Supreme Court Restored Trial Court Acquittal, Sets Aside High Court Conviction in Botched Trap in Corruption Case

A bench of Justice Pankaj Mithal and Justice Ahsanuddin Amanullah heard Criminal Appeal No.391 of 2017 challenging the High Court of Judicature at Hyderabad’s 2015 judgment which had reversed a trial court acquittal and convicted a former Assistant Administrative Officer of United India Insurance under the Prevention of Corruption Act for alleged demand and acceptance of a bribe and for conspiracy.

The Court allowed the appeal, set aside the Impugned Judgment of the High Court and restored the Trial Court’s acquittal. The bench found that the prosecution had not proved beyond reasonable doubt the demand and acceptance of illegal gratification and that multiple, cumulatively fatal contradictions and procedural lapses rendered the High Court’s interference unsafe. The Court noted that “in either scenario, benefit of doubt has to flow to the appellant” and described the prosecution case as, “at best a case of a botched-up trap with serious lapses committed by the investigative agency.” The Court, in its reasoning, observed: “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 ... 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 ... or by circumstantial evidence ... 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.”

Background: The dispute arose from a Janata Personal Accident policy claim of Rs.8,00,000 lodged after the insured’s death. The insured’s nominee submitted a claim in June 1999 at the Guntur branch where the appellant was posted. The complainant (PW1) alleged that the appellant demanded Rs.40,000 to liaise with the Regional Manager (accused no.2) for settlement; when the complainant reported the demand, CBI staged a demand-and-trap operation in October 1999. According to prosecution evidence, accused no.3 (appellant’s brother) and accused no.2 were present in Secunderabad, tainted currency and a whisky bottle were handed over, and phenolphthalein tests and mediators’ reports documented the seizure. A chargesheet under Section 120B IPC and Sections 7, 11, 12, 13(2) read with 13(1)(d) of the Prevention of Corruption Act followed.

The Trial Court acquitted the accused after appreciating oral and documentary evidence. The High Court allowed the State’s appeal, reversed the acquittal and convicted the appellant and accused no.3, imposing one year’s rigorous imprisonment and fines. The State invoked appellate jurisdiction to challenge the acquittal. The Supreme Court scrutinised the evidentiary standard in corruption prosecutions — relying on Neeraj Dutta — and reiterated that a court may draw inferences only on a foundation of proved facts. The bench recorded reliance on precedents including Neeraj Dutta and Jafarudheen and emphasised that where two views were possible the benefit must accrue to the accused.

In overturning the High Court, the Court highlighted three glaring defects: (1) the unexplained and unrecorded involvement of the Superintendent of Police in the trap, contradicted by the SP’s tour diary, which raised doubts about the veracity of trap proceedings; (2) a material discrepancy as to the shirt seized — witnesses described a white shirt but the material produced was moss/green‑coloured — which the Court found the High Court had accepted without adequate scrutiny; and (3) inconsistency regarding phenolphthalein evidence, since the pre‑trap mediators’ report contained no application of phenolphthalein to the whisky box yet the post‑trap report recorded its recovery. The bench further noted the protective import of the “double presumption of innocence” in cases of acquittal: “the presumption in favour of the accused does not get weakened but only strengthened.” Finding the prosecution’s case insufficiently robust and the High Court’s reliance on inferences unsustainable, the Supreme Court restored the Trial Court order of acquittal and directed refund of any fine deposited.

Case Details: Case No.: Criminal Appeal No.391 of 2017 (2025 INSC 868) Case Title: M Sambasiva Rao v The State of Andhra Pradesh Appearances: For the Petitioner(s): Mr. Jayant Bhushan, Senior Counsel For the Respondent(s): Mr. Vikramjit Banerjee, Additional Solicitor General