Supreme Court Half Yearly Digest 2025: Prevention of Corruption Act

A preliminary inquiry is not mandatory under the Act for initiating a corruption case against a public servant. The absence of a preliminary inquiry does not justify quashing a case against a public servant solely on that ground. (Para 12 & 16) State of Karnataka v. Sri Channakeshava H.D., 2025 LiveLaw (SC) 412 : 2025 INSC 471

A public servant accused in a corruption case has no inherent right to a hearing prior to the registration of an FIR. (Para 14) State of Karnataka v. Sri Channakeshava H.D., 2025 LiveLaw (SC) 412 : 2025 INSC 471

Conviction of Public Servant – Stay of Conviction – Supreme Court dismissed plea seeking a stay on the conviction of a public servant reaffirming that courts should generally refrain from staying convictions in corruption cases involving public servants. The petitioner, convicted under Sections 7, 12, and 13(1)(d) read with Section 13(2) of the Act, had their sentence suspended by the High Court, but the conviction was not stayed. Finding no compelling reason to interfere with the High Court's decision, the Supreme Court dismissed the plea as lacking merit. Raghunath Bansropan Pandey v. State of Gujarat, 2025 LiveLaw (SC) 690

Section 2(c)(i), 7, 13(1)(d) and 13(2) - Held, stamp vendors are "public servants" under Section 2(c)(i) of the PC Act, as they perform a public duty by vending stamp papers and are remunerated by the government through discounts on stamp paper purchases, as governed by the Indian Stamp Act, 1899 and related rules. The nature of the duty, not the status of the person, determines their classification as a public servant under the PC Act. Stamp vendors perform a public duty in which the State and public have an interest, and their remuneration via discounts qualifies them as public servants under the PC Act. However, in this case, the prosecution failed to prove beyond reasonable doubt the appellant's demand and acceptance of illegal gratification (Rs. 2 excess for a Rs. 10 stamp paper). The prosecution's reliance on trap evidence was insufficient to establish guilt beyond reasonable doubt. Consequently, the appellant's conviction under Sections 7, 13(1)(d), and 13(2) of the PC Act was set aside. The High Court's judgment affirming the Trial Court's conviction was overturned. (Para 68) Aman Bhatia v. State (GNCT of Delhi), 2025 LiveLaw (SC) 520 : 2025 INSC 618 : AIR 2025 SC 3153 : 2025 Cri.L.J. 2801

Section 7 - Bharatiya Nyaya Sanhita, 2023; Section 61(2) - Demand and Acceptance of Bribe - Denial of Anticipatory Bail – The petitioner, an audit inspector, was alleged to have demanded illegal gratification for conducting an audit. Co-accused was apprehended red-handed while accepting the bribe, and there was an audio recording corroborating the demand. Held, the High Court rightly denied anticipatory bail. Anticipatory bail in corruption cases should be granted only in exceptional circumstances, such as false implication or politically motivated allegations. The Court reiterated that mere demand or solicitation of a bribe constitutes an offense under Section 7 of the Act. The Court emphasized the severity of corruption and the need to uphold public justice, stating that liberty should be denied to accused persons to ensure a corruption-free society. (Para 12, 21 & 24) Devinder Kumar Bansal v. State of Punjab, 2025 LiveLaw (SC) 291 : 2025 INSC 320 : (2025) 4 SCC 493

Section 7 - Delhi Special Police Establishment Act, 1946; Section 6 - Consent of State Government - Bifurcation of States - CBI challenged the judgment of the High Court which quashed criminal proceedings in two cases involving allegations of corruption. The respondents were accused of demanding and accepting illegal gratification while serving as public servants in the Central departments. The High Court held that the CBI lacked jurisdiction to register and investigate the FIRs in Telangana for offences committed in Andhra Pradesh, as the State of Andhra Pradesh had not granted specific consent under Section 6 of the DSPE Act. The High Court also ruled that the absence of a notification designating a Special Court under the PC Act vitiated the proceedings. Held, the Supreme Court examined the impact of the Andhra Pradesh Reorganisation Act, 2014, and the continuity of laws post-bifurcation. It held that the general consent granted to the CBI prior to bifurcation continued to apply to both Telangana and Andhra Pradesh unless explicitly repealed or amended. The Court emphasized that the CBI's jurisdiction to investigate offences under the PC Act involving Central Government employees did not require State consent, as the PC Act is a Central legislation. The Supreme Court set aside the High Court's judgment, restoring the criminal cases to the Special Judge for CBI Cases for trial. The Court clarified that the CBI's jurisdiction and the validity of the proceedings were not vitiated by the absence of State consent or notification, as the offences involved Central Government employees and were governed by Central laws. The appeals were allowed, and the quashed proceedings were reinstated, with directions for the trial court to proceed in accordance with the law. Central Bureau of Investigation v. A. Satish Kumar, 2025 LiveLaw (SC) 11 : 2025 INSC 11 : AIR 2025 SC 913

Sections 7, 13(2), 19(3) and (4) - Whether the High Court was justified in quashing the Sanction Order and the consequent proceedings when the trial had already commenced and seven witnesses had been examined. Held, the High Court erred in quashing the Sanction Order and the proceedings without examining whether any failure of justice had occurred due to the alleged incompetency in granting the sanction. As per Section 19 (3) and (4) of the Prevention of Corruption Act, the absence or error in sanction does not invalidate the proceedings unless it resulted in a failure of justice, which was neither pleaded by the respondent nor established by the High Court. The matter of competency of the sanctioning authority is to be determined as an issue of evidence during the trial. The appellate or revisional court should not interfere with an order passed by the Special Judge on the ground of an invalid sanction unless it leads to a failure of justice, as per Section 19(3) of the Prevention of Corruption Act. The appeal was allowed, and the trial proceedings were ordered to continue, reaffirming the principle that technical errors in sanction do not vitiate proceedings unless they cause a failure of justice. State of Punjab v. Hari Kesh, 2025 LiveLaw (SC) 62 : 2025 INSC 50 : AIR 2025 SC 729

Sections 7, 13 and 20 - Demand and Acceptance of Bribe - Necessity of Proof – Held, proof of demand and acceptance of illegal gratification by a public servant is a sine qua non to establish guilt under Sections 7 and 13 of the Prevention of Corruption Act, 1988. Mere allegation of demand and acceptance of illegal gratification does not give rise to a presumption under Section 20 of the Act. A prima facie finding of corruption requires allegations containing definite ingredients for which proof can be offered at trial, giving rise to the presumption under Section 20, which is rebuttable. Misuse of authority alone, without proof of demand or acceptance of bribe, does not constitute an offence under the Prevention of Corruption Act. In this case, where a Minister was accused of corruption for allocating fishing contracts without following tender processes, the Court found no material in the investigation report or statements indicating demand or acceptance of bribe by the Minister, thus warranting discharge. The court clarified that the beneficial distribution of largesse to marginalised communities, even if done outside of the normal tender process, does not automatically equate to corruption. (Para 12, 21 & 22) Dileepbhai Nanubhai Sanghani v. State of Gujarat, 2025 LiveLaw (SC) 273 : 2025 INSC 280

Sections 13(1)(b), 12, and 13(2) - Code of Criminal Procedure, 1973: Section 156(3) - Preliminary inquiry not mandatory before fir registration against public servant – Issues - 1. Whether a preliminary inquiry is mandatory before registering an FIR against a public servant under the PC Act. 2. Whether a source information report can substitute for a preliminary inquiry in corruption cases. Held, a preliminary inquiry is not mandatory before registering an FIR against a public servant under the PC Act when the source information discloses a cognizable offence. The accused has no vested right to demand a preliminary inquiry. While a preliminary inquiry may be desirable in certain cases to ascertain the commission of a cognizable offence, its necessity depends on the facts and circumstances of each case. The scope of such an inquiry is limited to determining whether the information prima facie reveals a cognizable offence, not to verify its truthfulness. A detailed source information report, as in this case, can serve as a substitute for a preliminary inquiry. The High Court's decision to quash the FIR was set aside, and the FIR under Sections 13(1)(b), 12, and 13(2) of the PC Act was restored. (Para 24) State of Karnataka v. T.N. Sudhakar Reddy, 2025 LiveLaw (SC) 241 : 2025 INSC 229

Sections 13(1)(b), 12, and 13(2) - Code of Criminal Procedure, 1973: Section 156(3) - Reliance on Lalita Kumari v. State of U.P. was misplaced, as it does not mandate a preliminary inquiry in corruption cases but allows discretion based on case-specific facts. The source information report, providing a comprehensive breakdown of the respondent's assets and income discrepancies, was sufficient to act as a preliminary inquiry. Preliminary inquiries aim to prevent unnecessary harassment while ensuring genuine allegations are not stifled arbitrarily. The State's appeal was allowed, the High Court's order quashing the FIR was set aside, and the FIR was restored. (Para 19) State of Karnataka v. T.N. Sudhakar Reddy, 2025 LiveLaw (SC) 241 : 2025 INSC 229

Sections 13(1)(e) and 13(2) - Penal Code, 1860; Section 109 - Disproportionate Assets Case - Alleged Abetment by Minister's Wife - Conviction for abetting the accumulation of disproportionate assets challenged. Justice Dhulia upheld the conviction, finding active participation in acquiring properties during her husband's tenure with knowledge of his insufficient lawful income, relying on P. Nallammal v. State, (1999) 6 SCC 559, which establishes abetment by a close relative based on circumstantial evidence. Justice Amanullah set aside the conviction, holding that the prosecution failed to prove mens rea or knowledge of illicit funds, citing K. Ponnuswamy v. State, (2001) 6 SCC 674 and State v. Uttamchand Bohra, (2022) 16 SCC 663, emphasizing that mere property registration in her name does not establish abetment without evidence of conspiracy or intentional aid, and cautioning against reversing the burden of proof or undermining the presumption of innocence. Due to the split verdict, the case was referred to the Chief Justice of India for further directions. (Paras 18, 36, 39) P. Nallammal v. State, 2025 LiveLaw (SC) 545 : 2025 INSC 643

Section 13(1)(b) r/w. 13(2) - Disproportionate Assets - Income Tax Returns - Quashing of FIR - Economic Inflation - Long-Term Asset Valuation - The Appellant argued that his wife's income and other declared sources of income were not properly considered in the calculation of assets. The Appellant submitted income tax returns and other supporting documents to justify the declared assets. Held, the income of the Appellant's wife and other declared sources were not adequately considered by the Vigilance Department. It was observed that while calculating disproportionate assets over a long period (1996-2020), inflation and economic changes should be considered. Referring to State of Haryana v. Bhajan Lal, 1992 SCC (Cri) 426 the Court noted that powers under Article 226 of the Constitution could be exercised when allegations in the FIR do not constitute any offence. The Court found that the alleged disproportionate assets were not substantiated when the Appellant's and his wife's declared income was properly accounted for. The Supreme Court quashed the FIR registered against the Appellant. Consequently, the appeal was allowed. Nirankar Nath Pandey v. State of U.P., 2025 LiveLaw (SC) 90

Section 13(1)(d) r/w. 13(2) - LIC Officer - The appellant, a Development Officer of Life Insurance Corporation of India (LIC), was convicted for offenses under Sections 468, 465, 420 read with Section 120(B) IPC and Section 13(1)(d) read with Section 13(2) of the PC Act. He was found guilty of fraudulently obtaining the settlement of insurance claims by projecting the insured as deceased, despite the insured being alive. The trial court sentenced the appellant to two years of rigorous imprisonment for most offenses under the IPC and three years for offenses under the PC Act. The High Court upheld the conviction and sentence. Whether the appellant could be convicted under Section 13(1)(d) read with Section 13(2) of the PC Act. Held, an officer of LIC is considered a public servant under the PC Act, making them liable for offenses under the Act if corruption is proven. As a Development Officer of LIC, established under the Life Insurance Corporation of India Act, 1956, the appellant was a public servant under Section 2(c)(iii) of the PC Act. Therefore, his conviction under Section 13(1)(d) read with Section 13(2) of the PC Act was justified. The Supreme Court dismissed the appeal, affirming the conviction and sentences imposed by the trial court and upheld by the High Court. Biswajit Das v. Central Bureau of Investigation, 2025 LiveLaw (SC) 89

Section 13(1)(e) - Can a non-public servant be convicted for abetting offences under the Act, specifically for assisting a public servant in acquiring disproportionate assets? Held, a nonpublic servant can be convicted for abetting a public servant's offence under Section 13(1)(e) of the Prevention of Corruption Act, 1988, for possessing assets disproportionate to known sources of income. The Court upheld the conviction of the appellant, the wife of a former public servant, for abetting her husband by holding disproportionate assets in her name. A non-public servant who facilitates, collaborates, or holds illicit assets for a public servant is liable for abetment under Section 109 of the IPC read with Section 13(1)(e) of the Act. Concurrent findings of the trial court and High Court confirmed the appellant's role in accumulating assets disproportionate to her husband's known income. The appeal was dismissed, and the conviction under Section 109 IPC read with Sections 13(1)(e) and 13(2) of the Act was upheld. [Paras 13 - 15] P. Shanthi Pugazhenthi v. State, 2025 LiveLaw (SC) 558 : AIR 2025 SC 3007 : 2025 INSC 674

Sections 13(2) r/w 13(1)(e) - Code of Criminal Procedure, 1973; Section 482 - Quashing of Criminal Proceedings - Validity of Sanction – Held, the High Court acted improperly by conducting a mini-trial at the pre-trial stage and quashing the case before the actual case material were brought on record. The issue of conviction prospects and invalid sanction are matters to be determined during the trial. (Para 12 & 14) State v. G. Easwaran, 2025 LiveLaw (SC) 356 : 2025 INSC 397 : AIR 2025 SC 1848

Section 17A and 19 - Code of Criminal Procedure, 1973; Section 156(3) - Whether prior sanction under Section 17A of the 1988 Act is required when a Magistrate orders an investigation under Section 156(3) CrPC? In a case involving former Karnataka Chief Minister, the Supreme Court refrained from deciding the above question, as the issue is already under consideration in a pending reference (Manju Surana v. Sunil Arora). The Court directed the matter to be placed before the Chief Justice of India for tagging with the reference, citing judicial discipline. (Para 20) B.S. Yeddiyurappa v. A Alam Pasha, 2025 LiveLaw (SC) 450 : 2025 INSC 515

Section 20 - Demand and Acceptance of Bribe - Trap Case - Inconsistencies in Complainant's Testimony - Hostile Independent Witnesses - Reasonable Doubt – Acquittal - Where a trap was laid based on a complaint alleging demand and acceptance of bribe by public servants for processing a license application, and the complainant's testimony regarding the amount demanded was inconsistent and contradictory to the written complaint, and the independent witnesses turned hostile and contradicted the prosecution's version of the trap proceedings, and the evidence raised reasonable doubt as to the actual acceptance of the bribe, the conviction and sentence imposed by the Trial Court and affirmed by the High Court were set aside. The prosecution failed to establish the demand and acceptance of bribe beyond reasonable doubt, precluding the presumption under Section 20 of the Act. (Para 16) Madan Lal v. State of Rajasthan, 2025 LiveLaw (SC) 310 : 2025 INSC 340 : AIR 2025 SC 1635 : (2025) 4 SCC 624

Section 20 – Mere recovery of tainted money insufficient for conviction without proof of bribe demand – Recovery of tainted money alone does not trigger the presumption of guilt under Section 20 unless the complete chain of events—demand, acceptance, and recovery—is established. Acquitting a public servant accused of demanding a ₹1,500 bribe, the Court found no proof of demand, despite evidence of acceptance and recovery. The prosecution must establish the entire chain to sustain a conviction; failure to prove demand negates the burden on the accused to disprove guilt. High Court's acquittal upheld, appeal dismissed. (Para 25 - 28) State of Lokayuktha Police, Davanagere v. C.B. Nagaraj, 2025 LiveLaw (SC) 620 : 2025 INSC 736