Mahadev Dhanappa Gunaki And Anr. vs The State Of Bombay

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 4 February, 1953

Coram: S.R. Das

Mahadev Dhanappa Gunaki and another petitioner appealed against the State of Bombay. The appeal was heard on 4 February 1953 before the Supreme Court of India. The judgment was written by Justice S. R. Das, and the bench was headed by Justice Ghulam Hasan. The Court noted that the two appellants had been charged before the Additional Magistrate, First Class, at Belgaum, for allegedly offering an illegal gratification of fifteen thousand rupees to Sri P. P. Naik, who was a Police Inspector in the Anti-Corruption Branch at Belgaum. The alleged offer was made on or about 23 March 1949 at the Police Club in Belgaum, and it was intended to secure the dropping of an income-tax inquiry against the appellants and to obtain the return of account books that had been attached by the Anti-Corruption Police. The Court recorded that the offence was alleged to have been committed in furtherance of a common intention shared by the appellants and a third person, Madivalappa Veerappa Pattan, who had died during the investigation. The alleged conduct was said to constitute an offence punishable under Section 116 read with Sections 161 and 34 of the Indian Penal Code.

The prosecution case was set out in detail. It was alleged that the appellants, together with Madivalappa Veerappa Pattan, carried on a partnership business dealing in silk, yarn, sarees and other articles in Rabkavi, a town in the district of Belgaum. The prosecution asserted that the firm was evading a substantial amount of income tax. Consequently, Sri Gudi, the Deputy Superintendent of Police of the Anti-Corruption Branch, accompanied by Sri Naik, Inspector of Police, travelled from Belgaum to Rabkavi on 24 – 25 January 1949 and conducted a search of the appellants’ residence and business premises. During the search, the officers seized the appellants’ account books. At that time, the appellant Durdi is said to have offered to pay between fifteen thousand and twenty thousand rupees to Sri Naik in order to suppress the matter, and a similar offer was made to Sri Gudi. Both officers described the offers as improper and refused to accept them. After returning to Belgaum on 26 January 1949, the officers reported the bribery attempts to their superiors, Superintendent of Police Sri Malpathak and the head of the Anti-Corruption Branch, Sri Wagh. They also consulted Shri Jadhav, the District Magistrate of Belgaum, who advised them to arrange a trap to catch the appellants. On 21 February 1949, Shri Gudi issued an order (Exhibit 1A) directing Sri Naik to examine the attached books of account and to submit a report. In the first week of March 1949, at Hubli, about one hundred miles from Rabkavi, the appellants contacted Sri Keshavain, a person known to them and a friend of Sri Naik, and through him renewed an offer of up to thirty thousand rupees to Sri Naik for securing the dismissal of the inquiry and the return of the books. Sri Keshavain later informed the appellants that Sri Naik had rebuffed the offer as improper. On 12 March 1949, Sri Naik submitted his report (Exhibit 10A), stating that a cursory examination of the books revealed concealment of huge profits and evasion of income tax, and concluding that a detailed examination by an expert could reveal profits amounting to several lakhs. The report recommended that the Anti-Corruption Investigation Group in Poona be asked to forward the books to the Commissioner of Income Tax for further action. In the second week of March 1949, the appellants again asked Sri Keshavain to renew the offer. During this time, Sri Naik informed Sri Gudi of the renewed offer, and Sri Gudi advised Sri Naik to accept the money in order to entrap the appellants. Accordingly, when Sri Keshavain again made the offer, Sri Naik told him that if the appellants came with the appropriate sum, the matter could be resolved under the trap arrangement.

In its examination, the officer observed that black-marketing activities had been concealed and that income tax on the profits derived from such activities had been evaded. The officer concluded his report with the following paragraph: “(9) I have not examined the other account-books attached. This examination of mine was very cursory. If a detailed and careful examination is made along with secret papers, balance sheets and other important documents by an expert, the profits made by Mr. Durdi for the remaining seven years might amount to several lacs. So I submit that the A.A.I.G.P., A.O., Poona, may please be moved in the matter to send the books to the Commissioner of Income-tax for further disposal.” In the second week of March 1949 the appellants again asked Sri Keshavain to make another attempt and to renew the offer to Sri Naik. During this period Sri Naik disclosed the renewed offer to Sri Gudi, and Sri Gudi advised Sri Naik to consent to receiving the money in order to set a trap for the appellants. Consequently, when Sri Keshavain conveyed the renewed proposal, Sri Naik instructed him to tell the appellants that if they came to Belgaum with the money, he would take care of the remaining arrangements. Sri Keshavain passed this reply to the appellants. On 22-3-1949 the appellants, together with the deceased Pattan, met Sri Keshavain at Hubli and expressed their desire to hand over the money directly to Sri Naik, requesting that Sri Keshavain accompany them to Belgaum; Sri Keshavain consented. Accordingly, on 23-3-1949 the appellants, Pattan and Sri Keshavain travelled to Belgaum. Sri Keshavain then scheduled a meeting with Sri Naik to take place between 7.00 p.m. and 7.30 p.m. near the Mitra Samaj. Sri Naik kept Sri Gudi apprised of these developments. At the appointed time Sri Naik arrived near the Mitra Samaj and met the appellants and Sri Keshavain. The appellants asked Sri Naik to accept the money, but he replied that such matters should not be discussed on a public road and invited them to see him later in his room at the Police Club at a time between 10.00 p.m. and 10.30 p.m. Sri Naik communicated the appointment to Sri Gudi, who then requested Sri Naik to prepare a written report, which he submitted as Exhibit 1-B. Subsequently, Sri Naik and Sri Gudi proceeded to the District Magistrate, Sri Jadhav. Because the magistrate could not be present in person when the trap was to be executed, he issued a district order (Exhibit 3A) addressed to Sri Kamat, the Additional Magistrate, directing him to act as witness to the trapping operation. Sri Jadhav also authorised Sri Gudi to investigate the offence by endorsing Sri Naik’s report (Exhibit 1-B). After completing these formalities, Sri Gudi and Sri Naik returned to the Police Club where Sub-Inspector Sri Arur and the Panchas were waiting. Sri Gudi also escorted Sri Kamat to the Police Club. In the presence of the Panchas and Sri Kamat, Sri Gudi prepared a Panchnama (Exhibit 2A) documenting the search of the room and the examination of Sri Naik.

After the Panchas and Sri Kamat had recorded their observations, the party withdrew from the room and concealed themselves, leaving Sri Naik alone inside awaiting the arrival of the appellants. At approximately ten-thirty in the evening, the appellants together with Pattan entered Sri Naik’s chamber. Sri Naik received them courteously, offered them seats, and then asked what assistance he could render. The appellant Gunaki replied that they desired protection from the pending income-tax inquiry and that their books of account should be returned. The appellant Durdi made a request of the same nature. Following a signal from Gunaki, Durdi handed to Sri Naik a bundle wrapped in cloth; Sri Naik unwrapped it and discovered that it contained several bundles of currency notes. He placed the notes on the cot on which he was seated. Afterwards, Gunaki asked for the return of the unstamped sarees that had been seized and inquired when the books would be handed back. Sri Naik explained that the sanction of the Magistrate was required before any books could be released. Gunaki then stated that the balance of the amount would be paid on receipt of the books. At that moment, Sri Naik signalled to Sri Gudi through the window; Sri Gudi, accompanied by his party and including Sri Kamat, entered the room promptly. Sri Naik handed over the bundles of notes to them, and the procedural formalities for drawing up a Panchnama were then completed.

Subsequent investigation revealed that Madivalappa Veerappa Pattan, the partner of the appellants, died during the process, and the two appellants were thereafter committed to trial on the charge of offering an illegal gratification. The prosecution called as witnesses, among others, Sri Naik, Sri Kamat, Sri Jadhav, Sri Keshavan, Sri Gudi, Sri Arur and the Panch. The appellants entered a plea of not guilty and denied any offer of a bribe, contending that they had paid Rs 15,000 to Sri Naik as composition money to settle the State’s claim for income-tax, and they produced five defence witnesses. The trial Magistrate found the defence testimony unconvincing, accepted the prosecution evidence as substantially correct, and concluded that the sum of Rs 15,000 had been offered as an illegal gratification intended to suppress the income-tax inquiry and to secure the return of the books. Consequently, each appellant was convicted and sentenced to rigorous imprisonment for one year, a fine of Rs 1,000, and, in default of fine payment, an additional period of rigorous imprisonment for two months. The amount of Rs 15,000 was confiscated by the Government. The appellants appealed this judgment, but the Additional Sessions Judge, agreeing with the trial Magistrate, held that the payment was indeed an illegal gratification and not a composition for tax, thereby upholding the conviction and sentences and dismissing the appeal. The appellants subsequently moved the High Court for revision, which likewise dismissed their application.

The High Court also dismissed the revision application. The appellants then sought and were granted leave by that Court to bring an appeal before this Court, the leave being awarded on a certificate issued under Article 134(1). The provision reads: “Leave applied for granted inasmuch as the case is principally decided upon the view that, when the offerer of a bribe is prosecuted, the question to be considered is whether he gave the bribe with a view to corrupt the Government servant. So far as he is concerned, mens rea, the gist of the offence, consists in the attitude of mind that the officer should favour and not in any possibility of the officer showing favour.” Dr. B. R. Ambedkar, appearing in support of the appeal, invoked observations from H.T. Huntley v. Emperor, arguing that the prosecution had not eliminated every reasonable possibility of the appellants’ innocence. He noted that in that earlier case the accused had been convicted by a Special Tribunal, that decision was not subject to appeal, and that only a revision petition to the High Court had been filed. The High Court had dismissed that revision but had issued a certificate under Section 205(1) of the Government of India Act, 1935. Consequently, there was no situation of two courts concurrently making factual findings, as occurred in the present matter. Ambedkar further observed that the facts cited by counsel pertained only to the appraisal of evidence rather than to any definitive factual dispute. He summarized the contention that a specific allegation existed that the appellants had offered a bribe to two police officers on 24-25 January 1949; that the officers had reported the matter to their superiors, who then advised a trap, yet no action was taken for two months, leading some to infer that no bribe had actually been offered and that the allegation was false. The Court found this argument unconvincing, explaining that the police were obliged to wait for the appellants to take a further step and that it was unreasonable to expect the police to proactively solicit bribes merely to ensnare the appellants. The next contention concerned Sri Naik’s report dated 12 March 1949, which alleged large-scale tax evasion. It was argued that the additional tax demanded was a trivial amount—Rs 71-8-0 for the year 1945-46 and Rs 63-11-0 for the year 1946-47—therefore the appellants could not have been willing to pay a bribe of Rs 30,000 or even Rs 15,000. While the fact that Rs 15,000 had been offered was not denied, the argument advanced that it was highly improbable that the appellants would have made such an offer under the circumstances.

In this case the Court considered the allegation that the appellants had offered a bribe of Rs 15,000 despite being aware that the income-tax liability against them was only a very small amount. The same reasoning was applied to the suggestion that the appellants, knowing the tax payable was minimal, could have proposed the same sum of Rs 15,000 as a composition for the tax debt. The Court then examined the claim that the testimony of the prosecution witnesses concerning the statements made at the time the money was handed over was inconsistent. Attention was drawn to the various statements of the witnesses identified as Sri Naik, Sri Areer, Sri Keshavain, the Panch and Sri Kamat, but after careful comparison the Court found no material discrepancy among their accounts. The final argument presented was that the appellants had filed applications to higher authorities seeking the return of their books, which indicated that they understood the District Magistrate was the proper authority to authorize the release of those books. Consequently, the Court held that there was no logical basis for the appellants to offer a bribe to Sri Gudi or Sri Naik, neither of whom possessed the power to return the books without the Magistrate’s sanction. It was evident that before the District Magistrate could issue any order on the appellants’ application, he would consult the officers who had initially caused the attachment of the books – a step that indeed occurred in the present matter. The appellants might therefore have presumed that a favourable report from either Sri Gudi or Sri Naik would aid them in securing an order for the return of the books. The Court noted that both the trial Magistrate and the Additional Sessions Judge, in their appellate findings, had concluded against the appellants. Accordingly, the Court found that the multiple points raised by counsel did not provide sufficient justification to depart from the usual practice of accepting those concurrent factual findings. The Court then addressed the submission of Dr Ambedkar, who contended that no offence had been committed. He emphasized that it was Sri Gudi, not Sri Naik, who had been authorized to seize the books. Sri Gudi had instructed Sri Naik to examine the books and to prepare a report, which Sri Naik completed on 12-3-1949 (Exhibit 10-A). After that date Sri Naik was considered functus officio, having fully performed his duties, and therefore could not be regarded as a public servant who, in the exercise of official functions, could render any favour or service to the appellants. Counsel relied on the authorities Shamsul Huq v. Emperor, A.I.R. 1921 Cal 344 (B); In re P. Venkiah, A.I.R. 1924 Mad. 851 (c); and Venkatarama Naidu v. Emperor, A.I.R. 1929 Mad. 756 (D). A review of those cases indicated that the legal question had not been fully explored and that the reasons supporting the conclusions were not clearly articulated.

In this case the Court observed that the legal conclusions drawn in the decisions cited by Dr. Ambedkar were not clear or convincing. By contrast, the High Courts of Allahabad, Lahore, Nagpur, Bombay and Orissa had expressly disapproved those same decisions. The Court referred to the authorities Ajudhia Prasad v. Emperor, Emperor v. Phul Singh (A.I.R. 1947 LAH 276), Bam Sewak v. Emperor, Gopeshwar Mandal v. Emperor (A.I.R. 1948 Nag 82), In re Varadadesikachariar, Indur Dayaldas Advani v. State and State v. Sadhuacharan Panigrahi, noting that the point of law had been more fully examined in those judgments. The Court found the reasoning in those High Court decisions to be more persuasive than the reasoning advanced in the cases relied upon by Dr. Ambedkar. Nevertheless, the Court stated that it was not necessary to pronounce a final opinion on the abstract question of law, because, on the facts before it, Sri Gudi and Sri Naik possessed the authority, in the performance of their official duties, to favour or to render a service to the appellants. The Court recalled that Sri Naik’s report was merely a tentative document based on a cursory examination of the accounts, and that the books of account remained in their possession and the investigation was still ongoing. The record showed that the District Magistrate, on 20-3-1949, referred the appellants’ request for the return of the books to Sri Gudi for a report. Sri Gudi replied on 25-3-1949, stating that the investigation continued, that the books were heavy, and that he would notify the District Magistrate when the books were no longer required. The last alleged bribe was offered to Sri Naik on 23-3-1949. On that date there was nothing to prevent Sri Naik from preparing a further report after a more detailed examination, concluding that no tax evasion existed, nor was there any obstacle to Sri Gudi informing the District Magistrate that the books could be returned. Considering these facts, the Court concluded that the three decisions cited by Dr. Ambedkar could not be applied to the present case, even if those decisions were sound in principle, and therefore rejected Dr. Ambedkar’s contention. Finally, Dr. Ambedkar requested a reduction of the sentence, particularly with respect to appellant 2. After careful consideration, the Court found no extenuating circumstances that would justify altering the sentence. Consequently, the Court dismissed the appeal.