maharashtra [(1967) 3 SCR 720: AIR 1968 SC 147].

3. Sri. N.Sri Rama Reddy V/s. V.V.Giri [1970(2) SCC 340: AIR 1972 SC 1162].

4. R.M.Malkani Vs. State of Maharashtra [(1973) 1 SCC 471: AIR 1973 SC 157].

5. Ziyaddin Burhanuddin Bukhari Vs. Brijmohan Ramdass Mehra [(1976) 2 SCC 17].

6. Ram Singh and Others Vs. Col.Ram Singh [1985 (Supp) SCC 611: AIR 1986 SC 3].

7. Tukram S. Dighole Vs. Manikrao Shivaji Kokate [(2010) 4 SCC 329].

8. State (NCT of Delhi Vs. Navjot Sandhu @ Apsan Guru [(2005) 11 SCC 600].

9. Nilesh Dinkar Pradkar Vs. State of Maharashtra [(2011) 4 SCC 143].

10. Tomaso Bruno and another Vs. State of Uttar Pradesh [(2015) 7 SCC 178].

11. Sonu @ Amar Vs. State of Haryana [(2017) 8 SCC 570].

12. Shafhi Mohammed Vs. State of Himachal Pradesh [(2018) 2 SCC 801].

13. Mahabir Prasad Verma Vs. Dr. Surinder Kaur [1982(2) SCC 358].

14. Anwar P.V. Vs. P.K.Basheer and Others [(2014) 10 SCC 473].

15. Arjun Panditrao Khotkar Vs. Kailash Kushanrao Gorantyal and Others [(2020) 7 SCC 1].

16. Suraj Mal Vs. State (Delhi Administration) [(1979) 4 SCC 725].

17. Golbar Hassan & Others Vs. State of Assam [(2015 SAR (Criminal) 611 Supreme Court].

18. Radhey Shyam Vs. State of Rajasthan [(2014) 2 SCC (Cri) 600].

19. Baliraj Singh Vs. State of MP [2017 SAR (Crl) 657].

20. State of UP Vs. A.K.Gaba & Others [2026 SCC Online SC 967].

21. B.H.Narasimha Rao Vs. Government of A.P. Represented by CBI [1995 Supp (4) SCC 704].

22. CBI Vs. Baljeet Singh [SLP (Crl) No.12486/2025].

23. Babji Vs. State of Andhra Pradesh [(2018) 17 SCC 732].

24. Neeraj Dutta Vs. State (Govt. of NCT of Delhi) [(2023) 4 SCC 731].

25. Survu Parshaish Vs. State of A.P. [2006 Cri.L.J.824].

26. Muddoru Rajappa Tipanna Vs. State of Karnataka [2015 (3) AKR 31].

27. Chandrika Vs. CBI [2013 (6) KLJ 490].

28. R. Malini Vs. State of Karnataka [2012(1) KCCR 414].

29. Kallyan Kumar Gogia Vs. Ashutosh Agnihotri and another [AIR 2011 SC 760].

30. S.R.Ramaraj Vs. Spl. Court Bambay [(2003) 7 SCC 175].

31. LIC of India and Another Vs. Rampal Singh Bisen [2010 AIR SCW 1900].

32. Smt. Yeshodha Vs. Smt. K.Sobha Rani [2007 AIR SCW 2713].

33. Meena (smt) w/o. Balwant Hemke Vs. State of Maharashtra [(2000) 5 SCC 21].

34. Banarasi Dass Vs. State of Haryana [(2010) 4 SCC 450].

35. P. Sirajuddin Etc., Vs. State of Madras [(1970) 1 SCC 595].

36. Umesh Patil Vs. State of Karnataka [Crl.A.No.2760 of 2012- High Court of Karnataka].

37. Mahabir Prasad Verma Vs. Dr.Surinder Kaur [(1982) 2 SCC 258].

17. Heard both side. Perused all the records.

18. For disposal of this case, the points that would arise for my consideration are as under;

1. Whether the Sanction obtained U/Sec.19 of PC Act to prosecute the accused No.1-Public Servant for the alleged offences, is valid one and in accordance with law?

2. Whether the prosecution proves beyond all reasonable doubt that, Accused No.1-Sri.V.Nagaraj, being a public servant as Income Tax Officer, Ward No.4(3), Unity Building Annexe, Bengaluru, entered into a criminal conspiracy with Accused No.2- Sri.Naginchand Kincha, a Chartered Accountant; and in pursuance of said conspiracy, the accused No.1 in response to the Income Tax returns submitted by CW.1-Sri.A.K.Halim, had called CW.1 for explanation in respect of the capital gain of Rs.3,28,65,711/- and demanded illegal gratification of Rs.20,00,000/- from CW.1 in order to reduce said Income Tax on capital gain to the extent of Rs.30 lakhs instead of legal tax of around Rs.80 lakhs and further, in pursuance of said criminal conspiracy with Accused No.1, Accused No.2, called CW.1 on 05.09.2012 and asked him to pay the said bribe amount to be payable to Accused No.1; and further, in pursuance of said conspiracy, accused No.1 and 2 again called CW.1-Sri.A.K.Halim on 06.09.2012 at 5.30 PM in the office of Accused No.2 and once again demanded the illegal bribe of Rs.20 lakhs in order to illegally pass an assessment order; and further, on 08.09.2012 Accused No.2 has received and accepted the bribe of Rs.5,00,000/- from CW.1-Sri.A.K.Halim on behalf of Accused No.2 to pass an illegal assessment order in favour of CW.1 and thereby accused No.1 and 2 have committed an offence of criminal conspiracy punishable U/Sec.120-B of IPC?

3. Whether the prosecution further proves beyond all reasonable doubt that, Accused No.1 being a public servant as Income Tax Officer, has issued a notice u/s.143(2) of Income Act to CW.1 in order to include the capital gain as an income in the Income Tax Returns for AY 2009-10 and further, on giving explanation by CW.1, accused No.1 told CW.1 that Income Tax will be assessed about around Rs.80,00,000/- and Accused No.1 has illegally demanded bribe of Rs.20 lakhs, in order to close the said Income Tax Assessment of CW.1 for the assessment year 2009-10 by imposing a meager tax of Rs.30 lakhs; and further, in pursuance to the said demand, Accused No.1 has illegally accepted the bribe i.e., illegal gratification of Rs.5 Lakh from CW.1 through Accused No.2 in respect of the assessment of tax of CW.1 for AY 2009-10 on 08.09.2012 in between 12 hours to 13.30 hours at the office of the accused No.2, thereby Accused No.1 has demanded and accepted illegal gratification from CW.1 to do illegal act by abusing his official position and thereby Accused No.1 has committed offence punishable U/Sec.7 of the Prevention of Corruption Act, 1988?

4. Whether the prosecution further proves beyond all reasonable doubt that, the accused No.2, being a private person and Chartered Accountant in collusion with the accused No.1 has demanded an illegal gratification of Rs.20,00,000/- from CW.1 in respect of his AY 2009-10 in order to clear the said Income Tax assessment by imposing a meager tax of Rs.30 lakhs instead of Rs.80 lakhs, thereby Accused No.2 in order to induce accused No.1 to close the said Income Tax Assessment file of CW.1 for AY 2009-10, has demanded Rs.20 lakhs from CW.1 during the last week of August 2008 and in pursuance of the said demand, accused No.2 along with accused No.1, in view of said criminal conspiracy have accepted a bribe of Rs.5 lakhs from CW.1 at his office payable to accused No.1 in between 12 Noon to 1.30 Hours on 08.09.2012 which has been seized by the Trap Laying Officer of CBI, ACB, Bengaluru and thereby Accused No.2 has committed an offence punishable U/Sec.8 of the Prevention of Corruption Act, 1988?

5. Whether the prosecution further proves beyond all reasonable doubt that, accused No.1 being a public servant as Income Tax Officer in pursuance of criminal conspiracy with accused No.2, has misused and abused his official position during the period of 19.07.2012 to 08.09.2012, demanded Rs.20 lakhs as illegal gratification from CW.1 other than legal remuneration, in order to clear off the Income Tax Assessment of CW.1 for AY 2009-10 and in pursuance of said criminal conspiracy and demand made by him, accepted a bribe i.e. illegal gratification of Rs.5 lakhs from CW.1 other than the legal remuneration through accused No.2 on 08.09.2012 at the office of accused No.2 and thereby accused No.1 has committed the offence of criminal misconduct punishable U/Sec.13(2) r/w. 13(1)(d) of PC Act, 1988?

6. What order?

19. My findings to the above stated points are as as under;

Point No.1: In the Affirmative

Point No.2: In the Affirmative

Point No.3: In the Affirmative

Point No.4: In the Affirmative

Point No.5: In the Affirmative

Point No.6: As per the final order for the following;

REASONS

20. Point No.1: This point is with respect to sanction granted to prosecute the accused No.1-Sri. Sri.V.Nagaraj. The accused No.1 was a public servant worked as Income Tax Officer at Ward No.4(3), Unity Building Annexe, Bengaluru during the time of commission of charge sheeted offences; hence, in order to prosecute him for the charge-sheeted offences, it is necessary for the prosecution to obtain sanction from the concerned competent authority as provided U/Sec.19 of PC Act. That under Sec.19 of PC Act, Sanction is to be given by the Government or the authority which would be competent to remove the public servant from his office.

21. Admittedly, the accused No.1-Sri.V.Nagaraj, during the significant point of time i.e. from 23.04.2010 till the date of his suspension [as per order dated:10.09.2012] functioned as Income Tax Officer, Ward No.4(3), Unity Building Annexe, Bengaluru. As per evidence on record, the designation and employment of accused No.1-Sri.V.Nagaraj as Income Tax Officer under the Central Government are not in dispute. As such, the accused No.1, being a public servant, during the relevant period of time, as defined U/Sec.2 of the PC Act, falls under the ambit of Section 19 of the PC Act. Thus, a valid sanction is pre-requisite to launch prosecution against him, for the offences punishable U/Sec.120-B of IPC and U/Secs.7 and 13(2) read with Section 13(1)(d) of the Prevention of Corruption Act-1988.

22. In the case on hand, the sanction order has been marked as per Ex.P72. That the sanction as per Ex.P72 has been granted by one Sri.Ashutosh Chandra, then Commissioner of Income Tax, Bengaluru II, Bengaluru. He has been examined in the case as PW.14. According to PW.14, during the year 2013, he was Commissioner of Income Tax, Bengaluru II and Ward No.4(3) [where accused No.1 was functioning as Income Tax Officer] was within his jurisdiction. Further, as per his evidence, for the purpose of disciplinary proceedings, income tax officers were within his jurisdiction. Further, he states that, he had derived power for disciplinary proceedings by the notification issued by the Ministry of Finance, Central Board for Direct Taxes, Government of India and disciplinary proceedings also include the Sanction for prosecution.

23. As accused No.1 functioned as Income Tax Officer, Ward No.4(3), Unity Building Annexe, Bengaluru from 23.04.2010 till the date of his suspension [as per dated:10.09.2012]; therefore, PW.14-Sri.Ashutosh Chandra, who being the Commissioner of Income Tax, Bengaluru II, Bengaluru, had the power to accord sanction to launch criminal prosecution against accused No.1, who comes under the control of PW.14; as such, PW.14 is the competent authority to remove accused No.1 from his service acting under power as per notification issued by Central Board of Direct Taxes [CBDT], Ministry of Finance, Government of India, and accordingly, he has accorded sanction against accused No.1.

24. At this juncture, it is apt to appreciate the evidence of PW.14 and the contents of Ex.P72-Sanction order, in order to know whether PW.14 had applied his mind to the material or documents placed before him or not, while granting the sanction to prosecute the accused No.1. In his evidence, PW.14 has deposed that, a complaint had been received from CBI on 04.06.2013 seeking sanction order for prosecution of Sri.V.Nagaraj [i.e. accused No.1] who was Income Tax Officer at Ward No.4(3). Further, in his chief examination, this witness has stated the gist of allegation levelled against accused No.1. He further deposed that, along with CBI complaint, letter of request, voluminous documents in 4 Volumes were also submitted which included inter-alia the complaint, FIR, Final Report, Entrustment Mahazar, Statements, list of other items, assessment records and details pertaining to Sri.A.K.Halim’s assessments. He further deposed that, the entire record was gone through by him before according Sanction on 04.07.2013. He further deposed that, considering the details mentioned in the complaint regarding demand of money for reducing the income tax, the conversation recorded and sent in two CDs to the CBI, the proceedings of search wherein the money was actually handed over to Sri.Naginchand Kincha [i.e. accused No.2] in the presence of ITO- Sri.V.Nagaraj [i.e. accused No.1], the statement of Sri.Naginchand Kincha that it was accepted on behalf of ITO and subsequent statements recorded from different persons; it appeared to him that, there was much substance in the report received for which Sanction should be accorded for prosecution; and accordingly, he has accorded sanction on 04.07.2013. This witness has identified his Sanction order marked at Ex.P72 and he also identified his signature found in Ex.P72 as per Ex.P72(a). Further, this witness has identified Gazette Notification dated:07.10.1988 as per Ex.P73 which confers power on the witness i.e. Commissioner of Income Tax to appoint and to impose penalties in respect of Income Tax Officers.

25. The learned counsel for the accused No.1 has cross examined this witness in detail. Though the learned counsel has cross examined this witness at length; but no relevant suggestions were put to the witness in order to elicit that the sanction order of the witness is not in accordance with law, except putting the plain suggestions to the effect that, there is no prima-facie case against accused No.1-Sri.V.Nagaraj warranting sanction order; Ex.P72 sanction order is based upon a draft sent by the CBI; Ex.P72 sanction order is against the facts and circumstances of the case; and he had no power to accord sanction to prosecute accused No.1 and Etc. It is true that, this witness has admitted a suggestion that he is not appointing authority for accused No.1 but as per Ex.P73-Notification, Commissioner of Income Tax is the appointing authority for Income Tax Officers and Commissioner of Income Tax is also the competent authority to impose penalties. As the witness was then Commissioner of Income Tax and accused No.1 was serving as Income Tax Officer under his jurisdiction; therefore, PW.14 had the power to impose penalties including granting of sanction as per Ex.P73. Moreover, the defense side have not at all denied Ex.P73 during the cross examination of this witness. Therefore, the admission of the witness that he is not appointing authority for accused No.1 would not come in the way of according sanction by this witness. Therefore, on perusal of entire cross examination of PW.14, it is seen that, nothing worth has been elicited from the mouth of the witness, so as to show that his sanction is not in accordance with law.

26. The learned counsel for the accused No.1 has argued that sanction order issued by PW.14 under Section 19 of the PC Act is not a valid sanction and it is not in accordance with law. However, except arguing that sanction order is not in accordance with law, the learned counsel has not demonstrated before this court as to how the sanction order is not valid one and not in accordance with law.

27. In case of State (NCT of Delhi) Vs. Navjot Sandhu reported in (2005) 11 SCC 600, the Hon’ble Supreme Court has held that, “The grant of sanction is an executive act and validity thereof cannot be decided in the light principles applied to quasi judicial order. There are four tests to be applied while dealing with validity of sanction order; Firstly, the sanction order has been passed by competent authority; Secondly, all the relevant evidence, both against and in favour of the accused, should be placed before sanctioning authority; Thirdly, Sanctioning Authority should have applied its mind to conclude that the accused should be prosecuted; Fourthly, the application of mind should be objective and impartial and not at the behest of any other authority. In case, after going through all the relevant evidence, a prima facie case is made out against the accused, the sanctioning authority can grant sanction.”

28. Further, in the case of CBI Vs. Ashok Kumar Agarwal reported in 2014 (84) ACC 252 [Crl.A.No.1838/2013], the Hon’ble Supreme Court has observed that,

“………..Therefore, the order of sanction must ex facie disclose that the sanctioning authority had considered the evidence and other material placed before it. In every individual case, the prosecution has to establish and satisfy the court by leading evidence that those facts were placed before the sanctioning authority and the authority had applied its mind on the same. If the sanction order on its face indicates that all relevant material i.e. FIR, disclose statements, recovery memos and other material on record were placed before the sanctioning authority and if it is further discernible from the recital of sanction order that the sanctioning authority perused all the material, an inference may be drawn that the sanction had been granted in accordance with law.”

29. Further more, in the case of State of Maharashtra V/s. Mahesh G. Jain, reported in (2013) 8 SCC 119, the Hon’ble Supreme Court held that;

“Grant of sanction U/Sec.19(1) of the Prevention of Corruption Act-1988 for prosecution is administrative function and only prima facie satisfaction of the sanctioning authority is needed”.

30. Thus, in the background of principles laid down in the above cited decisions, when we examine the prosecution case on the point of sanction, it would go to show that, the prosecution has satisfied this court by leading evidence on sanction order that PW.14 is the competent authority to accord sanction and said sanctioning authority had applied its mind on the materials produced by the CBI/prosecution. That PW.14, who is author of Ex.P72-Sanction Order, has specifically deposed that the entire record was gone through by him before according sanction and he found much substance in the report received for purpose of sanction. Thus, it is clear that, PW.14 has gone through all the records placed before him and thereby he applied his mind to the materials produced by the CBI/prosecution. Further, on perusal of contents of Ex.P72 i.e. sanction order which runs into 7 pages, it is seen that, PW.14, who being the competent authority to remove accused No.1 from service, carefully examined the FIR, statement of witnesses, all other documents and list of material objects, and applied his mind on the said materials placed before him and accordingly, granted the sanction for prosecuting the accused No.1.

31. Thus, on mindful reading of evidence of PW.14 and contents of Sanction order marked at Ex.P72, it is very clear that, the sanctioning authority has considered all the relevant materials and after having satisfied as to prima-facie case made out against the accused No.1 for prosecuting him; accordingly, PW.14 has issued sanction order marked at Ex.P72. Hence, this court is of the considered opinion that the prosecution has proved that sanction accorded by the PW.14 to prosecute accused No.1 with regard to the offences charged against him, is valid one and in accordance with law. Accordingly, I answered the Point No.1 in the Affirmative.

32. Points No.2 to 5:- It is heavy cast burden on the prosecution to prove beyond all reasonable doubt that, the accused No.1-Sri.V.Nagaraj, being a public servant, while working as Income Tax Officer, Ward No.4(3), Unity Building Annexe, Bengaluru, has criminally conspired with accused No.2-Sri.Naginchand V. Kincha, a chartered accountant based at Bengaluru, in order to do an illegal act and with an intention to derive pecuniary advantage for himself; and in pursuance of said conspiracy, the accused No.1, being the Income Tax Officer, having authority and power to assess the Income Tax of complainant/CW.1-Sri.A.K.Halim for the AY 2009- 10, had called upon CW.1 for explanation in respect of the capital gain of Rs.3,28,65,711/- relating to Income Tax returns submitted by CW.1 for the Assessment Year 2009-10 and had illegally demanded the bribe i.e. illegal gratification to the tune of Rs.20,00,000/- from CW.1 in order to reduce the Income Tax on capital gain to the extent of Rs.30 lakhs instead of legal tax of around Rs.80 lakhs; and on 08.09.2012, in conspiracy with accused No.2, the accused No.1 has accepted an illegal gratification of Rs.5,00,000/- from CW.1-Sri.A.K.Halim through accused No.2 in the office of accused No.2 as illegal gratification other than legal remuneration as a motive or reward for imposing less income tax on CW.1, by abusing his official position and further, the accused No.2, being a private person and Chartered Accountant in collusion with the accused No.1, has demanded Rs.20,00,000/- from CW.1 on behalf of accused No.1 in order to close his Income Tax Assessment file for Assessment Year 2009-10 by imposing a meager tax of Rs.30 lakhs instead of Rs.80 lakhs, and in pursuance of the said demand, accused No.2 along with accused No.1, has received/accepted a bribe of Rs.5 lakhs from CW.1 at his office, which is payable to accused No.1 in between 12 Noon to 1.30 hours on 08.09.2012 and subsquently, said bribe money was seized by the Trap Laying Officer- CW.2 and thereby accused No.1 and 2 have committed the offences punishable U/Sec.120-B of IPC and U/Sec.7, 8 and Sec.13(2) r/w 13(1)(d) of PC Act, 1988.

Charge framed against Accused No.1:

33. Thus, on the basis of charge sheet material, this court has framed the charge against accused No.1 for the offences punishable U/Sec.120-B of IPC and U/Sec.7 and 13(2) read with Sec.13(1)(d) of Prevention of Corruption Act-1988.

Charge framed against Accused No.2:

34. The charge against accused No.2 has been framed for the offence punishable U/Sec.120-B of IPC and U/Sec.8 of Prevention of Corruption Act-1988.

35. Before proceeding further, let me note here the arguments advanced by the prosecution as well as defense side.

Argument on behalf of Prosecution:

36. Learned Senior Public Prosecutor Sri. Arun K. Antony for CBI has argued that the Prosecution has established its case against accused No.1 and 2, beyond all reasonable doubt. He argued that there is overwhelming evidence to establish that the accused No.1 and 2 have entered into a criminal conspiracy and committed the charge sheeted offences. That the complainant-PW.1 has fully supported the prosecution case and his testimony has not been shaken by the defense, deposed in respect of demand and acceptance of illegal gratification.

37. He further argued that, the evidence of PW.1 is supported by the evidence of PW.2, who is an independent witness to the Trap Proceedings. Added to this, the evidence of Trap Laying Officer-PW.9 also corroborates the testimony of complainant-PW.1 and independent witness-PW.2, in respect of trap of accused No.1 and 2. He further argued that although, there are minor discrepancies in the testimony of the complainant but the same are not fatal to the prosecution case in any manner. He argued that minor discrepancies are bound to occur in the testimony of a witness but the same do not raise any doubt over his veracity.

38. He further argued that the testimony of complainant also finds corroboration from the recorded conversations; and the testimonies of the complainant and independent witness, read in the light of the transcripts of the recorded conversations, leave no scope for doubt that accused No.1 demanded the bribe and accused No.2 has received and accepted it from PW.1- Complainant on behalf of accused No.1. Therefore, the testimony of the PW.1-complainant supported by PW.2- Independent Witness is reliable and creditworthy and there is no reason to disbelieve his testimony.

39. He further argued that the tainted currency notes of Rs.5 Lakh were recovered from the possession of accused No.2; and PW.2-the independent witness has also confirmed that the recovery of bribe amount from accused No.2. The traces of phenolphthalein powder were found in the hand washes of accused No.2 and the CFSL report discloses a positive finding about the presence of phenolphthalein powder in the hand wash solution of accused No.2 and this fact further corroborates the version of complainant that the bribe was accepted by accused No.2 on behalf of accused No.1. He argued that, once it is proved that the bribe money was recovered from accused No.2, then the burden of presumption as contemplated U/Sec.20 of PC Act shifts upon the accused No.1 and 2, but they have not discharged said burden with convincing evidence. That the explanations given by the accused No.1 and 2 in their written statements filed U/Sec.313(5) of Cr.P.C., are not probable and reasonable as to recovery of bribe amount of Rs.5 Lakh from the possession of accused No.2 on the day of Trap.

40. The learned Public Prosecutor further argued that, the Call Detail Records of mobile phones of complainant-PW.1 and accused No.1 and 2 demonstrate that the calls were made at the relevant time by the accused No.1 to PW.1 and vice versa and accused No.1 to accused No.2 vice versa, as the same stand duly reflected in the Call Detail Record marked at Ex.P43, P45 and P50. Thus, call detail records marked at Ex.P43, P45 and P50 prove the very conspiracy between accused No.1 and 2. Therefore, the entire defense taken by the accused No.1 and 2 does not inspire the confidence of court. Thus, it is argued that, the charges against No.1 and 2 are proved beyond all reasonable doubt and therefore, the accused No.1 and 2 shall be convicted.

Argument on behalf of Accused No.1:

41. Sri. Shankarappa S., learned counsel for accused No.1 has argued that, the accused No.1 was falsely implicated in the case on hand on the basis of false complaint of PW.1. First of all, PW.1-complainant had no jurisdiction to file his IT returns in Karnataka at Ward No.4(3), Bengaluru, as he never resided in the state of Karnataka. There is no any piece of paper produced by the PW.1 to show that he was resided in Bengaluru, Karnataka for the period of his assessment year in question. Further, PW.1 has claimed that he is a Chartered Accountant by profession, but in this regard also, he has not produced any documents. Therefore, the credibility of his claim of staying in Bengaluru and that of his claimed profession as chartered accountant are doubtful.

42. The learned counsel further argued that, in the case on hand, the prosecution has not at all proved the Demand and Acceptance as against accused No.1 and there was no work pending with him as on the date of alleged trap; therefore, the charge U/Sec.7 of PC Act- 1988 is not established. He further argued that, it is stated that, MO.1 and MO.2 are the two CDs having conversation of accused No.1 & 2 and PW.1, but said two CDs are not supported by the certificate as per sec.65-B of Indian Evidence Act. Moreover, the Mobile Phone, which was allegedly used for recording the conversation as per MO.1 and MO.2, has not been produced before the court, which is primary evidence. Therefore, non- production of said Mobile Phone of PW.1, which is primary evidence is fatal to the prosecution case. Further, the I.O. has not seized the CCTV Footage of office building of accused No.2 on the date of alleged incident, in order to show that the trap team has visited the office of accused No.2.

43. It is further argued that, there was no work pending with accused No.1 as the assessment order was already passed by the accused No.1 on 06.09.2012 itself. As there is no materials to prove the work of PW.1 pending with accused No.1 as on the date of alleged trap; as such, the charge under section 7 of PC Act does not sustainable against accused No.1. That the accused No.1 never called PW.1-complainant on 01.09.2012 or on 02.09.2012 as alleged by the prosecution as it is evident from the CDRs produced by the prosecution itself.

44. It is further argued that, accused No.1 had been to the office of accused No.2 on 08.09.2012 i.e. on the alleged date of trap, along with his son only to meet accused No.2 and express his gratitude to accused No.2 as he had helped him in getting medical treatment for his mother-in-law at Mahaveer Jain Hospital, Bengaluru and also to seek the refund of payment made in cash to the said Hospital as his mother-in-law had cashless insurance facility; and when the accused No.1 was talking with accused No.2 in his office in that regard, suddenly a group of men entered the office room of accused No.2 and informed that they were from CBI and thereafter, took hands washes and arrested him and accused No.2 for without any reason.

45. It is further argued that, at no point of time, accused No.1 has never demanded any illegal gratification from PW.1-complainant. Contrary, with an intention to escape the tax liability of Rs.31,86,487/- mentioned in the assessment order dated:06.09.2012 passed by accused No.1, the complainant-Sri.A.K.Halim has filed this false and frivolous complaint against accused No.1.

46. It is further argued that, there is no consistency in the evidence of PW.1 and he has admitted material facts in his cross examination with respect to his complaint and other things which would go to the very root of the prosecution case. Further, PW.1 being the interested witness, whose evidence is not corroborated by the independent evidence so far as demand of bribe is considered. Moreover, in the absence of shadow witness having accompanied PW.1 to the office room of accused No.2 and having not seen the handing over of bribe amount to the hands of accused No.2, the sole evidence of PW.1 cannot be relied upon in order to record conviction against accused No.1 for the offence under section 7 of PC Act, in view of settled principles of law.

47. Lastly, it is argued by the learned counsel for the accused No.1 that, the presumption under section 20 of PC Act is legal and rebuttable presumption and it does not to apply to Sec.13 (1) (d) of PC Act. Further, as the prosecution has not established its case against accused No.1 so far demand and acceptance of bribe amount is concerned; therefore, there is no question of invoking section 20 of PC Act against accused No.1. With this line of argument, the learned counsel for the accused No.1 prays for acquittal of accused No.1.

Argument on behalf of Accused No.2:

48. Sri. Kiran S. Javali, the learned Senior Counsel on behalf of Sri. S.H.Mane Advocate for accused No.2, has vehemently argued that, so far as accused No.2 is concerned, there is no material produced by the prosecution to show any demand for illegal gratification by the accused No.2 in the light of Sec.8 of PC Act. In the absence of such material, the invocation of Sec.8 of PC Act against accused No.2 is illegal and ingredients to establish inducement by corrupt or illegal or attempts to obtain from any person to do or forebear to do any official act is not all established by the prosecution.

49. The learned senior counsel further argued that, it is seen from the prosecution evidence that the accused No.2 had not represented PW.1-Sri.A.K.Halim in any proceedings before accused No.1 and no material has been brought on record to show as to when the purported demand for illegal gratification arose or was made by the accused No.1. In the absence of specific material to establish the foundational facts of demand and acceptance, the prosecution case fails against accused No.2.

50. It is further argued that, at the time of alleged incident, the accused No.1 had come to the office of accused No.2 to seek assistance in settling medical bills to Mahaveer Jain Hospital, Bengaluru; wherein the mother-in-law of accused No.1 was required to be admitted for the treatment of her critical condition in the Hospital, as accused No.2 was one of the associates in the said Hospital and he was helping accused No.1 in the medical emergency of his mother-in-law. Therefore, in this background, when accused No.1 visited the office of accused No.2 on the day of alleged incident; at that time, Complainant-PW.1 had bought money for payment of tax to be paid to the Income Tax Department through office of accused No.2, but accused No.2 refused to accept the same and told PW.1 to make payment himself to the IT Department directly; and consequently, as revealed from the recovery Mahazar, the amount was found on the table of accused No.2. But no witness has been examined to corroborate the deposition of PW.1.

51. It is further argued that, the evidence of PW.1/complainant is not clear at all and it is contradictory in nature. It is because, there is contradiction with respect to the very averment of complaint-Ex.P1 itself and this is for the reason that, as seen from Ex.P1, it is a typed complaint; whereas, PW.1 has deposed in his evidence that it was a handwritten complaint. Therefore, this factor has not been clarified by the prosecution; as such, the evidence and complaint of PW.1 is not believable.

52. It is further argued that, PW.1/complainant wanted the Tax amount to be paid by the office of accused No.2, but the same was refused by the accused No.2. As per Recovery Mahazar, the amount was found on the table of accused No.2; but no witness has been examined to corroborate the testimony of PW.1 in this regard. As such, no demand of any illegal gratification and no acceptance of the same by the accused No.2 on behalf of accused No.1.

53. It is further argued that, there was no official work was pending with accused No.1, as Assessment Order-Ex.P16 for the Assessment Year 2009-10 is dated:06.09.2012 but the alleged trap is dated:08.09.2012. Thus, there was no pending official act and no discretion left to be exercised consequently; therefore, there is no question of neither demand of illegal gratification by the accused No.1 nor inducing the public servant-accused No.1 by the accused No.2 seeking official favour to PW.1. Hence, the very basic ingredients of Sec.7 of PC Act are not established and consequently, there is no case for the offence U/Sec.8 of PC Act against accused No.2.

54. It is further argued that, the ingredients of inducement by corrupt or illegal means is totally absent in the charge leveled against accused No.2 as Sec.8 of PC Act is not attracted by the receipt of money simpliciter. That inducement must be by corrupt or illegal means but the prosecution has not led no evidence of what corrupt or illegal means accused No.2 is said to have employed or proposed to employ upon accused No.1. Hence, there is no case against accused No.2 for the offence punishable under section 8 of PC Act.

55. It is further argued that, in the absence of any demand for illegal gratification by the accused No.1 and there being no acceptance of the illegal gratification by the accused No.1, the invocation of the provisions of Section 7 of the PC Act, does not arise and when any of the ingredients required for invocation of Section 7 of the PC Act are absent, then there is no case for the offence under Section 7 of PC Act. When there is no cogent and convincing evidence to prove demand and acceptance of illegal gratification by the accused No.2; then the requirements of Section 20 of the PC Act are not fulfilled; as such no presumption is available against accused No.2 since Sec.20 (1) of PC Act permits a presumption only in a trial of an offence U/Sec.7, 11 and Sec.13(1) (a) or (b). Therefore, there is no any presumption in respect of offence under Sec.8 of PC Act.

57. It is further argued that, it is accepted fact by all the witnesses examined by the prosecution that, the accused No.2 had not represented PW.1 in any proceedings before the accused No.1. Further, it is also an admitted fact as brought on record by the prosecution that there was no demand by the accused No.2 from PW.1 in the light of the provisions of Section 8 of the PC Act. Therefore, in the absence of such material, the invocation of Section 8 of PC Act and ingredients to establish inducement by corrupt or illegal or attempts to obtain from any person to do or forebear to do any official act is not established. Thus, in the light of this position, the accused No.2 is liable to be acquitted of charges levelled.

58. It is further argued that, the ingredients required for invocation of Section 7 of the PC Act, are totally absent in the case on hand. It is clear from the evidence brought on record that there is no acceptance of the illegal gratification by the accused No.1 and consequently the requirements of Section 20 of the PC Act, are not fulfilled. With respect to the accused No.2, admittedly no material to show in the light of Section 8 of the PC Act, of any demand for illegal gratification and the accused No.2 denies acceptance of the illegal gratification.

59. Lastly, it is argued that, the prosecution has not established the case at all against accused No.2; hence, the accused No.2 is entitled for acquittal as the entire case of the prosecution as contended in the charge has not been established beyond reasonable doubt. On the contrary, the entire case is highly suspicious in nature as far as alleged demand, acceptance and recovery consequently alleged seizure itself is highly doubtful. Accordingly, it is prayed to acquit the accused No.2.

60. In the background of rival contentions/arguments of both side, now, let me move towards the prosecution evidence. Before proceeding to the prosecution evidence, at this juncture, let me state in brief regarding the Complaint, Complaint Verification Report, FIR, Entrustment Mahazar/Pre-Trap Proceeding, and Recovery Mahazar i.e. Post-Trap Proceeding.

The Complaint:

61. CW.1-Sri.A.K.Halim, is the person who has set the criminal law into motion by lodging a complaint against accused No.1 and 2. His complaint is marked as Ex.P1 in the case on hand.

61.1. The Complaint of CW.1-Complainant discloses that, he is resident of Kerala and a chartered accountant by profession. As he was residing in J.P.Nagar, Bengaluru; therefore, he started filing his IT Returns in Bengaluru from 2006 onwards. In 2008, he had sold his immovable property in Cochin [or Kochi] and all details pertaining to said property were disclosed in his IT Returns.

61.2. The complaint-Ex.P1 further shows that, in July-2011, accused No.1-Sri.V.Nagaraj, who was working as Income Tax Officer, Ward 4(3), Bengaluru had issued a notice dated:15.06.2012 to him; where-under, it was intimated that his income declared for the Assessment Year 2008-09 has escaped assessment within meaning of Sec.147 of IT Act. Further, accused No.1 sent another notice dated:29.06.2012; under-which, it was informed him that capital gain to an extent of Rs.03,28,65,711/- stands unexplained and income needs to be brought to tax. Further, on 19.07.2012, CW.1 received another notice from accused No.1 intimating the reasons for reopening of his assessment for the Assessment Year 2009-10 and stated that the sale deed is only for a vacant land and no building was there whereby disallowing an amount of Rs.1,85,38,610 and Rs.3,08,28,643/-.

61.3. The complaint-Ex.P1 further discloses that, in the last week of August 2012, he met accused No.1 in his office and he told him that, in his assessment matter there is lot of anomalies and he informed that actual tax amount will be around Rs.80 Lakh and if he pays Rs.20 Lakh as bribe, his file will be closed by imposing tax of Rs.30 Lakh. Further, on 01.09.2012 and 02.09.2012, CW.1 received calls from accused No.1 on his phone and again, he demanded bribe and also informed that assessment order was handed over to accused No.2- Sri.Naginchand Kincha.

61.4. The complaint-Ex.P1 further discloses that, accordingly, CW.1-complainant spoke to accused No.2, he asked him about bribe amount and also informed him to meet him on 06.09.2012 at his office. Accordingly, CW.1 met accused No.2 at his office where accused No.2 called accused No.1 and thereafter, CW.1 was asked to bring the bribe money on 07.09.2012 to office of accused No.2 and collect the assessment order.

61.5. The complaint-Ex.P1 further discloses that, the conversation between himself and accused No.1 & 2, from 01.09.2012 to 06.09.2012, was recorded by CW.1 in his mobile and the same was transferred to CDs. Since CW.1-complainant was not willing to pay the bribe to accused No.1 through accused No.2; hence, he decided to lodge a complaint against the accused. Accordingly, he lodged a written complaint before CBI, ACB, Bengaluru on 07.09.2012, as per Ex.P1.

Complaint Verification Report:

62. The complaint dated:07.09.2012 lodged by CW.1 was entrusted to CW.2-R.K.Shivanna, Inspector of Police, CBI/ACB, Bengaluru, for verification. As per complaint verification report which is marked at Ex.P53, CW.2 started verification of the complaint through his sources and found that the allegations made in the complaint are genuine; and it is revealed that, the reputation of accused No.1-Sri.V.Nagaraj is very bad and he is in habit of taking illegal gratification for doing official work and also there is unholy nexus between accused No.1 and accused No.2-Sri.Naginchand Kincha, Chartered Accountant. Further, during verification of complaint, it is also revealed that, the issue pertaining to complaint is pending with accused No.1-Sri.V.Nagaraj.

First Information Report:

63. Thus, based on the complaint-Ex.P1 lodged by CW.1 and Complaint Verification Report-Ex.P53 submitted by CW.2, the FIR came to be registered in RC.12(A)/2012 on 08.09.2012 by the CBI, ACB Bengaluru against accused No.1 and 2, for the offence punishable U/Sec.120-B of IPC and U/Sec.7 and 8 of PC Act. The said FIR is marked as Ex.P54 in the case.

Entrustment Mahazar i.e. Pre-Trap Proceeding:

64. The Entrustment Mahazar or Pre-Trap Proceeding has been marked in the case as per Ex.P6. As per the contents of Ex.P6-Entrustment Mahazar/Pre-trap proceeding, the said Mahazar/Proceeding was prepared on 08.09.2012 at about 11 AM in the conference Hall of CBI, ACB, Bengaluru in the presence of CW.1- Complainant, two independent witnesses along with other officers of CBI including CW.2-Sri.R.K.Shivanna, who is Trap Laying Officer [TLO]. The Ex.P6-Proceeding further discloses that TLO-CW.2 introduced complainant- CW.1 to the independent witnesses and other officials of CBI; further, he informed them regarding written complaint dated:07.09.2012 lodged by CW.1 against accused No.1-Sri.V.Nagaraj and accused No.2- Sri.Naginchanda Kincha; even he furnished a copy of complaint to independent witnesses for perusal and they perused it.

64.1. The Ex.P6-Proceeding further discloses that, CW.2-TLO briefed the gist of complaint to the independent witnesses and other team members in general; and in particular, he informed about demand of bribe of Rs.20 Lakhs made by the accused No.1 from complainant in order to reduce the tax liability of Rs.80 Lakh to Rs.30 Lakh. Further, CW.2-TLO also informed the independent witnesses to clarify the demand of bribe from the complainant and the said witnesses clarified the same and found to be satisfied with the genuineness of the complaint. Further, in order to trap accused No.1 and 2, CW.2-TLO also requested the independent witnesses to be part of the trap team to witness the proceedings; for which, they agreed.

64.2. Further, CW.2-TLO produced two CDs handed over to him by CW.1 and said CDs were played in the laptop and the transcription of relevant phone calls were made in separate sheets, which was duly attested by the complainant and independent witnesses. Further, TLO instructed CW.1-complainant to produce the demanded bribe amount of Rs.20 Lakhs; however, CW.1 has arranged only Rs.5 Lakh and produced the said amount containing Rs.1000 denomination of 500 notes in five bundles. The serial numbers of said currency notes were noted down in separate sheets.

64.3. The Ex.P6-Proceeding further discloses that, CW.1-Sri.A.K.Halim further stated vividly before the trap team that regrading his conversations with accused No.1 and 2 through Phone Calls and Messages in respect of demand of bribe amount and collection of his Tax Assessment Order. It is further stated in Ex.P6 that, CW.1 further informed the trap team that, when he contacted accused No.1 on 07.09.2012 in phone call, accused No.1 directed him to come to Naginchand Kincha’s office along with bribe amount and can receive the order after paying bribe amount.

64.4. That Ex.P6-Proceeding further discloses that, for the purpose of laying trap, TLO demonstrated the Sodium Carbonate-Phenolphthalein Test to team members. Thereafter, TLO asked one CBI official to smear the phenolphthalein powder on currency notes and cover and he did so; and after that, TLO asked one of the independent witnesses to handle the said currency notes and cover tainted with phenolphthalein powder and to dip his fingers in the prepared colourless sodium carbonate solution and when he did so, said colourless sodium carbonate solution turned into pink colour. Then TLO explained the significance of chemical reaction of phenolphthalein and sodium carbonate test to all the team members present.

65.5. The Ex.P6-Proceeding further discloses that, thereafter, TLO has handed over the tainted currency notes of Rs.5 Lakh [kept in a brief case] to CW.1- complainant with a instruction to hand over the said bribe amount to accused No.1-Sri.V.Nagaraj or accused No.2-Sri.Naginchand Kincha, if they demanded for the same. Further, TLO handed over a recording device to CW.1 to record the conversation which may happen during the trap. Thereafter, TLO has directed CW.1 to give a pre-arranged signal by calling Sri. T.P.Anandakrishnan, Inspector of Police, CBI from mobile phone and to utter the words “please arrange train ticket” after accused demanded and accepted the bribe amount.

Recovery Mahazar:

66. After the Entrustment Mahazar Proceedings i.e. Pre-Trap Proceedings, this Recovery Mahazar was prepared in the presence of independent witnesses, CW.1 and officers of CBI on 08.09.2012 at about 1430 Hours at the office cabin of accused No.2-Sri.Naginchanda Kincha situated at Laxmi Complex, K.R.Road, Bengaluru. Said Recovery Mahazar, which runs into 9 Pages, has been marked in the case as per Ex.P9.

66.1. As per contents of Ex.P9-Recovery Mahazar, after pre-trap proceedings, the trap team left the CBI office on 08.09.2012 at about 1200 Hours in two vehicles and at about 1235 Hours, the trap team reached the spot and thereafter, CW.1 switched on the recording device, and proceeded towards Laxmi Complex with Brief Case containing bribe money and went inside the Laxmi Complex and further went to the first floor; and other team members took position in scattered manner in the ground floor and on parking place of said Laxmi Complex waiting for pre-arranged signal from CW.1-Complainant.

66.2. That Ex.P9-Recovery Mahazar further discloses that, at about 1333 Hours, Sri.T.P.Anandakrishnan, Inspector of Police, CBI received a call from CW.1 and CW.1 conveyed the pre-arranged signal by telling that “please arrange train ticket”. After receipt of pre-arranged signal from CW.1, the TLO, two independent witnesses and other team members rushed to the office chamber of accused No.2-Sri.Naginchanda Kincha, at about 1335 Hours and on entering into the room/cabin, it is found that three persons including the CW.1-complainant sitting in that room. Thereafter, TLO introduced his identity and team members to other two persons sitting with CW.1 in that room and asked to reveal their identity and also asked whether they demanded and accepted any bribe amount from CW.1- Sri.A.K.Halim; for which, the person wearing light green colour shirt informed that he is H. Naginchand Kincha, Chartered accountant [i.e. accused No.2] and the person wearing purple colour T-shirt informed that he is Sri.V.Nagaraj, Income Tax Officer [i.e. accused No.1]. Thereafter, TLO directed both of them to co-operate with the proceedings.

66.3. The Ex.P9-Recovery Mahazar further discloses that, on the direction of TLO, one Sri.Manjunath Police Constable, CBI has prepared sodium carbonate solution in a clean glass tumbler and the said solution was colourless; then TLO asked accused No.-Sri.Naginchanda Kincha to dip his right hand fingers in the said solution and after doing so, the said colourless solution turned into pink in colour. Further, again accused No.2 was asked to dip his left hand fingers in another colourless sodium carbonate solution; on doing so, the another colourless solution turned into pink in colour. Both hand washes/solution of accused No.2 was taken in two separate bottles and they were labeled and sealed by obtaining signatures of independent witnesses.

66.4. The Ex.P9-Recovery Mahazar further discloses that, on the direction of TLO, another officer of CBI has prepared fresh sodium carbonate solution in another clean glass tumbler and TLO asked accused No.1- Sri.V.Nagaraj to dip his right hand fingers in the said colourless solution; upon doing so, the colourless solution remained colourless, that means, no apparent change was noticed. The same exercise was done with the right hand fingers of accused No.1, then also the colourless solution did not change its colour.

66.5. The Ex.P9-Recovery Mahazar further discloses that, thereafter accused No.2-Sri.Naginchanda Kincha was arrested and in this regard, a arrest-cum-personal search was prepared. On being asked as to whether he received bribe amount from CW.1 and where he kept the same; for which, accused No.2-Sri.Naginchanda Kincha informed that he received bribe amount from CW.1 to be handed over to Sri.V.Nagaraj ITO [accused No.1] and kept said amount in a plastic cover and he pointed towards the yellow plastic cover which kept on his table. On the direction of TLO, independent witness Sri.Guruprakash took out the yellow colour plastic cover and informed about presence of currency notes in the said cover.

66.6. The Ex.P9-Recovery Mahazar further discloses that, TLO directed independent witness-Guruprakash to compare the serial numbers and denomination of said currency notes with that mentioned in the Entrustment Mahazar [Ex.P6]; after comparing, it is found that, the serial numbers and denomination of said currency notes were tallied with that mentioned in the Entrustment Mahazar. Thereafter, said currency notes numbers were typed again in the Laptop i.e. 500 numbers of Rs.1000 denomination currency notes in five bundles, as per Annexure-A and said currency notes of Rs.5 Lakhs were seized in the presence of independent witnesses.

66.7. The Ex.P9-recovery Mahazar further discloses that, since accused No.2-Sri.Naginchanda Kincha informed that he has received the bribe amount for accused No.1-Sri.V.Nagaraj; therefore, TLO has arrested accused No.1. Further, Mobile Phones of accused No.1 and 2 were also seized. The rough sketch of trap spot was also taken in the presence of independent witnesses. The recording device which was entrusted to CW.1 was received and recorded conversation was transferred to laptop and overheard by the trap team including independent witnesses; transcription of audible conversation was made in separate sheets; and also said recording was transferred into CD.

66.8. That Ex.P9-Recovery Mahazar further discloses that, TLO has seized all material objects i.e. 4 bottles of hand washes/solutions of accused No.1 and 2; currency notes of Rs.5 Lakhs in five bundles; Mobile Phones of accused No.1 and 2; and a CD containing conversation at the time of trap. That this said Recovery Mahazar was concluded at 2245 Hours on 08.09.2012 and said Mahazar was dictated by TLO in the presence of independent witnesses and typed by one Sri Rajshekhar PSI CBI, ACB, Bengaluru.

67. Before appreciating the evidence of prosecution led on the charged offences, at this juncture, it is worth to reproduce the relevant provisions i.e. the provisions under Sections 7 and 13 of Prevention of Corruption Act 1988, here for better understanding. Section 7 of the PC Act-1988. Section 7 of the PC Act- 1988, as it was existing prior to amendment act-2018, reads as under:

“7. Public servant taking gratification other than legal remuneration in respect of an official act.–Whoever, being, or expecting to be a public servant, accepts or obtains or agrees to accept or attempts to obtain from any person, for himself or for any other person, any gratification whatever, other than legal remuneration, 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 functions, favour or disfavour to any person or for rendering or attempting to render any service or disservice to any person, with the Central Government or any State Government or Parliament or the Legislature of any State or with any local authority, corporation or Government company referred to in clause (c) of Section 2, or with any public servant, whether named or otherwise, shall be punishable with imprisonment which shall be not less than three years but which may extend to seven years and shall also be liable to fine.

Explanations.–(a) “Expecting to be a public servant.” If a person not expecting to be in office obtains a gratification by deceiving others into a belief that he is about to be in office, and that he will then serve them, he may be guilty of cheating, but he is not guilty of the offence defined in this section.

(b) “Gratification.” The word “gratification” is not restricted to pecuniary gratifications or to gratifications estimable in money.

(c) “Legal remuneration.” The words “legal remuneration” are not restricted to remuneration which a public servant can lawfully demand, but include all remuneration which he is permitted by the Government or the organisation, which he serves, to accept.

(d) “A motive or reward for doing.” A person who receives a gratification as a motive or reward for doing what he does not intend or is not in a position to do, or has not done, comes within this expression.

(e) Where a public servant induces a person erroneously to believe that his influence with the Government has obtained a title for that person and thus induces that person to give the public servant, money or any other gratification as a reward for this service, the public servant has committed an offence under this section.”

68. Thus, the essential ingredients required to be proved for holding the accused as guilty for the offence punishable U/Sec.7 of the PC Act-1988 are as follows;

(i) the accused must be, or expect to be, a public servant,

(ii) that he must accept or obtain or agrees to accept or attempts to obtain any gratification other than legal remuneration from any person, for himself or or for any other person,

(iii) gratification must be accepted as a motive or reward for doing or forbearing to do any official act; or

(iv) for showing or forbearing to show favor or disfavour to any person in the exercise of official functions.

69. Thus, a plain reading of provision U/Sec.7 of PC Act makes it clear that, in order to bring the case within the ambit of Sec.7 of the Act, the prosecution is required to establish that accused is a public servant and he obtains or accepts or agrees to accept or attempts to obtain from any person any gratification whatever as a motive or reward for doing or forbearing to do any official act for showing or forbearing to show favor or disfavour to any person in the exercise of official functions.

70. Section 13(1) (d) of the Prevention of Corruption Act-1988, prior to the amendment reads as under: –

13. Criminal misconduct by a public servant. —

(1) A public servant is said to commit the offence of criminal misconduct,-

(d) if he, —

(i) by corrupt or illegal means, obtains for himself or for any other person any valuable thing or pecuniary advantage; or

(ii) by abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage; or

(iii) while holding office as a public servant, obtains for any person any valuable thing or pecuniary advantage without any public interest.

(2) Any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to seven years and shall also be liable to fine.

71. Thus, by plain reading of provision Under Sec.13(1) (d) of PC Act, it goes to show that, to attract provision Under Sec.13(1)(d) of PC act, A public servant should obtain for himself or for any other person any valuable thing or pecuniary advantage by corrupt or illegal means of by abusing his position as a public servant.

Appreciation of Evidence:

72. In order to prove the charge for the offence P/U/Sec.7 of PC Act against the accused No.1- Sri.V.Nagaraj, Firstly, the prosecution has to establish that the accused No.1 is/was a public servant at relevant point of time. It is undisputed fact that, accused No.1 was working as Income Tax Officer, Ward 4(3) Unity Annexe Buliding, Bengaluru, at the time of commission of charge sheeted offences. As there is no any dispute with regard to designation of accused No.1 and his employment as Income Tax Officer under Central Government; therefore, there is no need to produce specific evidence in that regard. Therefore, it is crystal clear that the accused No.1-Sri.V.Nagaraj was public servant during the time of commission of alleged offences.

Proof of Demand and Acceptance:

73. In order to establish a charge under Section 7 of PC Act, the prosecution is under an obligation to prove demand as well as acceptance of bribe or illegal gratification. It is settled law that the proof of demand of bribe by a public servant and its acceptance by him is sine qua non for establishing the offence under Section 7 of the PC Act. The Hon’ble Supreme Court, in the case of K.S.Panduranga Vs. State of Karnataka [(2013) 3 SCC 721], has held that:

“The demand and acceptance of the amount as illegal gratification is a condition precedent for constituting an offence under section 7 of the Act.”

74. Further, in the case of P. Satyanarayana Murthy Vs. District Inspector of Police, State of Andhra Pradesh & Anr. [(2015) 10 SCC 152], the Hon’ble Supreme Court has held as under:

“23. The proof of demand of illegal gratification, thus, is the gravamen of the offence under Sections 7 and 13(1)(d)(i) and (ii) of the Act and in absence thereof, unmistakably the charge therefor, would fail. Mere acceptance of any amount allegedly by way of illegal gratification or recovery thereof, dehors the proof of demand, ipso facto, would thus not be sufficient to bring home the charge under these two sections of the Act”.

75. Further, in the case of State of Maharashtra Vs. Dnyaneshwar Laxman Rao [(2009) 15 SCC 200], the Hon’ble Supreme Court has held as under:

“16. Indisputably, the demand of illegal gratification is a sine qua non for constitution of an offence under the provisions of the Act. For arriving at the conclusion as to whether all the ingredients of an offence, viz., demand, acceptance and recovery of the amount of illegal gratification have been satisfied or not, the court must take into consideration the facts and circumstances brought on the record in their entirety. For the said purpose, indisputably, the presumptive evidence, as is laid down in Section 20 of the Act, must also be taken into consideration but then in respect thereof, it is trite, the standard of burden of proof on the accused vis-a-vis the standard of burden of proof on the prosecution would differ. Before, however, accused is called upon to explain as to how the amount in question was found in his possession, the foundational facts must be established by the prosecution. Even while invoking the provisions of Section 20 of the Act, the court is required to consider the explanation offered by the accused, if any, only on the touchstone of preponderance of probability and not on the touchstone of proof beyond all reasonable doubt”.

76. Thus, it is the settled proposition of law that the burden to prove the guilt of the accused always remains on the prosecution and it does not shift at any stage of the trial. However, by means of a presumption provided under Section 20 of the PC Act, the onus of proof would shift on the accused, only when it is shown that he accepted or obtained or agreed to accept or obtain any undue advantage. Even to invoke the presumption under Section 20 of PC Act, the Hon’ble Supreme Court has held that, it is essential that the ‘demand’ and ‘acceptance’ of the bribe must be established.

77. In the case of B. Jayaraj Vs. State of Andhra Pradesh [(2014) 13 SCC 55], the Hon’ble Supreme Court has held as under:

“9…In so far as the presumption permissible to be drawn under Section 20 of the Act is concerned, such presumption can only be in respect of the offence under Section 7 and not the offences under Section 13(1)(d)(i)(ii) of the Act. In any event, it is only on proof of acceptance of illegal gratification that presumption can be drawn under Section 20 of the Act that such gratification was received for doing or forbearing to do any official act. Proof of acceptance of illegal gratification can follow only if there is proof of demand. As the same is lacking in the present case the primary facts on the basis of which the legal presumption under Section 20 can be drawn are wholly absent”.

78. Therefore, keeping in the mind the principles laid down in the above cited decisions of Hon’ble Supreme Court with respect to demand and acceptance of illegal gratification, now, let me evaluate the evidence on record, in order to come conclusion whether the prosecution has established the criminal conspiracy and the charge U/Sec. 7 and 8 of the PC Act read with Section 120-B of IPC and U/Sec.13(2) read with Sec.13(1) (d) of PC Act-1988, against accused No.1 and2. Before evaluating the evidence on record, let me state the facts in issue pertaining to the case on hand.

Facts in Issue:

79. It is the very prosecution case that, the accused No.1, being a Public Servant, as Income Tax Officer has demanded illegal gratification from PW.1 for reducing Tax Liability from Rs.80 Lakh to Rs.30 lakh, in conspiracy with accused No.2 and accepted the bribe amount of Rs.5 Lakh from PW.1 through accused No.2 at his office.

80. Therefore, the Genesis of the Trap lies in the previous demand of bribe made by accused No.1 from PW.1/complainant, which became the basis of laying of the trap by the CBI. In this background, it is the heavy burden on the prosecution to prove the demand as well as the acceptance of illegal gratification by the accused persons. Thus, the facts in issue may be enumerated as under:

1). About three months prior to lodging of Ex.P1-complaint dated:07.09.2012 by the complainant/CW.1, during June 2012, PW.1 met accused No.1 in his office and received a notice U/Sec.147/148 of IT Act relating to his IT returns for the Year 2008-09, as per instruction of accused No.2-Chartered Accountant.

2). Thereafter, during August 2012, accused No.1 told complainant/CW.1 that there are lot of discrepancies in Assessment Years 2008-09 and 2009-10 and if he goes by rules, the tax liability will be Rs.80 Lakh and further during the end of August 2012, accused No.1 demanded CW.1 the gratification of Rs.20 Lakh for reducing his tax liability to Rs.25 Lakh to Rs.30 Lakh from Rs.80 Lakh and when CW.1 discussed this matter with accused No.2, he recommended him to pay said bribe amount to accused No.1 and to close the matter.

3). As Complainant/CW.1 decided that there is no need to pay bribe amount of Rs.20 Lakh to accused No.1; therefore, he preferred a typed written complaint against accused No.1 and 2 as per Ex.P1 addressed to DIG, CBI, Bengaluru.

4). Thereafter, the allegations made in the Ex.P1-complaint were verified by CW.2-Inspector of Police, CBI and found the allegations made in the complaint are true; and accordingly, he submitted a Complaint Verification Report as per Ex.P53.

5). Thereafter, on 07.09.2012 CW.1 was informed that his assessment order is ready in the office of accused No.2, and he can pay the money of Rs.20 Lakh and collect the said order from the office of accused No.2. This fact was informed to CW.1 by the accused No.2 over phone.

6). Since CW.1 already lodged complaint- Ex.P1; therefore, he told accused No.2 that he cannot arrange for Rs.20 Lakh and can arrange only Rs.5 Lakh; for which, accused No.2 told him that it is okay and he will check with accused No.1 and asked him to come on 08.09.2012 to his office.

7). Based on complaint-Ex.P1 and verification report-Ex.P53, a FIR came to be registered against accused No.1 and 2 as per Ex.P54 and after that, it was decided to trap the accused persons.

8). A trap was laid on 08.09.2012 at the office of accused No.2 and during the trap, accused No.2 accepted the bribe of Rs.5 Lakh from complainant/CW.1 on behalf of accused No.1 and at the time of trap, accused No.1 was also present.

9). Thereafter, the bribe amount of Rs.5 Lakh was recovered from the possession of accused No.2 and subsequently, both accused No.1 and 2 were arrested.

81. Thus, in order to prove the above stated facts and to establish the demand and acceptance of gratification and subsequent recovery of tainted bribe money of Rs.5 Lakh, prosecution has mainly relied upon the testimonies of PW.1-Sri.A.K.Halim, who is the complainant; PW.2-Sri.Guruprakash Y.R., who is one of the independent witnesses to Pre-Trap Proceeding and Recovery Mahazar; and PW.9-Sri.R.K.Shivanna, who is Trap Laying Officer. In addition to the testimonies of above mentioned witnesses, the prosecution has also relied upon the testimonies of expert witness for establishing that phenolphthalein powder was detected in the hand washes of accused No.2-Sri.Naginchand Kincha, other CFSL expert witnesses to prove voice analysis of accused and nodal officers from M/s.Bharti Airtel and Vodafone [hutch] to prove the call details record of mobile numbers of PW.1 and accused No.1 and 2; and the investigating officer has been examined to prove the investigation done by him.

Demand:

82. In order to prove the demand of illegal gratification by the accused, the prosecution has examined PW.1-Sri.A.K.Halim. His evidence, in his examination-in-chief, goes to show that, he had a property, that was sold in the year 2005 for Rs.9 Crores and he shown the advance sale consideration amount in his balance sheet for the year 2005-06. He also shown the capital gain of Rs.6 Crores in the balance sheet of 2007-08; and accordingly, he filed his IT returns. His evidence further goes to show that during 2012, when he was in Kochi, his tax consultant informed him through telephone that, a notice U/Sec.147/148 of IT Act was received by him relating to returns for the year 2008-09; therefore, he came to Bengaluru and contacted accused No.2-Sri.Naginchand Kincha, who is a Chartered Accountant at Bengaluru. He informed accused No.2 regarding a notice from Income Tax Department and accused No.2 told him to meet the concerned IT Officer at Bengaluru directly and also told him to receive the said notice.

83. The evidence of PW.1 further goes to show that, during June-2012, he met Income Tax Officer i.e., the accused No.1 in his office; accused No.1 gave him the said notice and he acknowledged the same. Thereafter, he submitted his reply to the Income Tax Department, regarding said notice. On receipt of his reply, accused No.1 has furnished reasons for reopening of his file for the Assessment Year 2008-09. Further, accused No.1 also reopened his file for the year 2009-10.

84. It is the further evidence of PW.1 that, during August-2012, accused No.1 told him that, in respect of Income Tax Returns for the year 2008-09 and 2009-10, there are lot of discrepancies and if he goes by the rules, then, approximately Rs.80 lakhs will be the tax liability. Further, as per evidence of PW.1, during the end of August-2012, accused No.1 told PW.1 that if he gives him extra gratification to the tune of Rs.10 lakhs, further he increased the said amount to Rs.20 lakhs, he would reduce his tax liability to Rs.25 lakhs to Rs.30 lakhs from Rs.80 lakhs as suggested. PW.1 discussed the said matter with his Chartered Accountant i.e. accused No.2 and accused No.2 advised him to pay the said amount of Rs.20 lakhs to accused No.1 to close the matter. Thus, from this part of testimony of PW.1, it is very clear that, the accused No.1 had made his specific demand of illegal gratification for the first time, during the end of August of 2012; and even accused No.2 has advised PW.1 to pay said bribe amount of Rs.20 Lakh to accused No.1.

85. It is the further chief examination of PW.1 that, from 01.09.2012 onwards, till 06.09.2012, he started recording the telephonic conversation between accused No.1 and accused No.2 with him through his mobile; at that time, he was using SIM bearing No.9846294397 which was in his wife’s name. He further deposed that on 07.09.2012, he decided that there is no need to pay the bribe amount of Rs.20 lakhs to accused No.1 in respect of his tax liability; therefore, he went to CBI Office at Bengaluru on 07.09.2012 and submitted a written complaint [i.e. Typed Complaint].

86. It is the further testimony of PW.1 that, he was informed that on 07.09.2012, his assessment order was ready in the office of accused No.2 at Bengaluru and he can pay the money of Rs.20 lakhs and collect the said order from the office of accused No.2; and accused No.2 has informed said fact to him over phone. This part of testimony of PW.1 discloses that, accused No.2 asked him to pay Rs.20 Lakh and collect assessment order from his office. Thus, again on 07.09.2012, there is demand for bribe money by the accused No.2 on behalf of accused No.1.

87. It is the further testimony of PW.1 that, as he has already lodged a complaint to CBI; therefore, he along with CBI officer thought of gaining time for payment of the said amount. Therefore, he told accused No.2 that he cannot arrange for Rs.20 lakhs and can arrange only Rs.5 lakhs; for which, accused No.2 told him that it is okay and he will check with accused No.1 and asked him to come on next day i.e. on 08.09.2012 to his office. Thus, this part of testimony of PW.1 discloses that, though the initial demand of bribe was for Rs.20 Lakh by the accused No.1, when PW.1 told accused No.2 that he cannot arrange for Rs.20 lakhs and can arrange only Rs.5 lakhs; for which, accused No.2 told him that it is okay.

88. In order to substantiate and corroborate the evidence of PW.1 on the fact of demand of gratification/bribe by the accused persons, the prosecution has examined CW.2-Sri.R.K.Shivanna, then Inspector of Police, CBI/ACB, Bengaluru. He is the Trap Laying Officer [In short, ‘TLO’] in this case. He is examined as PW.9. His evidence in his examination-in- chief, goes to show that, on 07.09.2012 at about 09:45 AM, Head of Branch (DIG) CBI/ACB, Bengaluru had called him to his chamber and introduced him to one Sri.A.K.Halim [i.e. PW.1] and informed him that Mr.Halim has grievance against one Income Tax Officer called Nagaraj in collusion with Sri.Nagin Kincha, he was demanding Rs.20 Lakhs in the form of Bribe to extend official favour in giving deduction of tax of said Sri.A.K.Halim.

89. It is the further evidence of PW.9 that, in that regard, Sri.A.K.Halim [PW.1] submitted a Complaint dated:07.09.2012 along with two CDs containing the conversation entered into between him and accused No.1 & accused No.2, addressed to Head of Branch. Further, PW.9 deposed that, he heard the audio information contained in the CDs and convinced himself that accused No.1 in connivance with accused No.2 is demanding illegal gratification to do an official favour. Thereafter, he has verified the allegations in the complaint and also the conversation recorded in CD entered into between Complainant and Accused; after discussing the matter with Sri.A.K.Halim, he sent him back with a instruction to arrange the demanded money for using as bribe money in the case with a request to report to him on 08.09.2012. Thereafter, he continued the verification of the allegations leveled in the complaint and it was found that the allegations made in complaint were genuine/true and the accused persons were illegally demanding money to do an official favour by giving reduction in the Income Tax of PW.1. In this regard, he submitted Complaint Verification Report to the Head of Branch, CBI, Bengaluru, as per Ex.P53.

90. Thus, the evidence of PW.9-TLO clearly corroborates the evidence of PW.1 regarding the demand of gratification made by the accused No.1, in connivance with accused No.2, is concerned. Further, PW.9 testifies that he heard the conversation of PW.1, accused No.1 and 2 contained in two CDs and found confirmed that accused No.1 in connivance with accused No.2 is demanding illegal gratification to do an official favour i.e. reduction in the taxable amount.

91. Further, to corroborate the evidence of PW.1, the prosecution has examined CW.3-Sri.Guruprakash Y.R., then Scale-I Officer in Punjab National Bank, Circle Office, Bengaluru. He is an independent witness in the case and is examined as PW.2. As per evidence of this witness, on 07.09.2012, he was asked by his Senior Manager to go to CBI office, Bengaluru on 08.09.2012; and accordingly, he reached CBI office in the morning on

08.09.2012, where one Shivanna met him by introducing himself as Inspector of CBI and informed that he had been called to assist them by acting as a Pancha to a search operation of Government Employees.

92. The evidence of PW.2 further discloses that, apart from him, CW.4-Jayaseelan and 3-4 persons were already present in the CBI office and one more person called Sri.A.K.Halim [i.e. PW.1] was also present. He was introduced to Sri.A.K.Halim [i.e. PW.1] by the officials stating that he is complainant in this case and has lodged a complaint against one Income tax officer-V. Nagaraj and one Chartered Accountant-Sri.Nagin Kincha; and also told that said Nagaraj has demanded illegal gratification from the complainant with an assurance that his leviable tax of Rs.80 Lakhs will be reduced to Rs.30 Lakhs and; in return, Rs.20 Lakh was demanded by said Sri.Nagaraj-A1. In this regard, he was informed that the complainant Sri.Halim was not in a position to pay the illegal demand of Rs.20 Lakh, and a written complaint was already lodged by him with CBI. It is the further evidence of PW.2 that, a copy of said complaint [marked as per Ex.P24] was shown to him; and himself and Jayaseelan [CW.4] signed the copy of said complaint. Thus, this testimony of PW.2 corroborates the very testimony of PW.1 in deposing regarding demand of illegal gratification of Rs.20 Lakh by the accused No.1 for reducing his Tax Liability of Rs.80 Lakhs to Rs.30 Lakhs and lodging a complaint by PW.1 against the accused persons.

CDR Evidence vis-a-vis the Evidence of PW.1:

93. Further, there is corroborative circumstantial evidence in the form of Call Detail Record marked at Ex.P43, Ex.P45 and Ex.P50 to support the testimony of PW.1 in deposing about demand of illegal gratification by the accused No.1-Sri.V.Nagaraj. That Ex.P43 is the Call Details of Mobile No.9880504579 [belonging to accused No.1] from 01.08.2012 to 08.09.2012; Ex.P45 is the Call Details of Mobile No.9845025385 [belonging to accused No.2] from 01.08.2012 to 08.09.2012; and Ex.P50 is the Call Details of Mobile No.9846204397 [though the SIM is in the name of PW.16, but used by her husband PW.1- Complainant] from 01.08.2012 to 08.09.2012.

94. It is the specific evidence of PW.1 that, “during the end of August 2012, accused No.1 told him that if he gives him extra gratification to the tune of Rs.10 Lakh, then he increased the said amount to Rs.20 Lakh for reducing his tax liability to Rs.25 to Rs.30 Lakh from Rs.80 Lakh”. This version of PW.1 is corroborated by the Ex.P43-Call Details of Mobile No.9880504579, belonging to accused No.1. As per Ex.P43, on 26.08.2012, at 21:16:17 hours accused No.1 had called from his Mobile having SIM No.9880504579 to the Mobile of PW.1 having SIM No.9846204397 and duration of said call lasts for 30 Seconds. Further, on the same day, at 21:27:55 hours, PW.1 called accused No.1 and duration of said call lasts for 8 Seconds. Similarly, on 27.08.2012, at 13:31:30 hours PW.1 called accused No.1 and duration of said call lasts for 12 Seconds.

95. Further, it is the evidence of PW.1 that, from 1st of September 2012 onwards he started to record the telephonic conversation between himself and accused No.1 & 2. As per Ex.P43, on 01.09.2012, at 15:19:25 hours, PW.1 called accused No.1 for 40 Seconds; further, PW.1 called accused No.1 at 15:20:39 hours for 27 Seconds; at 15:21:40 hours for 25 Seconds; and at 15:41:04 hours for 20 Seconds. Further, on 02.09.2012, PW.1 called accused No.1 at 10:21:29 hours for 75 Seconds. Further, on 07.09.2012, PW.1 called accused No.1 at 15:26:24 hours; further accused No.1 called PW.1 at 15:50:31 hours for 32 Seconds; again at 18:06:57 hours accused No.1 called PW.1 for 142 Seconds; further at 20:45:46 hours, accused No.1 called PW.1 for 12 Seconds and lastly at 21:03:37 on 07.09.2012, PW.1 called accused No.1 and talked for 497 Seconds. Further, as per Ex.P50, on 07.09.2012, PW.1 called accused No.1 at 13:15:24 hours for 57 Seconds. Thus, it is very clear from CDR-Ex.P43 and P50, the accused No.1 was constantly touch with PW.1/complainant regarding his tax matter.

96. The PW.1, in his evidence has stated that, he was using SIM bearing No.9846204397 in his Mobile Phone during the time of incident, which is held in the name of his wife-PW.16. Even PW.16-Smt.Nazima Halim has deposed before the court that, as per Ex.P49- Customer Application Form, she was allotted SIM Card No.9846204397 and the said SIM was being used by her husband-PW.1. Further, PW.8-Sri.S.N.Murthy, then Nodal Officer for M/s. Vodafone South Ltd., Bengaluru has deposed that the SIM for Mobile Number 9846204397 was allotted to one Smt. Nazima W/o. Halim and he also identified attested copy of Customer application Form of PW.16-Nazima Halim along with her KYC documents, as per Ex.P49. Further, there is no any dispute with SIM No.9880504579 which was being used by accused No.1 and Ex.P42-Customer Application Form confirms the same; and so also with SIM No.9845025385-Customer Application Form which was being used by accused No.2 and EX.P44 confirms the same. Further, Ex.P43 and Ex.P45 are supported by a certificate U/Sec.65-B of Indian Evidence Act issued by PW.7-Sri.Stanely, which is marked as per Ex.P46; and the certificate U/Sec.65-B of Indian Evidence Act issued by PW.8-Sri.S.N.Murthy for Ex.P50, the Call Details Records for the Number-9846204397 used by PW.1- Complainant, is marked as per Ex.P51. Thus, the Call Detail Records of Mobile Numbers of PW.1, accused No.1 and 2, marked at Ex.P43, P45 and P50 can be relied upon to corroborate the testimony of PW.1 in deposing the demand of illegal gratification by the accused.

97. Thus, in the case on hand, the prosecution has proved the demand of illegal gratification by the accused No.1, beyond any shadow of doubt through the direct evidence of PW.1 supported and corroborated by the evidence of PW.2 and PW.9, coupled with circumstantial/documentary evidence of Call Detail Records of Mobile Numbers of PW.1, accused No.1 and 2, marked at Ex.P43, P45 and P50.

Acceptance of Bribe and its Recovery:

98. Now, let me, further evaluate the evidence on record in order to know whether the prosecution has proved the acceptance of bribe/illegal gratification and subsequent recovery of the same. It is the evidence of PW.1 that, on 08.09.2012, they assembled in the CBI office around 10 AM; at that time, Sri.Shivanna, and Sri.Anand Krishnan, both Inspectors of CBI and other two inspectors; and two independent witnesses were also there and all decided to make a trap. At that time, he had brought Rs.5 lakhs with him having denomination of Rs.1000/- of 500 notes and he gave said amount to Sri.Shivanna, Inspector of CBI; who recorded the serial number of said currency notes, smeared some chemical on the said notes and told him that, if anybody touches the notes and when the hands of such person are dipped into the water, the colour of water will turn to pink; and in this regard, a demonstration was also done before him in the office of CBI.

99. It is the further testimony of PW.1 that, thereafter, said currency notes of Rs.5 lakhs were given to him for handing over the same to accused No.1 or accused No.2 towards bribe amount for reducing his tax liability. The officers of CBI also told him that once the accused No.1 or accused No.2 receive the said amount, he has to give signal by calling one of the Inspectors of CBI by saying “Please Arrange My Train Tickets”. The CBI officers also provided him a digital voice recorder and told him to record the conversation with accused No.1 or accused No.2.

100. It is further deposed by PW.1 that, on 08.09.2012, around 11:30 AM, they left the CBI office along with independent witnesses and other officers of CBI and reached the office of accused No.2 around 12:00 or 12:15 PM.; and before reaching the office of accused No.2 one minute before, the two CBI officers who accompanied him got down from the said car, and he alone went inside the office of the accused No.2 and said officers also who were along with him also followed him and the Trap Team came in another Car, also joined them. When he entered the office of accused No.2, it was around 12:30 or 12:40 PM; at that time, the accused No.2 was busy with his clients in his chamber, he told him to wait at the reception hall and after sometime, accused No.2 called him inside his chamber and told that accused No.1 is on the way and he will join them shortly. After 5 to 10 minutes, himself and accused No.2 went to another room in the same building belonging to the office of accused No.2; at that time, accused No.1 was sitting there, he sat next to accused No.1 and accused No.2 sat opposite to them. He told accused No.1 that the Assessment Order for the year 2009-2010 passed by him is not correct, because the agreed amount tax was between Rs.25 to Rs.30 lakhs but the actual order passed was Rs.31.8 lakhs.

101. It is the further evidence of PW.1 that, accused No.2 asked him to show the money and witness gave him the bribe money brought in a bag, accused No.2 opened the said bag and counted the money and said that it is Rs.5 lakhs. Then he came out of the said room and gave signal to the CBI people saying that “please arrange my train ticket” by telephoning to one of the CBI officers and within no time, they entered the office of the accused No.2 and introduced themselves that they are from CBI. Thereafter, one of the CBI officers asked the accused about their identity, both accused introduced themselves to said CBI officer and one of the officers of Trap Team asked accused No.2 to put his hand in a glass of water and it is noticed that the colour of the said water changed to pink and the said process was done for second time and then also the said water turned into pink colour.

102. It is the further testimony of PW.1 that, the accused No.2 told the CBI team that said money was brought for Mr.Nagaraj-accused No.1 and not in connection with any professional fee of him or connected with any tax payable by PW.1; and accused No.2 gave a letter in writing to that effect and he said that it was a mistake and he should be pardoned.

103. It is the further evidence of PW.1 that, the CBI Officers dipped the hands of the accused No.1 in the glass of water, the said water did not change its colour. Then, the CBI officer asked accused No.1 as to why he came to the office of accused No.2; then, accused No.1 told that he came to the office of accused No.2 to take acknowledgment of handing over the said Assessment Order.

104. The evidence of PW.1 further reveals that, after Trap, the CBI officers seized the related documents from the office of accused No.2 relating to his Assessment of Income Tax and also seized said money of Rs.5 Lakh in the presence of independent witnesses. The witness further deposed that the CBI officers have drawn a Mahazar in his presence, in that regard. He identified said original Recovery Mahazar dated:08.09.2012 and on its identification by PW.1, it is marked as Ex.P9. PW.1 has also identified serial numbers of currency notes mentioned in 5 sheets, which is marked as Ex.P10. The witness has also identified the transcription of conversation took place during the trap proceedings on 08.09.2012 at the office of accused No.2 and the said conversation is marked as Ex.P11. Further, this witness has deposed that the CBI officers also done rough sketch of the scene of crime in the office of accused No.2 and this witness has identified said rough sketch and the same has been marked as Ex.P12. Further, this witness has identified five bundles of currency notes containing 100 notes of denomination of Rs.1,000/- each, as per MO.3 to MO.7 respectively.

105. In support of testimony of PW.1, PW.2- Sri.Guruprakash Y.R., who is an independent witness to the Entrustment Mahazar and Recovery Mahazar, has deposed that on 07.09.2012, his Senior Manager, HRD Branch asked him to go to CBI office on 08.09.2012; accordingly, he reached the CBI office in the morning on 08.09.2012; where one officer by name Sri.Shivanna introduced himself as Inspector of CBI and informed that, he had been called to assist them by acting as Pancha in conducting the search operation of Government Employees. Apart from him, CW.4- Sri.Jayaseelan and other 3 to 4 persons were already present in the CBI office. Further, he was taken to conference hall. In the conference hall, one more person by name Sri.A.K.Halim was present, he was introduced to him by CBI officers stating that he is the complainant in this case and has lodged a complaint against one Income Tax Officer Sri.V.Nagaraj and one Chartered Accountant Sri.Nagin Kincha.

106. Further, it is the evidence of PW.2 that, he was informed that said Nagaraj has demanded illegal money from complainant with an assurance that leviable tax excess of complainant-Sri.A.K.Halim assessed at Rs.80 Lakh will be reduced to Rs.30 Lakhs and in return for that, Rs.20 Lakh has been demanded by said Sri.Nagaraj-accused No.1. The said written complaint was shown to him by CBI officer; accordingly, himself and one Jayaseelan put their signatures to the copy of said complaint.

107. It is the further evidence of PW.2 that, after that himself and Sri.Jayaseelan verified the complaint by reading it. Thereafter, IO informed them that there will be a process of demonstration of seizure of bribe money in the office of accused itself. In this regard, I.O. asked complainant to handover the bribe money and Rs.5 lakhs was handed over to Sri.Shivanna/CW.2 consisting of Rs.1000 denomination of 500 notes, then serial numbers of said currency notes were noted down by CW.2 with the help of Laptop. Further, all the currency notes were smeared with some powder and then CW.4 was asked to handle with notes by touching his finger and palm; and thereafter, he was asked to dip his fingers in a bowl containing liquid, after dipping his fingers the colourless liquid turned into light pink colour and thereafter, they explained to them that this will be the process of trap that is likely to be taken place if accused No.1 receives bribe money of Rs.5 lakhs kept in cover and the same was handed over to PW.1-Sri.A.K.Halim, which was kept in the brief case of PW.1 with a direction to hand over said amount to accused persons on demand being made.

108. It is the further evidence of PW.2 that, PW.1 was also handed over with digital voice recorder with a direction to switch it on to record the conversation between himself and accused persons that may take place at the time of handing over the powder tainted money in his office and further PW.1 was informed by CW.2 to give a signal to one Ananda Krishnan by making a mobile call by uttering the word like “Please book a ticket”. After completion of demonstration proceedings, CW.2 prepared an Entrustment Mahazar and took his signature; and signatures of Jayaseelan and others.

109. The evidence of PW.2 further discloses that, after Entrustment Mahazar proceedings, the trap team left CBI office in 2 vehicles to reach the destination office situated near K.R.Market, Bengaluru. PW.1 and others left in the own car of PW.1; and himself, CW.2 and others boarded the CBI office Car; they reached K. R. Market at about 12.30 PM; after reaching the K.R.Market, PW.2 went into the office of accused No.2-Sri.Nagin Kincha. This witness further deposed that, himself, CW.4 and others were waiting near the office, after half-an-hour, CW.11-Sri.Anand Krishnan received a mobile call from PW.1, then, CW.11 asked them that they have to proceed to the office of accused No.2 and accordingly, himself, CW.4 and others went to the office of accused No.2 situated in the 1st floor of Lakshmi Complex of K.R.Market. This witness has further deposed that, they entered the chamber of Chartered Accountant, where three persons were sitting; one was PW.1, one person was sitting in the chair of Chartered accountant and another person was named as Nagaraj.

110. It is the further evidence of PW.2 that, CW.2/Sri.Shivanna-IO asked the presence of accused in the said office; for which, accused No.2 informed that PW.1 had come to their office for discussion to finalize IT assessment for the year; and accused No.1 replied that he had come to the office to collect some acknowledgments. Further, upon enquiry of accused No.2 by CW.2 about the presence of accused No.1 in his office; for which, accused No.2 replied that accused No.1 has come to collect the documents prepared by him after having reducing the tax assessment to be paid by PW.1 by showing less assessment of tax of PW.1 than what PW.1 was required to pay as per law and further accused No.2 stated that he has received Rs.5 Lakhs from PW.1 to hand over the same to accused No.1.

111. Further, PW.2 has deposed that, CW.2 made arrangement for collection of plain water in a bowl with the help of his staff and asked accused No.2 to dip his right hand fingers in the said bowl containing plain water, then it turned into light pink. At the same time, CW.2 made arrangement for another set of water in a bowl with the help of his staff and asked accused No.2 to dip his left hand fingers in the said bowl containing plain, then it turned into light pink. Accordingly, CW.2 seized the said light pink turned liquid substance by transferring them in two separate clean bottles and the said solution bottle was closed, labeled and sealed and affixed white chit on it and got attested with his signature and Sri.Jayaseelan-CW.4.

112. PW.2 further deposed that CW.2-IO asked him to pick up the cover kept on the table and to open it. After opening the said cover, he found currency note bundles consisting Rs.1000 denomination of 500 notes and said currency notes numbers were tallied with the numbers already mentioned in the Entrustment Mahazar-Ex.P6 and they were found to be tallied and correct. Further, PW.2 deposed that CW.2 seized said Rs.5 lakh cash and other documents and bottles of solution by preparing a Panchanama; then, PW.1 handed over the digital voice recorder device to CW.2 and the same was played in a separate room, the content therein was reduced into writing and it was also seized. This witness further deposed that, the mobile phone belonging to accused No.1 and 2 were also seized and IO-CW.2 prepared a detailed recovery mahazar regarding the said proceedings as per Ex.P9 and took his signature and that of CW.4.

113. To support the evidence of PW.1 and 2, so far as acceptance of bribe amount and subsequent recovery of the same is concerned, PW.9-Trap Laying Officer has deposed on similar lines of PW.1 and 2 regarding moving of Trap Team towards the office of accused No.2 from CBI Office. He further deposed that, after reaching the spot, PW.1 went inside the Lakshmi Complex in the 1 st floor and at about 01.33 PM., Sri.Ananda Krishna (CW-11) informed him and other team members about receipt of pre-arranged signal from PW.1; accordingly himself, independent witnesses and team members rushed to the office chamber of accused No.2 and in the chamber of accused No.2, PW.1 and both accused No.1 and accused No.2 were found present. Then he disclosed his identity as CBI Officer and the identity of other team members and asked the accused No.1 and accused No.2 to disclose their identity; for that, both the accused became perplexed and could not speak for a while. Then he again asked them to explain their identity; then after few minutes, accused No.2 introduced himself as Sri.Naginchand Kincha working as Chartered Accountant by Profession. Then he asked whether he had demanded and accepted Rs.5 Lakhs from PW.1; for that, accused No.2 admitted that he had received said Rs.5 Lakh from PW.1 to hand over the same to Sri.Nagaraj, Income Tax Officer [accused No. 1], who was also sitting in front of accused No.2; and on enquiry, accused No.2 informed that he came to the office of accused No.2 for collecting the acknowledgment of PW.1. The witness further deposed that, both the accused have given their explanation in writing to him in the presence of independent witnesses; accused No.1 his handwritten explanation letter dated:08.09.2012 as per Ex.P55 addressed to him stating that he had come there [i.e. to the office of accused No.2] to collect the acknowledgment from PW.1; and accused No.2 has also submitted his handwritten explanation letter dated:08.09.2012 as per Ex.P56 addressed to him stating that he had accepted the illegal gratification of Rs.5 Lakhs on behalf of accused No.1 to hand over the same to accused No.1.

114. It is the further evidence of PW.9 that, then he asked accused No.2 to dip his hand in the tumbler of water containing sodium carbonate solution; accordingly, accused No.2 dipped his both hand fingers and washed hand fingers in sodium carbonate solutions which turned into pink in colour. The solutions were collected and poured in two empty glass bottles separately and they were closed sealed, affixed with labels attested by him and two witnesses and the two bottles [i.e. MO.9 and MO.10].

115. Further, it is the evidence of PW.9 that, thereafter, he asked accused No.2 as to where he has kept said amount of Rs.5 Lakh received by him; for which, he pointed towards the yellow colour plastic cover bag which was kept on his table. Then he directed the independent witness to inspect the cover and after inspecting the cover, the independent witness has informed that said cover contains currency notes of Rs.5 Lakhs and other papers; and the same were taken out and tallied with the numbers of currency notes with that mentioned in Ex.P8, the numbers mentioned with regard to currency notes in Ex.P8 and numbers of currency notes found in plastic cover were one and the same. In this regard, the numbers on currency notes and numbers mentioned in Ex.P8 were typed once again and it was signed by him and got duly signed by the witnesses.

The Phenolphthalein-Sodium Carbonate Test:

116. Thus, as seen above, PW.1-Complainant, PW.2-Independent witness and PW.9-TLO have been constantly deposed regarding acceptance of bribe amount of Rs.5 Lakh by the accused No.2 on behalf of accused No.1 from PW.1. Further, the evidence on record discloses that, when the Trap team including PW.9-TLO and PW.2- independent witness entered into the chamber of accused No.2 immediately after receipt of pre-arranged signal from PW.1; upon enquiry, accused No.2 is said to have confessed that he has received Rs.5 Lakh from PW.1 to hand over the same to accused No.1. Further, as per testimony of PW.2 and PW.9, on enquiry as to where he has kept the received bribe amount; for which, accused No.2 stated that he has kept the same on the table. That means, the accused No.2 has handled the tainted bribe money. Therefore, in order to show that accused No.2 has handled the tainted bribe amount, the TLO has conducted the Phenolphthalein-Sodium Carbonate Test in the presence of independent witnesses and accused No.2 was asked to dip his right hand fingers in a glass tumbler containing colourless Sodium Carbonate solution and he did, accordingly; then said colourless solution turned into pink colour. The same exercise was done with left hand fingers of accused No.2; then also, the colourless solution turned into pink colour. Thereafter, the solutions of both hand washes of accused No.2 were taken in two glass bottles separately sent to CFSL for chemical examination. It is stated that, the prosecution has received a positive report in that regard.

117. To prove the Phenolphthalein Test positive, the prosecution has examined PW.12-Dr.Ravishankar Katkar, a Chemical Examiner. As per his evidence, on

18.09.2012, he received a letter from CBI along with four Articles. He stated that among said four Bottles, Bottle No.1 and 2 i.e. MO.9 and MO.10 are the hand washes of accused No.2-Naginchand Knicha. His evidence further discloses that, after conducting simple chemical examination of hand wash solution, he came to know that Bottle No.1 and 2 i.e. MO.9 and MO.10, which are the hand washes of accused No.2, contained the presence of Phenolphthalein. Accordingly, he gave his report as per Ex.P69 dated:25.09.2012; wherein he opined that, ‘the presence of Phenolphthalein is detected both the right and left hand finger washes of the AGO- Sri.Naginchand Kncha only’. Though the learned counsel for the accused No.2 has cross examined this witness a little lengthy but except a denial suggestion that the witness does not have any experience in examining the chemicals, nothing worth has been elicited. Thus, the evidence of PW12 and his report marked at Ex.P69 also corroborates the evidence of PW.1, PW.2 and PW.9 regarding acceptance and handling of bribe amount of Rs.5 Lakh by the accused No.2.

Tallying of serial numbers of tainted currency notes mentioned in the Entrustment Mahazar with Recovery Mahazar:

118. It is the prosecution version that, the acceptance of bribe amount of Rs.5 Lakh by the accused No.2 on behalf of accused No.1 is further strengthened by the matching of the serial numbers of seized currency notes between the Entrustment Mahazar-Ex.P6 and Recovery Mahazar-Ex.P9. In the case on hand, the TLO has mentioned the serial numbers of currency notes of bribe amount in the Entrustment Mahazar-Ex.P6 before it is given to the complainant. That Ex.P8 is an account of printed/typed serial numbers of currency notes of trap amount of Rs.5 Lakh [i.e. Rs.1000 denomination of 500 notes], which was prepared on 08.09.2012 during the Entrustment Mahazar-Ex.P6. That Ex.P10 is an account of printed/typed serial numbers of tainted currency notes of trap amount of Rs.5 Lakh, which was prepared on

08.09.2012 during the recovery Mahazar Proceedings. On closely perusal of Ex.P8 and P10, it is evident that, the serial numbers of currency notes of bribe amount as mentioned in Ex.P8 are perfectly matched/tallied with serial numbers of seized currency notes of trap amount as mentioned in the Ex.P10. As per evidence of PW.2, an independent witness to Ex.P9-Recovery Mahazar, when he was asked to inspect the bribe amount kept on the table of accused No.2 office, he found that the serial numbers of seized currency notes of bribe amount were tallied with the serial numbers mentioned in the Entrustment Mahazar.

119. It is important to note here that, tallying or matching of serial numbers of tainted currency notes as mentioned in the Entrustment Mahazar with that of Recovery Mahazar assumes a significant importance in trap cases, as it denotes a direct proof that exact tainted money handed over to the complainant during the pre- trap proceeding, which will be further handed over to the concerned accused, was the same tainted money which was recovered from the accused after its acceptance, during the trap.

120. This court is well aware that mere recovery of tainted money is insufficient to record a conviction against the accused for the offence under section 7 of PC Act, unless demand is proved. However, in the case on hand, as already discussed above, the prosecution has proved the first and foremost ‘fact-in-issue’ i.e. demand through the best evidence of PW.1 supported by the evidence of PW.2-Independent witness and PW.9-TLO. Therefore, this court is of the opinion that, matching of serial numbers of tainted currency notes between Ex.P8 annexed with Entrustment Mahazar-Ex.P6 and Ex.P10, annexed with Recovery Mahazar-Ex.P9 coupled with positive Phenolphthalein Test, obviously supports and corroborates the oral testimony of PW.1, PW.2 and PW.9 in respect of demand, acceptance and recovery of bribe amount of Rs.5 Lakh. Thus, handling of tainted currency and positive Phenolphthalein Test constitute sufficient proof to establish that there was acceptance of bribe amount by the accused No.2 on behalf of accused No.1- Public Servant.

The statement of PW.1 U/Sec.164 of Cr.P.C.:

121. It is relevant to note here that, after lodging complaint on 07.09.2012, PW.1-complainant appeared before learned XVII Addl. Chief Metropolitan Magistrate on 15.03.2013 and got recorded his statement U/Sec.164 of Cr.P.C. The said statement U/Sec.164 of Cr.P.C., is got marked in the case as per Ex.P23. In his said statement- Ex.P23 also, PW.1-complainant has reiterated the averment of his complaint by mentioning about demand of bribe of Rs.20 Lakhs by the accused No.1 for reducing his tax amount from Rs.80 Lakh and about advice of accused No.2 to give Rs.20 Lakh to accused No.1 and to close the matter. Further, his said Sec.164-Statement also mentions about lodging his complaint on

07.09.2012; handing over of bribe amount of Rs.5 Lakh to accused No.2; acceptance of said bribe amount by accused No.2 by counting it and placing the same on his table. Thus, the contents of his statement recorded as per Sec.164 of Cr.P.C., also corroborates the oral evidence of PW.1 and the averment of his complaint-Ex.P1.

122. It is no doubt true that, there is no much evidentiary value attached to the statement recorded U/Sec.164 of Cr.P.C. and is not a substantive piece of evidence. It is also true that, the said statement-Ex.P23 was recorded more than six months after lodging his complaint-Ex.P1. However, for the limited purpose, the statement marked at Ex.P23 can be relied upon to corroborate the testimony of PW.1. Therefore, this court is of the opinion that even the statement of PW.1 recorded U/Sec.164 of Cr.P.C. also supports his oral evidence.

123. Thus, the prosecution has proved the demand of illegal gratification by the accused No.1, acceptance of illegal gratification by accused No.1 through accused No.2; and subsequent recovery of bribe amount from the possession of accused No.2, beyond reasonable doubt.

The Defense/Contention of Accused Persons:

124. The learned counsels for the accused have vehemently contended that, except self serving testimony of PW.1 regarding alleged demand of bribe by the accused No.1, there is no other cogent evidence to support said testimony of PW.1. It is contended that, the prosecution has not examined any single independent and eye witness who has heard and seen the demand of bribe amount by accused No.1 from PW.1, except interested witness-PW.1. That alleged demand and acceptance of bribe wholly rests on the uncorroborated testimony of PW.1, who is an interested witness; therefore, the testimony of PW.1 cannot be relied upon.

125. It is to be noted here that, the evidence of PW.1 is the direct evidence which is best in nature. He has unequivocally and specifically deposed regarding demand and acceptance of bribe by the accused. Moreover, the evidence of PW.1 is fully corroborated by the evidence of PW.2-Independent witness and PW.9-TLO. It is true that PW.2 and PW.9 are not direct witnesses who had seen or heard the demand of illegal gratification by the accused No.1 and their evidence may be hearsay in nature so far as demand is concerned. However, PW.2 is an independent witness and PW.9 is the Inspector of Police of CBI, who verified the complaint of PW.1, and subsequently led the Trap Team as TLO. Their evidence positively supports the evidence of PW.1 on demand of illegal gratification by the accused No.1 as discussed in the aforesaid Paragraphs. Therefore, there are no reasons to disbelieve the testimony of PW.2 and PW.9.

126. Moreover, in every trap case, we cannot expect an eye witness to demand of bribe. It cannot be always possible for independent eye witnesses or cannot insist them to accompany the complainant at every single spot due to several factors. However, if the testimony of complainant is so strong, then there is no fault in relying upon sole testimony of PW.1 in respect of demand of bribe. In the present case, since the testimony of PW.1 itself is direct and best evidence, therefore no other cogent evidence is not required to prove the demand.

127. It is well settled that, the court has to appreciate the creditworthiness of evidence of the complainant-witness, while considering the contention of defense side that self serving testimony of complainant- witness is not reliable. In the present case, the creditworthiness of evidence of complainant-PW.1 can be briefly summarized as under:

1. PW.1 has approached the CBI as he did not want to bribe accused No.1 and lodged a complaint as per Ex.P1.

2. His complaint-Ex.P1 was verified by PW.9-TLO and clarified himself as to genuineness of complaint.

3. He reiterated the key elements of his complaint relating demand in his oral testimony also.

Therefore, the creditworthy portion of testimony of PW.1 particularly his affirmation of Ex.P1-complaint, its trueness/genuineness verified by PW.9 as per Ex.P53; its correctness in the presence of independent witnesses PW.2 and CW.4 further establishes the demand. Further, in the case on hand, the acceptance and subsequent recovery of bribe amount has been proved by the independent witness and TLO. Therefore, when the recovery of bribe is proved by the evidence of independent witness then there is force attached to self serving testimony of PW.1.

128. In the case of Neeraj Dutta Vs. State (NCT of Delhi) reported in (2023) 4 SCC 731, the Constitution Bench of Hon’ble Supreme Court to the question referred to it i.e. ‘Whether, in the absence of evidence of complainant/direct or primary evidence of demand of illegal gratification, is it not permissible to draw an inferential deduction of culpability/guilt of a public servant under Section 7 and Section 13(1)(d) read with Section 13(2) of Prevention of Corruption Act, 1988 based on other evidence adduced by the prosecution?’, has answered by holding in following terms:

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 bribe giver 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 Section 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 Section 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. 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 Section 13 (1)(d) and (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) In so far 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 Section 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 point (e) as the former is a mandatory presumption while the latter is discretionary in nature.

89. In view of the aforesaid discussion and conclusions, we find that there is no conflict in the three judge Bench decisions of this Court in B. Jayaraj and P. Satyanarayana Murthy with the three judge Bench decision in M. Narasinga Rao, with regard to the nature and quality of proof necessary to sustain a conviction for offences under Sections 7 or 13(1)(d)(i) and (ii) of the Act, when the direct evidence of the complainant or “primary evidence” of the complainant is unavailable owing to his death or any other reason. The position of law when a complainant or prosecution witness turns “hostile” is also discussed and the observations made above would accordingly apply in light of Section 154 of the Evidence Act. In view of the aforesaid discussion, we hold that there is no conflict between the judgments in the aforesaid three cases.

90. Accordingly, the question referred for consideration of this Constitution Bench is answered as under:

In the absence of evidence of the complainant (direct/primary, oral/documentary evidence) it is permissible to draw an inferential deduction of culpability/guilt of a public servant under Section 7 and Section 13(1)(d) read with Section 13(2) of the Act based on other evidence adduced by the prosecution.”

129. As per law laid down in the above mentioned Neeraj Dutta Case, the 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 U/Sec. 7 and 13 (1)(d) (i) and (ii) of the Act. However, at the same time, it is also held in the said case that, “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”. Further, in the same judgment, at Paragraph No.88.6.(f), it is also held that, “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”. Thus, it is very clear from the judgment passed in Neeraj Dutta Case, even in the absence of direct and documentary evidence with regard to demand of bribe, the demand can be proved through circumstantial evidence.

130. In the present case, PW.1 who being the complainant, has entered the witness box and has specifically and positively deposed that accused No.1 has demanded bribe of Rs.20 Lakh from him for reducing his tax liability from Rs.80 Lakh to Rs.30 Lakh and further, accused No.2 has also demanded Rs.20 Lakh on behalf of accused No.1 and later it was agreed for Rs.5 Lakh by the accused No.2 and subsequently, on 08.09.2012 accused No.2 has accepted said bribe amount of Rs.5 Lakh from PW.1 in his office on behalf of accused No.1. Thus, there is clear and clinching direct evidence from PW.1 supported by the corroborative evidence of PW.2 and PW.9 coupled with Positive Phenolphthalein Test and documentary evidence marked at Ex.P1-Complaint, Ex.P53-Complaint Verification report, Ex.P6-Entrustment Mahazar, Ex.P9-Recovery Mahazar, and Ex.P43, P45 and P50-Call Detail Records, in proving the demand and acceptance of illegal gratification.

The Effect of Cross Examination of Material Witnesses of Prosecution:

131. The accused side have cross examined the material witnesses viz., PW.1-Complainant, PW.2- Independent Trap witness, PW.9-Trap Laying Officer and PW.17-Investigating officer, at length. However, nothing worth has been elicited from the mouth of said material witness so as to disbelieve their respective testimonies and to falsify the prosecution version. The accused side have tried to bring about few discrepancies in the cross examination of PW.1-complainant. It is contended by the learned counsels for the accused No.1 and 2 that, the evidence of PW.1 is not reliable and is not in consistency. It is the contention of accused side that, Ex.P1 is typed complaint. However, in his chief examination, PW.1 has referred that it is typed written complaint; but in his cross, at Paragraph No. 55 he admitted that he went to the CBI along with his written complaint. Further, in his cross at Paragraph No. 73, he specifically stated that, he had prepared said complaint in his own handwriting on 07.09.2012. Further, at Paragraph No.76, PW.1 stated that he submitted written complaint to the DIG, CBI. Thus, the defense side have contended that, PW.1 is not in consistent in deposing whether his complaint marked as per Ex.P1 is typed or written or hand written; therefore, his testimony is doubtful with respect to his own complaint itself.

132. It is true that, in his chief examination, PW.1 has stated that he has submitted a typed written compliant, but he has not stated that it is a handwritten complaint. It is true that, in his cross at Paragraphs No.55 and 76, he stated about written complaint, but not referred as handwritten complaint. It is also true that, in his cross examination at Paragraph No. 73, he specifically stated that, he had prepared said complaint in his own handwriting on 07.09.2012. However, the fact is that Ex.P1 is a computer typed complaint. Except said inconsistency relating to Ex.P1-complaint during his cross, nowhere he refers his complaint as handwritten.

133. Further, the defense side have highlighted another inconsistency in the evidence of PW.1. It is argued that, as per chief examination of PW.1 and as per complaint-Ex.P1, PW.1 has recorded the conversation between himself and accused from 01.09.2012 to 06.09.2012 and then same was transferred to two CDs by himself. However, in his cross examination at Paragraph No.53, he stated that, conversation between him and A-1 and A-2 for 7 days as mentioned by him in the complaint was recorded in his mobile and it was transferred into CD by CBI authorities.

134. The other inconsistencies elicited in the cross examination of PW.1 which, according to defense side, are fatal to the prosecution case are that, PW.1 stated that he does not remember to say that who had typed the contents of Ex.P1 and he admitted that Ex.P9-Recovery Mahazar was prepared at CBI office. By highlighting the inconsistencies as referred above, the learned counsel for the accused contended that since the testimony of PW.1 is not creditworthy and is full of discrepancies and contradictions; therefore, relying upon his evidence solely is not proper. Further, it is true that, during his cross examination at Paragraph No.65, PW.2 has stated that Ex.P6 and Ex.P9 were signed by him subsequently because proceedings could not be completed on 08.09.2012.

135. The inconsistencies highlighted by the defense side are bound to happen because of lapse of time in cross examining the PW.1 and PW.2 by the accused side. It is pertinent to note here that, the chief examination of PW.1 was completed on 07.03.2018 and further chief examination was completed on 09.10.2018. The cross examination of PW.1 by the accused No.2 was done on 10.12.2019; and accused No.1 has cross examined PW.1 in part on 10.12.2019 and prayed time for further cross examination. Further, on 22.01.2020, accused No.1 has completed the cross examination of PW.1. Thus, there is a gap of almost one and half year from the date of completion of chief examination to the date completion of cross examination of PW.1 by the accused No.1. Therefore, it cannot be expected from a prudent man to depose with arithmetical accuracy, that too, after one and half year after his chief examination. As such, the contradictions found in the cross examination of PW.1 which are highlighted by the defense side do not go to the root of the prosecution case. In other words, making contradictory statements during cross examination of PW.1 do not ipso-facto demolish the prosecution case, more particularly when there is direct evidence of PW.1 and supportive evidence of PW.2 and PW.9, in respect of demand and acceptance of bribe.

136. It has been held by the Hon’ble Apex Court in catena of judgments that, the inconsistencies, minor discrepancies or contradictions and irrelevant details which do not destroy the credibility of a witness cannot be labeled as major discrepancies, omissions or contradictions; and in appreciating the testimony of a witness, the court is not required to adopt a hyper technical approach by taking sentences torn out of context here and there from the testimony of a witness. Minor discrepancies of trivial nature that do not touch the core of the case do not affect the credibility of a witness.

137. The Hon’ble Supreme Court in the case of Bharwada Bhoginbhai Hirjibhai Vs. State of Gujarat [AIR 1983 SC 753], has cautioned in attaching too much of importance on minor discrepancies in the evidence of witnesses by making following observations:

“5…. We do not consider it appropriate or permissible to enter upon a reappraisal or re- appreciation of the evidence in the context of the minor discrepancies painstakingly highlighted by the learned counsel for the appellant. Overmuch importance cannot be attached to minor discrepancies. The reasons are obvious:

(1) By and large a witness cannot be expected to possess a photographic memory and to recall the details of an incident. It is not as if a video tape is replayed on the mental screen.

(2) Ordinarily it so happens that a witness is overtaken by events. The witness could not have anticipated the occurrence which so often has an element of surprise. The mental faculties therefore cannot be expected to be attuned to absorb the details.

(3) The powers of observation differ from person to person. What one may notice, another may not. An object or movement might emboss its image on one person’s mind, whereas it might go unnoticed on the part of another.

(4) By and large people cannot accurately recall a conversation and reproduce the very words used by them or heard by them. They can only recall the main purport of the conversation. It is unrealistic to expect a witness to be a human tape-recorder.

(5) In regard to exact time of an incident, or the time duration of an occurrence, usually, people make their estimates by guess work on the spur of the moment at the time of interrogation. And one cannot expect people to make very precise or reliable estimates in such matters. Again, it depends on the time-sense of individuals which varies from person to person.

(6) Ordinarily a witness cannot be expected to recall accurately the sequence of events which takes place in rapid succession or in a short time span. A witness is liable to get confused, or mixed up when interrogated later on.

(7) A witness, though wholly truthful, is liable to be overawed by the court atmosphere and the piercing cross- examination made by the counsel and out of nervousness mix up facts, get confused regarding sequence of events, or fill up details from imagination on the spur of the moment. The subconscious mind of the witness sometimes so operates on account of the fear of looking foolish or being disbelieved though the witness is giving a truthful and honest account of the occurrence witnessed by him–perhaps it is a sort of a psychological defence mechanism activated on the spur of the moment.”

138. As already stated above, the inconsistencies or minor discrepancies in the evidence which do not go to the root of the matter, especially when evidence is adduced by the witnesses after a long time from the chief examination/date of incident, cannot be considered as material discrepancies. On the other hand, we must appreciate the evidence of PW.1 in its entirety or totality and his cross examination cannot be isolated form his examination-in-chief. This my view is supported by the judgment of the Hon’ble Supreme Court passed in the case of Harijan Thirupala Vs. Public Prosecutor, High Court of Andhra Pradesh [AIR 2002 SC 2821]; wherein, it is held that:

“ In cases where the court entertains reasonable doubt regarding the guilt of the accused the benefit of such doubt should be go in favour of the accused. At the same time, the court must not reject the evidence of the prosecution taking it false, untrustworthy or unreliable on fanciful grounds or on the basis of conjectures and surmises. The case of the prosecution must be judged as a whole having regard to the totality of the evidence. In appreciating the evidence, the approach of the court must be integrated not truncated or isolated. In other words, the impact of evidence in totality on the prosecution case or innocence of accused has to be kept in mind in coming to the conclusion as to the guilt or otherwise of the accused. In reaching to a conclusion about the guilt of the accused, the court has to appreciate, analyze and access the evidence placed before it by the yardstick of probabilities, its intrinsic value and the animus of the witnesses. It must be added that ultimately and finally the decision in every case depends upon the facts of each case.” [Underlining by me for Emphasis]

139. In the case of State of Kerala Vs. K.A.Abdul Rasheed [Crl.A. @ SLP(Crl.) No.1808 of 2026 (2026 INSC 365)], the Hon’ble Supreme Court has considered an appeal by the State of Kerala against the order of acquittal by the High Court of Kerala in a Trap case under PC Act. The accused of the said case was a public servant alleged to have demanded and accepted a bribe of Rs.500/- from complainant. After full-fledged trial, the Trial court convicted the accused U/Sec.7 and Sec.13(2) read with Sec.13(1)(d) of PC Act and accordingly, imposed sentence. On appeal, the High Court has acquitted the accused mainly on the ground that ‘demand’ was not proved because evidence of complainant/PW.1 was inconsistent and the independent witness who accompanied PW.1 into the cabin of accused cabin was not examined. But Hon’ble Supreme Court has reversed the finding of High Court by setting aside the order of acquittal and restored the conviction order of the Trial court. At Paragraphs No.10, 13, 17 and 18, the Hon’ble Supreme Court has held as under:

“10. Jayaraj B3 as relied on by the learned Senior Counsel for the accused was a case in which the complainant disowned the very complaint and stated in his deposition that the amount paid to the accused was with a request to deposit it with the bank as a fee for renewal of his license. The complainant having disowned the very complaint made by him and there being no other evidence available, the prosecution failed to bring home the offence under Section 7, by the mere possession and recovery of the currency notes from the accused. The use of an illegal means and abuse of public office to obtain a pecuniary advantage also was held to be not established which is required to prove the offence under Section 13(1)(d)(i)&(ii) of the Act. Immediately, we have to observe that the facts here are quite distinct since the complaint is admitted, the pre and post trap proceedings are spoken to by the complainant and corroborated by one of the independent witnesses. Section 161 statement made by PW1, of the TSO having enquired as to whether the money was brought, confronted to PW1 by the prosecution in cross examination was denied. Probably the examination of the other independent witness, who accompanied PW1 to the cabin of the accused, would have led to credible evidence regarding the demand at the time the money was handed over. But that is not to say that the demand could not have been inferred otherwise from the deposition of PW1”.

13. We pause here to notice that the Constitution Bench in Neeraj Dutta2 had specifically dealt with the efficacy of the deposition of hostile witnesses. It referred with approval to Sat Paul v. Delhi Administration4 wherein it was held:

‘52. From the above conspectus, it emerges clear that even in a criminal prosecution when a witness is cross-examined and contradicted with the leave of the court, by the party calling him, his evidence cannot, as a matter of law, be treated as washed off the record altogether. It is for the Judge of fact to consider in each case whether as a result of such cross-examination and contradiction, the witness stands thoroughly discredited or can still be believed in regard to a part of his testimony. If the Judge finds that in the process, the credit of the witness has not been completely shaken, he may, after reading and considering the evidence of the witness, as a whole, with due caution and care, accept, in the light of the other evidence on the record, that part of his testimony which he finds to be creditworthy and act upon it. If in a given case, the whole of the testimony of the witness is impugned, and in the process, the witness stands squarely and totally discredited, the Judge should as a matter of prudence, discard his evidence in toto.’ [underlining supplied for emphasis].”

17. In fact, the High Court has noticed various portions in the deposition of PW1 where he admits the demand, especially certain portions of Ext. P1. The demeanor of the witness in the box, as discernible from the evidence recorded, especially his hesitance to make an answer immediately on a question being asked was also noticed by the High Court. The evidence of PW2, it was observed by the High Court, was not impeached by a shred in the cross- examination by the defense. Despite these observations, the High Court chose to find no demand having been established; according to us erroneously. The evidence of PW1 was pock marked with inconsistent versions, but it is for the court to scrutinize the same and find out whether there is anything creditworthy enabling proof of the allegation raised, which was done by the trial court.

18. Herein the demand was raised as a complaint before the vigilance and the statements to that extent made in the complainant before the Vigilance Officer in the presence of independent witnesses were affirmed by the complainant when he was examined as PW1, which PW2 the independent witness fully corroborated. This was further corroborated by the Vigilance Officer, the lead trap officer PW17, who wrote down the allegations on the oral complaint of PW1. He also spoke of the complaint having been read over to the complainant who confirmed it to himself; the scribe, and the independent witnesses present. We allow the appeal setting aside the order of the High Court and restoring the order of the trial court. Considering the fact that the sentence awarded is the statutory minimum for the offences we find no reason to tinker with the same.”

140. The facts of the above referred judgment and facts of the case on hand are some-how similar to each other; hence, the observations made in the above referred case are squarely applicable to the present case. In the case on hand, PW.1 has fully supported the case of prosecution and even if there are certain inconsistencies in the evidence of PW.1, the entire evidence of PW.1 cannot be swayed away by said inconsistencies. Though PW.1, at Paragraph No. 73 of his cross, has stated that he had prepared said complaint in his own handwriting on 07.09.2012, contrary to the record that Ex.P1 is typed one; but fact remains that his positive testimony with regard to demand of illegal gratification by the accused No.1 has not been shaken by the defense side. Therefore, as already appreciated the evidence of prosecution as above, there is sufficient oral evidence regarding demand and acceptance as it is stood proved by the evidence of PW.1 corroborated by the evidence of independent witness-PW.2 and PW.9-Trap Laying Officer. The acceptance of tainted money by accused No.2 and recovery of the same further strengthens and substantiate the case of prosecution.

141. The learned counsel for the accused No.2 has relied upon the judgment passed in Jayaraj B. Vs. State of Andhra Pradesh [(2014) 13 SCC 55] and argued that, mere recovery or possession of tainted money cannot substitute proof of demand. It is important note to here that, in Jayaraj case the complainant has disowned his complaint itself; but in the case on hand, PW.1 has specifically deposed that accused No.1 and 2 have demanded the bribe money; he deposed regarding approaching of CBI and lodging complaint; and also identified his complaint before the court as per Ex.P1; he deposed positively regarding Trap proceedings such as handing over the bribe money of Rs.5 Lakh to accused No.2 and subsequent recovery of said bribe amount of Rs.5 Lakh as per MO.3 to MO.7. Therefore, in the case on hand, PW.1 has fully supported the case of prosecution; hence, the judgment of Jayaraj Case does not come to the aid of accused side.

142. The learned counsels for the accused No.1 and 2 have raised strong objection for relying upon MO.1 and MO.2 by the prosecution, which are two CDs said to be containing conversation of PW.1, accused No.1 and 2 regarding alleged demand of bribe. It is argued that, in the absence of primary evidence i.e. Mobile Phone said to have been used for recording conversation as per MO.1 and MO.2, said two CDs [i.e. MO.1 & 2] cannot be taken into consideration. It is further argued that, the prosecution has not submitted even a certificate U/Sec.65-B of Indian Evidence Act, in order to consider MO.1 and 2 as secondary evidence; therefore, in the absence of Mobile Phone, used for recording conversation and a certificate U/Sec.65-B of Indian Evidence Act, there is no evidentiary value attached to MO.1 and 2 as such they are inadmissible in Evidence.

143. It is true that, the complainant/PW.1- Sri.A.K.Halim has deposed in his evidence that, he recorded the conversation of himself and accused No.1 and 2 from 01.09.2012 to 06.09.2012 in his Mobile Phone having SIM No.9846204397 held in the name of his wife-PW.16, and transferred said conversation into two CDs by him. It is also true that, said two CDs have been marked in the case as per MO.1 and MO.2 by the prosecution subject to objection. But, as rightly contended by the defense side, the prosecution has not produced said Mobile Phone of PW.1 before the court nor produced a certificate U/Sec.65-B of Indian Evidence Act in respect of said two CDs viz., MO.1 and MO.2 to lead as secondary evidence.

144. However, merely on the ground of non- production of Mobile Phone, which is used for recording of conversation as per MO.1 and 2, and merely because there is no certificate U/Sec.65-B of Indian Evidence Act in support of CDs-MO.1 and MO.2, the oral testimony of PW.1, which is best evidence, regarding demand of bribe, cannot be discarded at all.

145. Moreover, this court is not inclined to consider MO.1 and MO.2, the two CDs containing the conversation of PW.1, accused No.1 and 2 regarding alleged demand, in the absence of primary evidence i.e. Mobile Phone of PW.1, which is used for recording of conversation and due to non-production of certificate U/Sec.65-B of Indian Evidence Act, to lead secondary evidence on MO.1 and 2. Hence, this court excludes MO.1 and MO.2 from the prosecution evidence. However, even if we exclude MO.1 and 2 from the prosecution evidence, still there is best evidence from PW.1 supported by the evidence of PW.2 and PW.9, in proving the demand of illegal gratification.

146. The learned counsel for the accused No.1 has cross examined PW.1 at length. But on perusal of entire cross examination of PW.1, it is evident that, there is no any single suggestion has been put to PW.1 to the effect that, accused No.1 never demanded illegal gratification from PW.1 in order to reduce the taxable amount to Rs.30 Lakh from Rs.80 Lakh and what PW.1 deposed in his examination-in-chief as well as in his complaint- Ex.P1, regarding alleged demand is totally false. At this juncture, it is relevant to extract the Paragraph No.114 of cross examination of PW.1 done by the accused No.1. The Paragraph No.114 of cross of PW.1 reads as under;

“114. It is false to suggest that A.1 as a public servant working in IT Department placed any demand for payment of illegal gratification in order to close my IT demand notice issued from his office”.

Though this suggestion has been denied by PW.1, but the very suggestion itself is misleading. It is because, though PW.1 denies said suggestion, but if we go by literal understanding of said suggestion, the effect of said denial would be that PW.1 virtually admits that ‘A.1 as a public servant working in IT Department, has not placed any demand for payment of illegal gratification in order to close my IT demand notice issued from his office.’ Therefore, it appears that, the accused side have purposely put said suggestion as a matter of strategy and in order to confuse the witness or to get reverse positive admission. On the other hand, it is also possibility that said suggestion of learned counsel for the accused No.1 might have been wrongly typed by omitting the words ‘has not’, which ought to have been typed after the words ‘IT Department’ in the said suggestion. Be that as it may, accused side cannot take disadvantage of Paragraph No.14 of cross of PW.1 by arguing that PW.1 himself has admitted that accused No.1 has not placed any demand for illegal gratification from him by denying said suggestion put as under Paragraph No.14, when there is no specific denial of suggestions as to demand of bribe and when there is consistent evidence from PW.1 in deposing positively regarding demand of bribe by accused No.1, in his examination-in-chief.

147. It is contended by the learned counsel for the accused No.1 that, PW.1-Sri.A.K.Halim has not produced any residential documents to show the proof of his stay in Bengaluru and to show that he used to submit IT Returns in Bengalru. But it is on record that PW.1 has been submitting his IT returns since 2005. Therefore, the allegation of demand of bribe against accused No.1 is nothing to do with the occupation or residential proof of PW.1 as the Income Tax Department has accepted his IT Returns and no query has been raised with his residential proof by the IT Dept. Even there is no any material to suggest that, the accused No.1 has raised any objection or asked any proof of residence of PW.1 in his IT notice sent to PW.1.

148. Further, during the cross of PW.1, learned counsel for the accused No.1 has suggested that PW.1 caused threat to accused No.1 to withdraw IT due notice of Rs.31,86,487/- and so also, PW.1 caused threat to accused No.1 on 07.09.2012 to withdraw the IT notice. This suggestion has been denied by PW.1. However, through this suggestion, accused No.1 has tried to project that PW.1 gave threat to him for issuing IT Notice and thereby, accused No.1 tried to demonstrate that because of said IT notice, he was falsely implicated him in the case. If at all, PW.1 had posed a threat to accused No.1 either on 07.09.2012 or prior to said date, then he should have lodged a police complaint against PW.1 or at least, brought to the notice of his higher officials. But that was not done by the accused No.1. Therefore, without submitting a complaint before the police or not bringing to the knowledge of his higher officials, the alleged threat by PW.1 to accused No.1, does not inspire the confidence of the court.

149. Defense as to presence of accused No.1 in the office of accused No.2 at the time of Trap: In his written arguments as well as in his statement filed U/Sec.313(5) of Cr.P.C., the accused No.1 has taken the defense that, on the date of incident i.e. on the date of Trap on 08.09.2012, he had been to office of accused No.2, along with his 8 year old Son-Vishal Nagaraj, to express his gratitude to accused No.2 for helping him in getting treatment for his mother-in-law at Mahaveer Jain Hospital, Bengaluru and seek refund of payment he had made in cash to the Hospital.

150. Further, as per his own statement submitted U/Sec.313(5) of Cr.P.C., at Paragraph No.5, accused No.1 has stated that, complainant called him on 01.09.2012 when he was traveling in Coorg with his friends and relatives. Further, during the cross examination, it was suggested to PW.17-I.O., that, on 01.09.2012 and 02.09.2012, accused No.1 was at Kushalanagar along with his family. That means, on 01.09.2012 or on 02.09.2012, accused No.1 was in Kushalanagar (Coorg). But as per medical records of his mother-in-law produced along-with his statement U/Sec.313(5), she was discharged from Mahaveer Jain Hospital on 01.09.2012 after undergoing a surgery to her foot related issue. When his mother-in-law was admitted to Hospital on 29.08.2012 and discharged on 01.09.2012, it is very difficult to believe that accused No.1 was in Coorg on 01.09.2012 along with his family, friends and relatives, that too, when the mother of his wife was hospitalized from 29.08.2012 and discharged on 01.09.2012. Moreover, the accused No.1 has not produced documents as to cashless insurance of his mother-in-law. Therefore, the defense taken by the accused No.1 is not believable.

151. Contention as to ‘No work was pending’ with accused No.1: It is contended that, Ex.P16-Assessment Order for the Assessment Year 2009-10 is dated:06.09.2012, but the Trap is conducted on 08.09.2012; thus, the assessment proceedings had culminated two days before alleged payment of bribe amount. Therefore, there was no pending official act or work and no discretion was left to be exercised by the accused No.1. Such being the case, there is no question of neither demand of illegal gratification by the accused No.1 nor inducing accused No.1-public servant by the accused No.2 for any official act; hence, the charge U/Sec.7 of PC Act is not established and consequently, offence U/Sec. 8 of the Act also fails.

152. It is true that, Ex.P16-Assessment Order is dated:06.09.2012. It is also true that trap was conducted on 08.09.2012. But the fact is that Ex.P16 has been seized from the office of accused No.2. Though Ex.P16 was ready on 06.09.2012 but the same was not forwarded to complainant-PW.1. There was no proper explanation from accused No.2 as to why Ex.P16 was there in his office as on date of trap. As seen from the evidence on record, it is very clear that, accused No.1 has handed over the EX.P16 to accused No.2 for showing to PW.1 that assessment order is ready as agreed and after payment of bribe amount then said assessment order will to be handed over to PW.1.

153. The prosecution has examined PW.5- Sri.Bhawani Singh in order to prove that Ex.P16- Assessment order has not been dispatched to PW.1 nor handed over to him till 08.09.2012. During his Evidence, PW.5 has identified the Dispatch Register for the period from 02.12.2011 to 07.09.2012 maintained by the ITO Ward No.4(3), Bengaluru, which is marked at Ex.P40. According to PW.5, on verification of Ex.P40-dispatch register pertaining to 03.09.2012 to 07.09.2012, there is no reference of dispatching register letter to Sri.A.K.Halim [i.e. Complainant/PW.1] during the above said period. That means the assessment order has not been issued to PW.1 and it is clear that it is only shown to PW.1 in order to demand illegal gratification.

154. Further, the prosecution has examined PW.6- Sri.A.K.Andani in order to prove that there is no entry made in assessment register regarding Ex.P16. PW.6 has deposed regarding assessment register and entry made therein. The assessment register identified by PW.6 is marked as per Ex.P37. As per evidence of PW.6, said register does not contain regarding assessment order dated:06.09.2012 made by Sri.Nagaraj [i.e. accused No.1] in respect of IT return of PW.1-Sri.A.K.Halim for the assessment year 2009-10. In his cross, PW.6 has denied the suggestion that on 06.09.2012 accused No.1 handed over Assessment Order to him to serve on Assessee [i.e. to PW.1-Sri.A.K.Halim] and the same was not entered in the D and CR Register because of excess work and pendency of files. Therefore, from the evidence of PW.5 and PW.6, it is very clear that, Ex.P16 has not been issued to PW.1 on 06.09.2012 but it was kept ready with dated as ‘06.09.2012’ and it was only shown to PW.1 on 07.09.2012 by PW.15 at the office of accused No.2 at his instance, with intention to obtain a pecuniary advantage as agreed from PW.1.

155. Contention as to non-examination of CW.20- Sri.Hitendra, then DIG & HOB, CBI, Bengaluru: It is contended by the learned counsel for the accused No.2 that, CW.20-Sri.Hitendra then DIG & HOB, CBI, Bengaluru, who received the complaint and registered the FIR as per Ex.P54, has not been examined in the case, though he was present throughout the Pre and Post-Trap Proceedings; therefore, his non-examination before the court is fatal to the prosecution case. This contention of the defense side is not acceptable one in view of settled principles of criminal jurisprudence. It is true that the prosecution has not examined CW.20, who has received the complaint and registered the FIR in the case on hand. However, even if CW.20 was examined, there would be no any gain for the accused as the role of CW.20 in the present case is limited only to receipt of complaint from PW.1 and registration of FIR. Though, as contended by the defense side, he was present throughout the Pre and Post-Trap Proceedings, but he never participated in the said proceedings. If his evidence was so important and gainful for the defense side, then there was every opportunity for them to summon him and examine him; but that was not done by the defense side. Therefore, non-examination of CW.20 is of no consequence in any manner.

156. My above view is supported by the judgment of Hon’ble High Court of Delhi passed in the case of Manoj Kumar Vs. CBI [(Crl.A.No.733/2002) Neutral Citation 2026 DHC 796]; wherein the Hon’ble High Court has held as under:

“26.1. As far as, the non-examination of other officials present along with accused is concerned, is also of no consequence in this case as evidence has to be weighed and not counted. The complainant in a case of this nature is not an accomplice and the question to be considered is whether his testimony can be relied on or believed to substantiate the prosecution case of demand of the bribe. It is not always necessary that his testimony has to be corroborated by independent evidence”. [Underlining by me for Emphasis]

157. Contention as to non-taking of hand wash of complainant-PW.1: It is another contention of learned counsel for the accused No.2 that, the hand wash of PW.1-complainant was not taken by the TLO and said exercise was capable of establishing that the tainted notes passed through the hands of complainant; but that was not performed. It is contended that, the very handing over the alleged bribe amount requires to be proved by the said exercise which is in fact not done by the TLO and not taking of hand wash of complainant-PW.1 goes to the root of prosecution case which creates suspicion on alleged transfer of tainted currency notes by PW.1 to the accused person.

158. The above contention of learned counsel for the accused No.2 does not hold ground. It is because, non taking of hand wash of complainant in a corruption case is not at all fatal to the prosecution. In trap cases, the crucial evidentiary requirement is the chemical examination of hand wash of accused and not of the complainant. That hand wash of accused is vital to show that he came in contact with tainted currency notes. If the chemical examination results in positive finding then it becomes a corroborative evidence for proof of demand and acceptance of bribe amount. The traps conducted in corruption cases, are always accused centric. It is because, it is the very important investigative step for the I.O. to take the hand wash of accused after handling the tainted money in order to prove that he has accepted the bribe money. Therefore, non taking of hand wash of complainant is not fatal to the prosecution case as hand wash of complainant is only optional and omission of the same does not destroy the core of the matter.

Defense as to handling of tainted money by the accused No.2:

159. The evidence on record goes to show that accused No.2 has accepted the tainted currency notes form PW.1 thereby, he handled the same. Therefore, his both hand washes collected and wash of his hands turns into pink colour. Thus, the presence of Phenolphthalein powder in the hands of accused No.2 proves that he handled the said currency notes. However, it is the defense of accused No.2 that, he never demanded or accepted any bribe amount for himself or for any other person. That the alleged presence of Phenolphthalein powder in the hands of accused No.2 has been duly explained in the cross examination of PW.1 as to how accused No.2 came into contact with said tainted currency notes. Thus, the defense side have tried to demonstrate as to how the tainted currency notes came into contact with accused No.2. At Paragraph No.67 of cross examination of PW.1, a suggestion has been put to PW.1 to the effect that, ‘accused No.2 pushed said Rs.5 Lakh bundle back to him on table directing him to make payment of the same on his own in the IT office’ and also suggested that, ‘he will fully pushed back the money of Rs.5 Lakh bundle to accused No.2 insisting him to deposit the said amount in the IT office’. However, said two suggestions have been denied by PW.1.

160. Thus, through said suggestions, the accused side have tired to build up a defense theory that PW.1 wanted to pay his tax amount through accused No.2; therefore, when PW.1 was trying to handed over said tainted bribe money to accused No.2 in his office, then accused No.2 has pushed the said Rs.5 Lakh bundle back to PW.1 on the table, then he came in contact with said tainted money and during that exercise, his hands were contacted with phenolphthalein powder. But this defense of accused No.2 is not at all acceptable. As per Ex.P16-Assessment Order, which was seized from the office of accused No.2, the tax payable amount is at Rs.31,86,487/-. If really complainant-PW.1 wanted to pay his tax due of Rs.31,86,487/- [as per Ex.P16] through accused No.2-chartered accountant in his office on 08.09.2012, then he should have brought and tried to hand over the total tax amount of Rs.31,86,487/- to accused No.2. There is no need for PW.1 to pay the tax amount in installment of Rs.5 Lakh through the accused No.2. Therefore, this defense of accused No.2 cannot be believable and the same does not hold water. Moreover, PW.1 has denied a suggestion to the effect that, ‘he went to pay Rs.5 Lakh to accused No.2 in his chamber to make payment of IT Tax along with the Challan marked as per Ex.P16’. Thus, the defense of accused No.2 that he came in contact with tainted currency notes only when he pushed back the tainted money when PW.1 requested to pay his tax due through him, is not acceptable.

161. It is further contended that, the alleged demand of bribe was for Rs.20 Lakh, but alleged recovery is only Rs.5 Lakh; and there is no evidence on record to show recovery of balance amount of Rs.15,00,000/. It is true that, Rs.5 Lakh of bribe money only has been recovered. Though the demanded bribe amount was for Rs.20 Lakh, but the testimony of PW.1, in his examination-in-chief at Paragraph No.8, specifically discloses that when he told accused No.2 that he cannot arrange for Rs.20 Lakh and he can arrange only Rs.5 Lakh; for which, accused No.2 said it is okay and asked him to come on 08.09.2012 to his office. Thus, as per evidence of PW.1, when he is unable to arrange Rs.20 Lakh, accused No.2 agreed for Rs.5 Lakh; accordingly, PW.1 has carried Rs.5 lakh trap amount to the office of accused No.2 and the same was recovered. Therefore, the contention of accused side that prosecution has not recovered balance amount of Rs.15 Lakh, though the alleged demand was for Rs.20 Lakh is meaningless.

162. It is another contention of learned counsel for the accused No.2 that, the complaint marked at Ex.P1 does not spell out any demand of illegal gratification by the accused No.2 from PW.1. However, on keen perusal of complaint-Ex.P1, it is evident that, at un-numbered Paragraph No.8 of Ex.P1-complaint, PW.1 has specifically mentioned that, “Accordingly, I came to Bangalore on 5.9.2012, I spoke to Shri.Nagin Kincha, who asked me about the bribe money’. Further, in the same Paragraph of Ex.P1, PW.1 has mentioned that, ‘Accordingly, I met Mr.Nagin at his office at about 5.30 PM, who asked the bribe money for that I told him that I have not brought it’. Further, in the same Paragraph of Ex.P1, PW.1 has further mentioned that, ‘Then Shri Nagin told me to call him at 12.00 PM on 7.9.2012 and then to go to Mr.Nagin’s office with money. After paying him the bribe money, he will give me the order’. Thus, PW.1 has specifically stated in his complaint-Ex.P1 on three occasions regarding demand of illegal gratification by the accused No.2. Therefore, the contention of accused No.2 that complaint-Ex.P1 does not spell out any demand of illegal gratification by accused No.2 is not acceptable.

163. It is contended in the written arguments of accused No.2 that, CW.20-Sri.R.Hitendra, who received complaint and registered the FIR, but before registration of FIR, no preliminary enquiry was done with regard to alleged demand. However, after receipt of complaint on 07.09.2012 by CW.20, CW.20 entrusted the said complaint to PW.9 for verification/preliminary enquiry on 07.09.2012 itself and after verification of complaint done by PW.9, the FIR was registered on 08.09.2012 by CW.20. Therefore, there is no truth in the contention of accused No.2 that without verifying foundational facts, the registration of FIR is fatal to the prosecution.

164. It is further contended that, PW.9 has not collected original written complaint from CW.20, nor collected any material from PW.1 to ascertain whether any work was actually pending with accused No.1-public servant; no material is disclosed in the verification report to show that as on 07.09.2012 and 08.09.2012, whether the accused No.2 has induced or influenced accused No.1 to reduce the tax liability of PW.1. It is the further contention that, the verification report does not indicate telephonic calls were made either to accused No.1 or accused No.2 from PW.1 to confirm any alleged demand for illegal gratification on 07.09.2012 and 08.09.2012; and the verification report is completely silent regarding the seizure, preservation, or examination of the original mobile phone allegedly used to record the conversation and also no material shown in the verification report regarding authenticity and genuineness of Audio recordings i.e. CDs-MO.1 and 2.

165. It is important to note here that, verification of the complaint being conducted only to confirm whether alleged complaint makes a cognizable offence or not, as held in Lalita Kumari Case. There is no need to mentioning of all details [as contended by the accused No.2 as above] in the complaint verification report, as all the details as contended by the accused No.2 are the subject matter of investigation. The Ex.P53-Verification Report reveals that, PW.9 has perused the complaint- Ex.P1, heard the conversation of accused No.1 & 2 with PW.1 found in MO.1 and 2 regarding demand of bribe and through his source, PW.9 came to know that there is unholy nexus between accused No.1 and 2 and also found that work is pending with accused No.1 for which PW.1 had approached accused No.2 and therefore, PW.9 found that the allegations made in the complaint are genuine. This much of verification is sufficient enough to arrive at conclusion that there is cognizable offence.

166. It is another important contention of accused side that, PW.9-TLO, is the Inspector of Police, CBI Bengaluru; hence, he is an interested witness; therefore, his testimony cannot be believed and relied upon. In the case of State of UP Vs. Dr.G.K.Ghosh [1984 (1) SCC 254], the Hon’ble Supreme Court has held that:

“It is now time to deal with the criticism urged as a matter of course in the context of the police officer leading the raiding party-namely that he is an interested witness. This is true, but only to an extent a very limited extent. He is interested in the success of the trap to ensure that a citizen, who complains of harassment by a Government officer making a demand for illegal gratification, is protected and the role of his department in the protection of such citizens is vindicated. Perhaps it can be contended that he is interested in the success of the trap so that his ego is satisfied or that he earns a feather in his cap. At the same time it must be realised that it is not frequently that a police officer, himself being a Government servant, would resort to perjury and concoct evidence in order to rope in an innocent Government servant. In the event of the Government servant concerned refusing to accept the currency notes offered by the complainant, it would not be reasonable to expect the police officer to go to the length of concocting a false seizure memo for prosecuting and humiliating him merely in order to save the face of the complainant, thereby compromising his own conscience. The court may therefore, depending on the circumstances of a case, feel safe in accepting the prosecution version on the basis of the oral evidence of the complainant and the police officers even if the trap witnesses turn hostile or are found not to be independent”.

167. Further, in the case of Central Bureau of Investigation Vs. Baljeet Singh [2026 INSC 221] the Hon’ble Apex Court has held at Paragraphs No.27 and 29 that;

“27. It was categorically held in Basawan Singh, by a Constitution Bench that there is no inflexible rule of discarding the testimony of the persons in the raiding party, unless independent corroboration is available. The trite law is that the testimony of an interested or partisan witness has to be scrutinized with care, and it is not that of an accomplice. Neither is the complainant an accomplice, nor can the persons involved in the raiding party be considered to be interested since they are exercising a public duty without any personal rancour. In the instant case, when the independent witness had not fully supported the prosecution story sufficient corroboration was found from their deposition. A Constitution Bench of this Court in Neeraj Dutta Vs. State (Govt. of NCT of Delhi) approved Prakash Chand and referred also to Sat Paul V. Delhi Administration to hold that “even if a witness is treated as “hostile” and is cross examined, his evidence cannot be written off altogether but must be considered with due care and circumspection and that part of the testimony which is creditworthy must be considered and acted upon” (sic-para 67). The contention taken by the defense that the conduct of the accused when challenged by the Inspector was inadmissible under Section 162 was repelled. Relying on Himachal Pradesh Administration V. Shri Om Prakash, it was held that, when an accused person leads a police officer to a particular location where stolen articles and weapons are concealed, which have a connection with the offence alleged, on such recovery, the concealment would be admissible as relevant conduct under Section 8 of the Indian Evidence Act, 1872 irrespective of whether any statement by the accused contemporaneously with or antecedent to such conduct, falls within the purview of Section 27 of the Evidence Act.

28. xxxxxxxxxxxxxxxx

29. We are unable to accept the order of acquittal passed by the High Court insofar as A2 is concerned, especially noticing the demand having been specifically spoken of by PW1 and the same having been stated in his complaint before the CBI. The pre-trap proceedings were also clearly established by the evidence of PW1, PW10, PW18 and PW22. Insofar as the trap proper is concerned, there is complete corroboration of the testimony of PW1 by that of PW22, the TLO. There is also sufficient corroboration from PW10 & PW18, the independent witnesses regarding the apprehension of a person, who was identified in Court by PW10 and though not identified by PW18, it was PW18 who made the recovery of the envelope from the coat pocket of the apprehended person, who was A2. The hand wash of A2 also stood established beyond doubt. The marked notes were identified from the numbers taken down in the HOM at the time of pre-trap proceedings, corroborated by all the above witnesses”.

168. Thus, as per the dictum laid down in State of UP Vs. Dr.G.K.Ghosh Case, the court can feel safe in accepting the prosecution version on the basis of the oral evidence of the complainant and the police officers even if the trap witnesses turn hostile or are found not to be independent; and as per dictum laid down in Central Bureau of Investigation Vs. Baljeet Singh, the officials forming part of raiding party or trap party in bribery cases cannot be treated as interested witnesses merely because they participated in the trap proceedings.

169. In the case on hand, PW.9-TLO performed his official public duty while conducting the trap and not acted in his personal capacity to meet his personal animosity. Contrary, the defense side have not demonstrated that PW.9-TLO had any grudge against accused No.1 or 2 to depose falsely against them nor concocted a false case against them. He has done his duty by deposing what he has done and what he noticed during pre-trap proceeding as well as post-trap proceedings. Moreover, his evidence is supported and corroborated by the evidence of independent trap witness-PW.2. Therefore, he cannot be and should not be referred to as ‘Interested Witness’ rather, he should be considered as ‘Duty Bound Witness’. Hence, the testimony of PW.9 cannot be discarded merely on the ground that he was the member of trap team/raiding party and he led the trap team.

170. It is vehemently argued by the learned counsel for the accused No.2 that, none of the ingredients of Sec.8 of PC Act are attracted against accused No.2. He argued that, the ingredients of inducement by corrupt or illegal means is totally absent in the charge leveled against accused No.2 as Sec.8 of PC Act is not attracted by the receipt of money simpliciter. The gratification must be the motive or reward for inducing a public servant, and the inducement must be by corrupt or illegal means. However, in the case on hand, there is no any inducement offered to accused No.1 by the accused No.2 either through corrupt or illegal means nor the prosecution has led any evidence to show that by way of what corrupt or illegal means, the accused No.2 is said to have employed or proposed to employ upon accused No.1. Hence, the prosecution has miserably failed in proving the offence punishable U/Sec.8 of PC Act, against accused No.2.

171. At this juncture, it is relevant to reproduce the provision of Section 8 of PC Act-1988 for better understanding. As the alleged commission of offence is of dated:08.09.2012 and as Sections 7 to 10 of the Act were amended by the amendment act of 2018 with effect from 26.07.2018; hence it is better to extract the provision of old Section 8 of the PC Act-1988 [i.e. prior to amendment], which reads as under:

“8. Taking gratification, in order, by corrupt or illegal means, to influence public servant.- Whoever accepts or obtains, or agrees to accept, or attempts to obtain, from any person, for himself or for any other person, any gratification whatever as a motive or reward for inducing, by corrupt or illegal means, any public servant, whether named or otherwise, to do or to forbear to do any official act, or in the exercise of the official functions of such public servant to show favour or disfavour to any person, or to render or attempt to render any service or disservice to any person with Central Government or any……… shall be punishable with imprisonment for term which shall not be not less than [three years] but which may extend to [seven years] and shall also be liable to fine”.

172. In the case of Babji Vs. State of Andhra Pradesh [(2018) 17 SCC, 732], the Hon’ble Apex Court has summarized the basic ingredients of Section 8 of PC Act as under:

“5. In order to establish the offence under Section 8 of the Prevention of Corruption Act it must be proved: (i) That the accused accepted or obtained, or agreed to accept, or attempted to obtain, from someone; (ii) For himself or for some other person; (ii) Any gratification whatever; (iv) As a motive or reward for inducing by corrupt or illegal means any ‘public servant’ to do or forbear to do any official act or to show favour or render any service to any of the persons specified in the section”.

173. In the case on hand, as already discussed above, it is proved that accused No.2 though not a public servant but he accepted the illegal gratification of Rs.5 Lakh from PW.1 on behalf accused No.1-Public Servant as a motive or reward for reducing the taxable amount of Rs.80 Lakh to Rs.30 Lakh, which is payable by the PW.1 in respect of his Assessment Year 2009-10 and thereby accused No.2 has committed the offence punishable under Section 8 of PC Act. Thus, the very ingredients of Section 8 of the PC Act are well attracted against the accused No.2. It is important to note here that, the accused No.2 failed to give proper and convincible explanation as to how he came into possession of tainted currency notes during the trap except stating he touched said tainted currency notes when he pushed back said currency notes when PW.1 insisting him to pay Rs.5 Lakh towards his tax payment.

174. At this juncture, it is worth to refer the decision passed in the case of State of Gujarat V. Navinbhai Chandrakant Joshi & Others [(2018) 9 SCC 242]. In the said matter, accused No.2 was a private individual who obtained gratification from complainant on behalf of accused No.1-Public Servant and tainted bribe money was recovered from the possession of accused No.2. The Trial court has convicted both the accused. But on appeal, the High Court has reversed the judgment of conviction. When the matter was reached to Hon’ble Supreme Court, it has confirmed the judgment of the trial court. In the said matter, the Hon’ble Supreme Court has held that,

“10. The High Court acquitted the accused on the ground that there was no recovery from accused No.1-J.D.Patel and that the demand by the accused persons has not been established by the prosecution. The High Court took the view that accused No.2-Navinbhai had no idea for what purpose the money was given to accused No.1-J.D. Patel by PW-1 and therefore, it cannot be said that accused No.2-Navinbhai had accepted the bribe amount upon demand to PW-1. The High Court was not right in brushing aside the evidence of PW- 1 who has clearly stated that accused No.1-J.D. Patel demanded bribe of Rs.1,000/- and the same was settled for Rs.500/- for expediting the matter for conversion of the plot for non-agricultural purpose. Recovery of the tainted currency notes from accused No.2-Navinbhai and the presence of anthracene powder in the right hand of accused No.1-J.D.Patel and the pocket of the shirt of accused No.2-Navinbhai clearly show that they acted in tandem in the demand and acceptance of the bribe amount. When the demand and acceptance of illegal gratification has been proved by the evidence of PWs 1 and 3, the High Court was not right in holding that the demand and acceptance was not proved. The findings of the trial court did not suffer from any infirmity and the High Court was not justified in setting aside the conviction of the accused”.

175. It is to be noted here that, the above said judgment was later on modified by the Hon’ble Supreme Court and reported in State of Gujarat Vs. Navinbhai Chandrakant Joshi [(2019) 13 SCC 361] by observing as under;

“1. This is a petition filed by Respondent 1- Accused 2 to modify the judgment dated 17-7- 2018 in State of Gujarat v. Navinbhai Chandrakant Joshi. In para 3 of the judgment, Respondent 1-Accused 2 has been stated to be the government servant, which is not factually correct. Though, Respondent 1-Accused 2 is not a government servant, bribe amount in currency notes of Rs.500 were recovered from him only; there were signs of anthracene powder noticed from the shirt pocket of Respondent 1-Accused 2. Considering the fact that currency notes were recovered from Respondent 1-Accused 2, in our view, the ingredients of Section 8 of the Prevention of Corruption Act, 1988 are established. The conviction of Respondent 1-Accused 2 under Sections 7 and 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 is modified as the conviction under Section 8 of the said Act, and the sentence of one year imposed is reduced to six months.

2. The judgment shall be modified accordingly.”

176. The facts of the above referred case and facts of the present case are appeared to be similar in nature. Therefore, the observations made in the above referred case are aptly applicable to the case on hand. In the case on hand also, tainted currency notes of Rs.5 Lakh in five bundles were recovered from accused No.2 only as he handled the same; and the presence of Phenolphthalein is found in both the hand finger washes of accused 2. Therefore, the ingredients of Section 8 of the Prevention of Corruption Act-1988 are well established by the prosecution.

The theory of Criminal Conspiracy:

177. The case of the Prosecution also revolves around the criminal conspiracy allegedly hatched by the accused No.1 and 2, in order to obtain pecuniary advantage from PW.1 relating to latter’s Tax matter. It is the prosecution case that, the accused No.1- Sri.V.Nagaraj has demanded a bribe amount of Rs.20 Lakh from PW.1 in order to reduce the taxable amount from Rs.80 Lakh to Rs.30 Lakh, in furtherance of conspiracy with accused No.2-Sri.Naginchanda Kincha, and accused No.2 played an active role in the conspiracy by accepting the bribe amount of Rs.5 Lakh from PW.1 on behalf of accused No.1, in his office on 08.09.2012.

178. It is vehemently argued by the accused side that, there is no material to show, either direct or circumstantial evidence, that accused No.2 had any nexus with accused No.1, in passing the assessment order in respect of tax matter of PW.1. Even in his evidence, PW.1 himself has admitted that accused No.2 has not participated an any of the proceedings in the Income Tax Department and also admitted that he has gone to the office of accused No.2 to review assessment order. It is contended that, conspiracy requires proof of a prior meeting of minds and in the case on hand, it is not established by the prosecution that there was an association acquaintance or a professional relationship between accused No.1 and 2.

179. It is further contended that, the prosecution rests the conspiracy on the Call Detail Records marked at Ex.P43, P45 and P50; however, call details establish contact only, but they do not establish the content and content is what conspiracy requires. That the CDR data can only be corroborative in character and cannot by itself establish the charge. That the prosecution has not produced any iota of evidence to prove that the accused No.1 and 2 have conspired with each other in demanding and accepting the bribe amount from PW.1. Thus, it is argued that, the prosecution has failed on threshold itself to prove the conspiracy allegedly hatched by the accused No.1 and 2.

180. Before considering the evidence on record to prove the conspiracy, it is worth to refer to the relevant provision of law on the subject of criminal conspiracy. Section 120-A of IPC defines “criminal conspiracy”. Section 120-A of IPC reads as under:

“120-A. Definition of criminal conspiracy.-When two or more persons agree to do, or cause to be done

(i) an illegal act, or

(ii) an act which is not illegal, by illegal means such an agreement is designated as “criminal conspiracy”.

Provided that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof.

Explanation.- It is immaterial whether the illegal act is the ultimate object of such agreement, or is merely incidental to that object.”

181. Thus, the basic ingredients of the offence of criminal conspiracy are: (i) an agreement between two or more persons; (ii) the agreement must relate to doing or causing to be done either (a) an illegal act; or (b) an act which is not illegal in itself but is done by illegal means. What are the basic ingredients of criminal conspiracy and the manner in which the same is required to be established has been well elaborated by the Hon’ble Supreme Court in the case of State of Kerala Vs. P. Sugathan & Anr. 2000 (8) SCC 203. It is held that:

“We are aware of the fact that direct independent evidence of criminal conspiracy is generally not available and its existence is a matter of inference. The inferences are normally deduced from acts of parties in pursuance of purpose in common between the conspirators. This Court in V.C. Shukla v. State [1980(2) SCC 665] held that to prove criminal conspiracy there must be evidence direct or circumstantial to show that there was an agreement between two or more persons to commit an offence. There must be a meeting of minds resulting in ultimate decision taken by the conspirators regarding the commission of an offence and where the factum of conspiracy is sought to be inferred from circumstances, the prosecution has to show that the circumstances giving rise to a conclusive or irresistible inference of an agreement between the two or more persons to commit an offence. As in all other criminal offences, the prosecution has to discharge its onus of proving the case against the accused beyond reasonable doubt. The circumstances in a case, when taken together on their face value, should indicate the meeting of the minds between the conspirators for the intended object of committing an illegal act or an act which is not illegal, by illegal means. A few bits here and a few bits there on which the prosecution relies cannot be held to be adequate for connecting the accused with the commission of the crime of criminal conspiracy. It has to be shown that all means adopted and illegal acts done were in furtherance of the object of conspiracy hatched. The circumstances relied for the purposes of drawing an inference should be prior in time than the actual commission of the offence in furtherance of the alleged conspiracy”.

182. In the case of State (NCT of Delhi) Vs. Navjot Sandhu @ Afsan Guru [(2005) 11 SCC 600], better known as Parliament Attack Case, the Hon’ble Supreme Court has held that,

“97. Mostly, the conspiracies are proved by the circumstantial evidence, as the conspiracy is seldom an open affair. Usually both the existence of the conspiracy and its objects have to be inferred from the circumstances and the conduct of the accused. (Per Wadhwa, J. in Nalini’s case (supra) at page 516). The well known rule governing circumstantial evidence is that each and every incriminating circumstance must be clearly established by reliable evidence and “the circumstances proved must form a chain of events from which the only irresistible conclusion about the guilt of the accused can be safely drawn and no other hypothesis against the guilt is possible. (Tanviben Pankajkumar Case, SCC P.185, para 45) G.N.Ray,J. in Tanviben Pankaj Kumar observed that this Court should not allow the suspicion to take the place of legal proof.

98. As pointed out by Fazal Ali, J, in V.C.Shukla Vs. State [1980 (2) SCC 665],

“[I] In most cases it will be difficult to get direct evidence of the agreement, but a conspiracy can be inferred even from circumstances giving rise to a conclusive or irresistible inference of an agreement between two or more persons to commit an offence.”

In this context, the observations in the case Noor Mohammad Yusuf Momin Vs. State of Maharashtra (AIR 1971 SC 885) are worth noting: (SCC pp.699- 700)

“[I] In most cases proof of conspiracy is largely inferential though the inference must be founded on solid facts. Surrounding circumstances and antecedent and subsequent conduct, among other factors, constitute relevant material.”

183. Thus, as held in catena of judgments, to constitute a conspiracy, meeting of minds of two or more persons for doing an illegal act or an act by illegal means is the first and foremost requirement. It is true that, in the present case, there is no direct evidence to prove the conspiracy hatched by the accused No.1 and 2. As held in the above cited judgments of Supreme Court, the direct independent evidence of criminal conspiracy is generally not available and its existence is a matter of inference and inferences are normally deduced from acts of parties in pursuance of purpose in common between the conspirators. Further, the conspiracies are proved by the circumstantial evidence, as the conspiracy is seldom an open affair; and usually both the existence of the conspiracy and its objects have to be inferred from the circumstances and the conduct of the accused. Therefore, in criminal jurisprudence, the layer of inference of criminal conspiracy can be identified on the basis of alleged acts committed by the accused persons and the outcome of said acts. It is because, conspiracy cannot be exhibited in open to public.

184. It is undisputed fact that accused No.1- Sri.V.Nagaraj and accused No.2-Sri.Naginchanda Kincha are known to each other, even prior to the tax matter of PW.1, as it can be inferred from the written statements of accused filed U/Sec.313(5) of Cr.P.C, and also from the evidence on record. As per Ex.P53-Verification of Complaint, there is nexus between accused No.1- Sri.V.Nagaraj and accused No.2-Sri.Naginchand Kincha, Chartered Accountant. Further, as per evidence of PW.1, when he came to Bangalore, he searched for a good Chartered Accountant relating to Income Tax Notice issued in respect of his IT Returns for 2008-09 and he was told that accused No.2 is one of such good chartered accountants at Bangalore; accordingly, he met accused No.2 in his office and informed him regarding receipt of income tax notice. Accused No.2 told him to meet concerned Income Tax Officer directly and to receive Income Tax notice. Further, it is the testimony of PW.1 regarding connection of accused No.1 and 2 that, when PW.1 intimated to accused No.2 regarding demand of bribe of Rs.20 Lakh from accused No.1, then accused No.2 advised PW.1 to pay the said bribe amount of Rs.20 Lakh to accused No.1 and to get the matter closed.

185. Further, the evidence of PW.15-Smt.Suman Lunkar further substantiate the nexus between accused No.1 and 2. As per her testimony in her examination-in- chief at Paragraph No.7, ‘on 07.09.2012, Sri.Naginchand Kincha [i.e. accused No.2] had extracted his tooth, so he had told her that one Mr.Halim [i.e. complainant-PW.1] would come to the office and collect his assessment order’. It is the further evidence of PW.15 that, ‘on 07.09.2012, Mr.Halim had come to the office of M/s.Kincha and company; at that time, Sri.Naginchand Kincha was not in the office, she gave assessment order to Mr.Halim, he checked it but told that he would not be collecting it; therefore, she has kept back the assessment order’.

186. Further, PW.15 has stated in her examination-in-chief at Paragraph No.8 that, ‘on 08.09.2012, she came to the office of M/s.Kincha and Comapny; at that time, Sri.Naginchand Kincha was there, she informed him that Mr.Halim had refused to collect his assessment order on the previous day. Then Sri.Naginchand Kincha told her to call Mr.Halim on the phone, she called Mr.Halim by her phone to come to the office and meet Sri.Naginchand Kincha’. It is her further testimony that ‘she also informed Mr.Halim that Sri.Naginchand Kincha had informed that one Mr.Nagaraj would also be there’. As this witness has not supported the prosecution case in its entirety, therefore learned Public Prosecutor has cross examined her by treating her as hostile. Even in her cross examination by the prosecution, PW.15 has admitted a suggestion to the effect that, ‘the assessment order which she was to hand over to Mr.Halim was from Income Tax Department’. She further stated in her cross that, ‘the assessment order of Mr.Halim was in the cabin of Sri.Naginchand Kincha’. Further, during her cross examination done by the learned counsel for the accused No.2, she re-affirmed that she called Mr.Halim on 08.09.2012; but stated that, she does not remember from which mobile number she had called him.

187. From the above extracted parts of testimony of PW.15, it is very clear that, the Assessment Order-Ex.P16 was very much available with accused No.2 in his office and at the instruction of accused No.1, accused No.2 had directed PW.15 to hand over assessment order after collecting the bribe amount. This piece of evidence from the mouth of PW.15 supports the very evidence of PW.1, in alleging the demand of bribe by the accused and also provides the proof for conspiracy of accused No.1 and 2.

188. Further, there is substantial circumstantial evidence in the form of Call Detail Records marked at Ex.P43, Ex.P45 and Ex.P50 to support the theory that accused No.1 and 2 have hatched a criminal conspiracy in order to obtain a pecuniary advantage from PW.1 relating to his Tax matter. The Ex.P43 is the Call Details of Mobile No.9880504579, belonging to accused No.1. As per Ex.P43, on 27.08.2012, accused No.1 had called from his Mobile having SIM No.9880504579 to the Mobile of accused No.2 having SIM No.9845025385, on three occasions. Similarly, on the same day, at 13:31:30 hours PW.1 called accused No.1 and duration of said call lasts for 12 Seconds. Further, on 29.08.2012, there is call exchange between A-1 and A-2 on two occasions. Further, on 01.09.2012, there is call exchange between A-1 and A-2 on six occasions; and on the same day, there is phone conversation between PW.1 and accused No.1 on three occasions. Further, on 07.09.2012, there is call exchange between A-1 and A-2 on two occasions and on the same day, PW.1 called accused No.1 at 15:26:24 hours; and accused No.1 called PW.1 at 15:50:31 hours for 32 Seconds; again at 18:06:57 hours accused No.1 called PW.1 for 142 Seconds; further at 20:45:46 hours, accused No.1 called PW.1 for 12 Seconds and lastly at 21:03:37 on 07.09.2012, PW.1 called accused No.1 and talked for 497 Seconds. Further, on 08.09.2012, there is call exchange between A-1 and A-2 on six occasions.

189. That Ex.P45 is the Call Details of Mobile No.9845025385 [belonging to accused No.2] from 01.08.2012 to 08.09.2012. As per Ex.P45, on 01.08.2012, there is call exchange between accused No.2 and PW.1 on two occasions; on 07.08.2012, there is call exchange between accused No.2 and PW.1 on two occasions; on 13.08.2012, there is call exchange between PW.1 and accused No.2 on three occasions; on 14.08.2012, there is call exchange between PW.1 and accused No.2 on three occasions; on 22.08.2012, there is call exchange between accused No.2 and PW.1 on two occasions; on 26.08.2012, there is call exchange between accused No.2 and PW.1 on four occasions; on 27.08.2012, there is call exchange between accused No.2 and PW.1 on four occasions and on the same day, there is call exchange between A-1 and A-2 on three occasions; on 28.08.2012, there is call exchange between accused No.2 and PW.1 on two occasions; on 29.08.2012, there is call exchange between A-1 and A-2 on two occasions; on 01.09.2012, there is call exchange between A-1 and A-2 on two occasions and on the same day, there is call exchange between PW.1 and accused No.2 on one occasion; on 04.09.2012, there is call exchange between accused No.2 and PW.1 on two occasions and on the same day, there is call exchange between A-1 and A-2 on one occasion; on 06.09.2012, there is call exchange between PW.1 and accused No.2 on two occasions; on 07.09.2012, there is call exchange between accused No.2 and PW.1 on nine occasions and on the same day, there is call exchange between accused No.1 and 2 on two occasions; and on 08.09.2012, there is call exchange between A-1 and A-2 on nine occasions.

190. Thus, it is very clear from CDR-Ex.P43 and P45, the accused No.1 was constantly touch with PW.1/complainant regarding his tax matter and also there is constant communication between accused No.1 and 2. Thus, in order to prove the criminal conspiracy between accused No.1 and 2, the Call Detail Records marked at Ex.P43 and P45 can be relied upon as circumstantial evidence as Ex.P43 and P45 are supported by the Certificates U/Sec.65-B of Indian Evidence Act and are duly proved by the evidence of PW.7 and PW.8. Thus, the call details are very important to prove the conspiracy between the accused persons and they are proved in accordance with law i.e. as per provision under section 65-B of Indian Evidence Act. Therefore, this court is of the considered opinion that, The proved chain of facts and circumstances, as discussed in the aforesaid Paragraphs, leads to an unavoidable conclusion that the accused No.1 and 2 were acted towards the common object of the conspiracy, in order to obtain pecuniary advantage from PW.1, relating Tax Matter. Thus, it stands proved beyond reasonable doubt that the accused persons hatched a criminal conspiracy and they were acted towards the common object of criminal conspiracy.

191. The learned counsel for the accused No.1 has relied upon three case authorities viz., (i) K.Shantamma Vs. State of Telangana [(2022) 4 SCC 574]; (ii) P.Somaraju Vs. State of Andhra Pradesh [2025 SCC OnLine SC 2291]; and (iii) Prabhugowda Patil Vs. State of Karnataka [Crl.P.No.5163/2023 High Court of Karnataka], in support of defense of accused No.1. I have carefully perused the said judgments. But the said judgments referred by the accused No.1 do not come to the aid of accused No.1, in view of dictum laid down in the case of Neeraj Dutta Vs. State (NCT of Delhi). In the case on hand, the demand and acceptance of illegal gratification and its subsequent recovery stood proved. Since foundational facts of demand and acceptance are proved by the prosecution then there is no bar on this court to take presumption U/Sec.20 of PC Act against accused. So far as third judgment i.e. Prabhugowda Patil Vs. State of Karnataka of High Court of Karnataka, referred by the accused No.1 is concerned, in the said case, no trap was conducted and no tainted money was recovered from the hands of petitioner and even there is no prima facie finding that there has been demand and acceptance. But, in the case on hand, demand and acceptance is proved, trap is conducted and the tainted money is also recovered from the hands of accused No.2. Hence, said judgment is not helpful to the accused No.1.

192. The learned counsel for the accused No.2 has relied upon several case authorities including Ram Singh Vs. Col. Ram singh case, Ziyauddin Burhanuddin Bukhari case and other 3 cases, regarding voice identification and tape recorder/voice recorder. As this court has excluded MO.8-conversation of accused and PW.1 during the Trap from the prosecution evidence; hence, there is no need to consider the principles laid down in the aforesaid cases. Further, the learned counsel also relied upon Anwar Vs. Basheer case, Shafi Mohammed case and Arjun Panditrao case regarding Sec.65-B certificate in respect of MO.1 and MO.2. Since MO.1 and 2 have been excluded from the prosecution evidence, hence there is no need to refer said decisions.

Presumption U/Sec.20 of PC Act:

193. The presumption U/Section 20 of PC Act is a presumption of law. This presumption is an exception to the general rule as to burden proof in criminal cases. This presumption always shifts the onus on accused to rebut the same. Once it is proved that public servant has demanded and accepted or obtained money or undue advantage from any person, it shall be presumed that, unless the contrary is proved, that he had accepted or obtained the money or undue advantage as a motive or reward for performing or to cause performance of public duty improperly of dishonestly by himself or by any public servant.

194. The three Judge Bench of Hon’ble Supreme Court in case of N. Narsinga Rao Vs. State of Andhra Pradesh reported in (2001) 1 SCC 691, held that once it was established that there was a demand or acceptance of illegal gratification and once the foundational facts were proved, the legal presumption for payment or acceptance of illegal gratification for motive or reward for doing or forbearing to do official act is applicable.

195. In the case on hand, the prosecution has established that the demand of illegal gratification by the accused No.1 from PW.1 and also proved the acceptance of said illegal gratification from PW.1 by the accused No.2 on behalf of accused No.1. Therefore, certainly this court can draw a presumption as provided U/Sec.20 of PC Act as against accused persons and in favour of prosecution. Though said presumption is rebuttable presumption; however, in the instant case, the accused have not successfully rebutted the presumption U/Sec.20 of PC Act. The explanation given by the accused No.1 and 2 is not probable and reasonable and the burden of presumption as contemplated U/sec.20 of PC Act, which is shifted on the shoulders of accused, has not been rebutted by them by adducing reliable and convincing evidence.

Consideration of observations of Hon’ble High Court of Karnataka made in Crl.P.No.9312/2026 as per Order dated:05.08.2026, as to contention of accused No.2 with respect to the order passed in W.P.No.19236/2018:

196. It is contended by the learned counsel for the accused No.2 that, it was the prosecuting agency itself that set the disciplinary proceedings in motion. CW.20- Sri.Hitendra, Head of Branch, CBI, Bengaluru, addressed a letter dated:16.08.2013 to the President, Institute of Chartered Accountants of India, New Delhi, forwarding a self-contained note and seeking action against accused No.2. On the basis of letter of CW.20, the disciplinary proceedings were initiated by the Board of Discipline, Institute of Chartered Accountants of India against accused No.2-Sri.Naginchand Kincha and passed finding against the accused No.2 holding him as guilty of ‘Other Misconduct’. Therefore, in this regard, a writ petition was preferred by accused No.2 in W.P.No.19236/2018 before the High Court of Karnataka. The Hon’ble High Court Vide Order Dated:18.12.2025, allowed the writ petition, quashed the finding of Board of Discipline and exonerated the accused No.2 from the finding holding the accused No.2 has committed the ‘other misconduct’ passed by the Board of disciplinary in No.PR/180/ 2013/DD/188/2013/BOD/224/2016 dated:10.02.2018. Further, it is contended that, since Investigating agency itself referred its charge sheet material to disciplinary authority and the Hon’ble High Court, upon examining that very material found it insufficient to sustain even a finding of ‘other misconduct’ on the standard of preponderance of probability.

197. In the additional written statement of accused No.2 submitted U/Sec.313(5) of Cr.P.C., it is stated, at Paragraph No.2 of said statement that, ‘as per self contained note prepared by DIG-Sri.R.Hitendra, CBI/ACB, Bengaluru, it has been categorically stated that the alleged money involved to accused No.2 was towards his professional fees’. By this statement, the accused No.2 has tried to convert the very allegations made against him in the CBI Charge sheet by projecting that, “the allegation against accused No.2 is not accepting the bribe amount of Rs.5 Lakh on behalf of accused No.1 as alleged in the charge sheet; rather, it is alleged and stated by the DIG-Sri.R.Hitendra, CBI/ACB, Bengaluru, that the alleged money involved to accused No.2 was towards his professional fees as stated by himself in his letter dated:16.08.2012 addressed to the President, Institute of Chartered Accountants of India, New Delhi.

198. It is true that, CW.20-Sri.Hitendra, then DIG & HOB, CBI/ACB, Bengaluru had written a letter dated:16.08.2012 to the President, Institute of Chartered Accountants of India, along with Form ‘I” and Self Contained Note, requesting take action against accused No.2. In the self contained note, at the last Paragraph, it is mentioned that, ‘during investigation Sri.Naginchand V. Kincha had stated that he had collected the money from Sri.A.K.Halim towards his professional fees.’ Thus, it is very clear from the last Paragraph of said self contained note that, the collection of money from PW.1-Sri.A.K.Halim towards professional fees is not the personal opinion of CW.20-Sri.Hitendra, rather it the defense taken by the accused No.2 when he was trapped by the CBI Team in his office along with the bribe amount of Rs.5 Lakh. Moreover, in the said self contained note, CW.20-Sri.Hitendra, has clearly stated the facts and made allegations against accused No.2, pertaining to the case on hand i.e. in respect of RC.12(A)/2012. As accused No.2 himself had stated during the investigation that he has taken the money from PW.1 towards his professional fees; therefore, it was compelled to CW.20, the then DIG, CBI to brought to the notice of President, Institute of Chartered Accountants of India, regarding the claim of accused No.2. So far as allegations against accused No.2 pertaining to the case on hand, CW.20 has clearly stated in his self contained note. Therefore, it is not the complaint of CBI nor the allegation made by the CW.20 that, the accused No.2 has received exorbitant professional fees; rather it is defense taken by the accused No.2 when he is caught red handed with bribe amount. hence he should be punished.

200. Moreover, for the sake of argument, even if we assume that, the CBI has taken contradictory view relating to accepting of Rs.5 Lakh by accused No.2 from PW.1-Sri.A.K.Halim, in their complaint of RC.12(A)/2012 as well as in the letter of CW.20, the then DIG of CBI dated:16.08.2012; but the fact is that, the Hon’ble High Court has already quashed the findings of Board of Discipline PR/180/2013/DD/188/2013/BOD/224/2016 dated:10.02.2018 [which enquiry was said to be initiated based on the letter dated:16.08.2012 of DIG, CBI, Bengaluru], vide its order dated:18.12.2025 passed in W.P.No.19236/2018. Thus, the matter pertaining to said letter dated:16.08.2012 and allegation that accused No.2 has received Rs.5 Lakh from PW.1/complainant as exorbitant professional fees, is now set at rest by the Hon’ble High Court; in other words, the very allegation of charging exorbitant professional fees by accused No.2 has been quashed by the High Court. It is, now, clear that, only allegation leveled against accused No.2 by the CBI in their charge sheet remains holds good. It is pertinent to note here that, the Hon’ble High Court in W.P.No.19236/2018 has not examined the correctness of charge sheet material pertaining to the case on hand, it has only quashed the finding of Board of Disciplinary dated:10.02.2018.

201. Therefore, the accused No.2 is not permitted take the benefit of order of Hon’ble High Court passed in W.P.No.19236/2018 by contending that the very proceedings of instant case are not sustainable in view of identical facts and circumstances leveled in the departmental enquiry. Moreover, the facts, circumstances and allegations made against accused No.2 in the charge sheet of CBI of present case are entirely different from the facts and allegations made in the Disciplinary proceedings as said disciplinary proceedings were initiated based on letter dated:16.08.2012 of CW.20- Sri.Hitendra, then DIG & HOB, CBI Bengaluru; in turn, said letter was written by CW.20 based on the very own defense statement of accused No.2 that, he had collected the money from Sri.A.K.Halim towards his professional fees, when he was trapped by the CBI Team with Rs.5 Lakh in his office.

202. So far as offence of criminal misconduct defined under section 13 of the PC Act-1988 is concerned, the Hon’ble Supreme Court has held in the case of State represented by Inspector of Police, Pudukottai, T.N. Vs. A. Parthiban [(2006) 11 SCC 473] that, “every acceptance of illegal gratification, whether preceded by a demand or not, would be covered by Section 7 of the Act. But, if the acceptance of an illegal gratification is in pursuance of a demand by the public servant, then it would also fall under Section 13(1)(d) of the P.C. Act”. In the case on hand, the prosecution has already proved that accused No.2 has received the illegal gratification of Rs.5 Lakh from PW.1 for accused No.1, which accused No.1 has demanded from PW.1; and thereby accused No.1 has obtained said gratification i.e. pecuniary advantage as a motive or reward from PW.1 for the purpose of reducing his taxable amount of Rs.80 Lakh to Rs.30 Lakh by corrupt or illegal means by abusing his official position as Income Tax officer and thereby accused No.1 has committed the offence of criminal misconduct punishable U/Sec.13(2) read with Sec.13(1)(d) of Prevention of Corruption Act-1988.

Conclusion:

203. It is settled law that if the two basic foundational facts i.e. ‘demand’ and ‘acceptance’ of gratification are proved, then presumption U/Sec. 20 of PC Act can be invoked to the effect that the gratification was demanded and accepted as a motive or reward as contemplated U/Sec.7 of the Act. However, such presumption is rebuttable and even on the basis of the preponderance of probability also, the accused can rebut said presumption. In the present case, the prosecution proved its case beyond reasonable doubt, in respect of the ‘demand’ and ‘acceptance’ of the illegal gratification of Rs.5 Lakh from the complainant-PW.1 and recovery of tainted currency notes from the possession of accused No.2, at his office. In such circumstances, the accused No.1 and 2 have to rebut the presumption by disproving the case of the prosecution either in the cross- examination of the prosecution side witnesses or by adducing material evidence that the obtainment of Rs.5 Lakh was not a gratification or bribe amount. But, the accused persons failed to do so and on the contrary, the prosecution has proved the case beyond any reasonable doubt.

204. Thus, after having gone through the evidence on record, both oral and documentary and having taken into consideration of arguments of both side; and on the basis of appreciation and analysis of evidence, I find that accused No.1-Sri.V.Nagaraj, while acting in his official capacity as Income Tax Officer, Ward 4(3), Bengaluru did demand gratification of Rs.20 Lakh from PW.1 for reducing his taxable amount of Rs.80 Lakh to Rs.30 Lakh and obtained bribe/gratification of Rs.5,00,000/- from PW.1 through accused No.2-Sri.Naginchand Kincha, which is subsequently recovered from the possession of accused No.2, at his office. Thus, this court is of the considered opinion that the prosecution has proved beyond reasonable doubt that, accused No.1 and 2 in criminal conspiracy with each other, demanded illegal gratification from PW.1 and obtained Rs.5 Lakh from him and thereby committed the offences punishable U/Sec.120-B of IPC and U/Secs.7, 8 and Sec.13(2) read with Sec.13(1)(d) of PC Act Accordingly, I answered the Points No.2 to 5 in the Affirmative.

205. Point No.6: In the light of above discussion, I proceed to pass following:

ORDER

Acting U/Sec.235(2) of Cr.P.C., the Accused No.1-Sri.V.Nagaraj and Accused No.2-Sri.Naginchand Kincha, are convicted for the offence punishable U/Sec.120-B of IPC.

Further, acting U/Sec.235(2) of Cr.P.C., the Accused No.1 is convicted for the offence punishable U/Sec.7 of Prevention of Corruption Act-1988.

Further, acting U/Sec.235(2) of Cr.P.C., the Accused No.2 is convicted for the offence punishable U/Sec.8 of Prevention of Corruption Act-1988.

ORDER ON SENTENCE

.In the instant case, the Accused No.1 and 2 are convicted for the offence punishable U/Sec.120-B of IPC; and further, the Accused No.1 is convicted for the offences punishable U/Sec.7 and Sec.13(2) read with Sec.13(1)(d) of Prevention of Corruption Act-1988; and further accused No.2 is convicted for the offence punishable U/Sec.8 of Prevention of Corruption Act-1988.

2. Heard the accused persons and their respective learned counsels and also Ld. Senior Public Prosecutor, regarding sentence.

3. The learned counsel for the accused No.1 submitted that accused No.1 has rendered flawless service in the Income Tax Department and he got appreciated for his service and awarded. He is having wife and children to look after. Hence, it is prayed for leniency in imposing sentence against him.

4. The accused No.1 submitted that he served his institution honestly. There is no any black mark in his entire service except this case nor there is any criminal antecedents. He spent 14 years in attending the court for this case. He is going to perform the marriage of his son on next month; hence, prayed for leniency in imposing sentence.

5. The learned counsel for the accused No.2 submitted that the offence for which the accused No.2 is convicted is not of serious nature and not punishable with any capital punishment. That accused No.2 is now aged about 73 years and he is a refuted chartered accountant in Bengaluru. That the proceedings of the present case has been running since September 2012 and he has faced the proceedings without a single fault. Thus, it is prayed to take the lenient view while sentencing them.

6. The accused No.2 submitted that he is now 73 years old and suffering from heart disease and other age- old ailments. There is no any black mark in his entire service as Chartered Accountant except this case nor there is any criminal antecedents. He spent nearly 14 years in attending the case before this court; hence, prayed for leniency in imposing sentence.

7. The Ld. Senior Public Prosecutor has submitted that the prosecution has proved the guilt of the accused persons beyond reasonable doubt. The offences committed by the accused requires stringent approach and no lenient view could be taken in their favour as the offences committed by the accused are having adverse effect on society. The accused No.1 being the public servant has misused his official position, and conspiring with accused No.2, has demanded illegal gratification from PW.1-complainant as reward for reducing his tax liability from Rs.80 Lakh to Rs.30 Lakh and thereby, obtained Rs.5 Lakh as gratification through accused No.2 and thereby the accused No.1 and 2 have committed the alleged offences. Therefore, the sentence to be imposed shall send a message to the society to eradicate the evil of corruption and it shall be proportionate to the offences committed by the accused. Accordingly, it is prayed to impose maximum sentence and fine.

8. In the case of RAJIV Vs. STATE OF RAJASTHAN [AIR 1996 SC 787] it has been held that, it is the nature and gravity of the Crime but not the Criminal, which is germane for consideration to impose appropriate sentence in a Criminal Trial.

9. The Hon’ble Supreme Court in the case of State of Maharashtra THROUGH CBI, ANTI CORRUPTION BRANCH, MUMBAI Vs. BALAKRISHNA DATTATRYA KUMBAR [(2012) 12 SCC 384] has held that ‘corruption violates human rights and undermines human rights and indirectly violates them.’ It is further held that ‘systematic corruption is violation of human rights as it leads to economic crisis.

10. In the case of State of M.P. Vs. Ram Singh, [(2000) 5 SCC 88], the Hon’ble Supreme Court held that, the object of the Prevention of Corruption Act, 1988 was to make effective provisions for prevention of bribe and corruption amongst public servants. It is a social legislation to curb illegal activities of public servants and should be liberally construed so as to advance its object and not liberally in favour of the accused.

11. In the case of Narendra Champaklal Trivedi Vs. State of Gujarat [(2012) 7 SCC 80, the Hon’ble Supreme Court has held that, ‘it should be paramountly borne in mind that corruption at any level does not deserve either sympathy or leniency. In fact, reduction of the sentence of the sentence would be adding a premium. The law does not so countenance and, reightly so, because corruption corrodes the spine of a nation an in the ultimate eventaulity makes the economy sterile’.

12. As per ratio held in the case of State of Madhya Pradesh vs. Mehtaab [(2015) 5 SCC 197], it is the duty of Court to pass just sentence on convict against whom the charge is proved by taking into consideration of mitigating and aggravating factors. The sentence imposed to be fair not only to the accused, but also to the victim and the society.

13. Upon coming into the aggravating factors of the case, the accused No.1 while working as public servant as Income Tax Officer, Ward 4(3), Bengaluru, has demanded the bribe/gratification of Rs.20 Lakh from PW.1 for reducing his taxable amount and obtained Rs.5 Lakh as bribe/gratification through accused No.2. The mitigating factors would be his age, service, no criminal antecedents, his dependents and ailing parents Etc. So far as accused No.2 is concerned, the aggravating factors are that, he being chartered accountant has acted as middleman for accused No.1, conspired with accused No.1 and demanded illegal gratification from PW.1 on behalf of accused No.1 and subsequently accepted bribe amount of Rs.5 Lakh as bribe amount from PW.1 to be payable to accused No.1 in his own office. The mitigating factors would be his age, health condition and his dependents.

14. As held by Hon’ble Supreme Court in State Vs. Parthiban [(2006) AIR SCW 5267], in view of the mandate contained in Section 18 of the Probation of Offenders Act, a convicted accused for the offence under the Prevention of Corruption Act, 1988 is not entitled for the benefit of probation.

15. As per Sec.16 of the PC Act, where a sentence of fine is to be imposed under Sec.7 or Sec.8 or Sec.9 or Sec.10 or Sec.11 or sub-section (2) of Sec.13 or Sec.14 or Sec.15 of PC Act, the Court shall take into consideration the amount or value of the property the accused person has obtained by committing the offence. In the case on hand, the convicts have demanded illegal gratification of Rs.20 Lakh and have obtained Rs.5 Lakh from PW.1- Complainant.

16. The offence U/Sec.7 of PC Act-1988 [prior to amendment of 2014 and 2018] shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to five years and shall also be liable to fine. Further, the offence U/Sec.8 of PC Act-1988 [prior to amendment of 2014 and 2018] shall be punishable with imprisonment for a term which shall not be less than six months but which may extend to five years and shall also be liable to fine. Further, the offence U/Sec.13(1)(d) read with Sec.13(2) of PC Act-1988 [prior to amendment 2018] shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to seven years and shall also be liable to fine.

17. After keeping in mind the ratio laid down in above cited judgments while awarding the sentence, this Court should bear in mind the expectation of the society to prevent the corruption in the public office by providing prompt conviction and stern sentence. Therefore, after considering the mitigating and aggravating factors, facts and circumstances of the case and after having considered the submission of both side, this Court proceeds to pass the following;

ORDER

Acting U/Sec.235(2) of Cr.P.C., the accused No.1 and 2 are sentenced to undergo Simple Imprisonment for a period of 3 Years and shall pay a fine of Rs.1,00,000/- [Rupees One Lakh Only] each, for the offence punishable U/Sec.120-B of IPC; and in default of payment of fine, they shall undergo simple imprisonment for a period of 6 Months.

Acting U/Sec.235(2) of Cr.P.C., the accused No.1-Sri.V.Nagaraj is sentenced to undergo simple imprisonment for a period of 3 Years and shall pay a fine of Rs.1,00,000/- [Rupees One Lakh Only] for the offence punishable U/Sec.7 of Prevention of Corruption Act-1988; and in default of payment of fine, he shall undergo simple imprisonment for a period of 6 Months.

Further, the accused No.2-Sri.Naginchand Kincha is sentenced to undergo simple imprisonment for a period of 3 Years and shall pay a fine of Rs.1,00,000/- [Rupees One Lakh Only] for the offence punishable U/Sec.8 of Prevention of Corruption Act-1988; and in default of payment of fine, he shall undergo simple imprisonment for a period of 6 Months.

Acting U/Sec.235(2) of Cr.P.C., the accused No.1-Sri.V.Nagaraj is sentenced to undergo simple imprisonment for a period of 3 Years and shall pay a fine of Rs.1,00,000/- [Rupees One Lakh Only] for the offence punishable U/Sec.13(2) read with Sec.13(1)(d) of Prevention of Corruption Act-1988; and in default of payment of fine, he shall undergo simple imprisonment for a period of 6 Months.

All the sentences of imprisonment imposed against accused No.1 and 2 shall run concurrently.

The accused No.1 and 2 are entitled for set off as contemplated U/Sec.428 of Cr.P.C. MO.3 to MO.7 are the currency notes of (Rs.1,000/- Denomination of 500 Notes) Rs.5 Lakh in five bundles, are ordered to be returned to PW.1-Sri.A.K.Halim or to his Legal Heirs, after appeal period is over.

MO.13 and MO.14-Two Mobile Hand Sets of accused No.1 and 2, are ordered to be confiscated to the State, after appeal period is over.

MO.1, MO.2, MO.8 to MO.12 and MO.15 to MO.17, being worthless, are ordered to be destroyed after appeal period is over. Office to supply free copies of the judgment to the convicted accused forthwith.