The State Of Madras vs A. Vaidyanatha Iyer

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

Court: Supreme Court of India

Case Number: Criminal Appeal No. 5 of 1957

Decision Date: 26 September 1957

Coram: J.L. Kapur, Bhuvneshwar P. Sinha, P. Govinda Menon

In this case the Supreme Court of India heard an appeal titled The State of Madras versus A. Vaidyanatha Iyer that was decided on 26 September 1957. The judgment was authored by Justice J. L. Kapur, who sat together with Justices Bhuvneshwar P. Sinha and P. Govinda Menon.

The petitioner was the State of Madras and the respondent was A. Vaidyanatha Iyer. The citation of the decision appears in the 1958 All India Reporter at page 61 and in the 1958 Supreme Court Reports at page 580. The appeal was filed by special leave under Article 136 of the Constitution of India against an order of acquittal that had been passed by the Madras High Court. The statutory provisions involved included Section 4 of the Prevention of Corruption Act, 1947 (the second Act of 1947) and Section 16(i) of the Indian Penal Code.

The headnote records that the respondent, who was an Income‑Tax Officer, invited an assessee to his residence and received from him a sum of eight hundred rupees. Shortly after the receipt a search was conducted and the respondent, after initially evading the authorities, produced the money. The respondent claimed that the money had been taken as a loan and not as an illegal gratification. The Special Judge who tried the case found the respondent guilty under Section 16(i) of the Indian Penal Code and sentenced him to six months of simple imprisonment. On review the High Court set aside the conviction and acquitted the respondent. The State of Madras subsequently obtained special leave to appeal that acquittal.

The Supreme Court held that the language of Article 136 of the Constitution indicates that, in criminal matters, no distinction may be drawn between a judgment of conviction and a judgment of acquittal for the purpose of exercising the Court’s power of review. The Court further observed that it would not normally interfere with the factual findings of a High Court, but interference becomes appropriate when the High Court acts perversely or otherwise improperly. The Court criticized the High Court’s findings as halting and its approach as erroneous because it disregarded the special rule of burden of proof contained in Section 4 of the Prevention of Corruption Act. The Court noted that the High Court’s judgment omitted or failed to appreciate certain material pieces of evidence.

According to the Supreme Court, when it is proved that a gratification has been accepted, the presumption created by Section 4 of the Prevention of Corruption Act arises automatically. This presumption is a legal presumption and it is mandatory for the Court to apply it in every case that is brought under that provision. The Court concluded that, on the basis of the evidence and surrounding circumstances in the present case, the transaction could not be characterized as a loan but must be regarded as an illegal gratuity.

The judgment was delivered in the criminal appellate jurisdiction under Criminal Appeal No. 5 of 1957. The appeal arose by special leave from the judgment and order dated 6 September 1955 of the Madras High Court in Criminal Appeal No. 498 of 1954 and Criminal Revision Case No. 257 of 1955. Those orders, in turn, were based on the judgment and order dated 12 July 1954 of the Special Judge, Coimbatore, in Criminal Case No. 1 of 1952. Counsel for the State of Madras consisted of senior advocates who appeared on behalf of the appellant. Counsel for the respondent was also instructed, with the respondent’s representation being undertaken by learned counsel.

On 26 September 1957, Justice Kapur delivered the judgment of the Court in an appeal filed by the State of Madras. The appeal challenged the order of the Madras High Court which had set aside the decision of the Special Judge of Coimbatore and consequently had acquitted the respondent, Vaidyanatha Aiyer, who had earlier been convicted under section 161 of the Indian Penal Code and sentenced to six months of simple imprisonment. Throughout the relevant period the respondent held the position of Income‑Tax Officer at Coimbatore, a fact that was not disputed and which placed him in the office at the beginning of June 1951. The prosecution alleged that at the end of September 1951 the respondent demanded a bribe of one thousand rupees from K S Narayana Iyer, hereinafter referred to as the complainant, who owned a coffee‑hotel known as Nehru Café in Coimbatore and also operated a similar establishment at Bhavanisagar. The complainant had been subject to income‑tax assessment continuously since 1942, and during the assessment for the year 1950‑51 it was discovered that he had failed to pay the required advance income‑tax. Consequently, a notice dated 24 March 1951 was issued to him under section 28 read with section 18‑A(2) of the Income‑Tax Act, requiring him to show cause why a penalty should not be imposed for under‑estimating his income. For the assessment year 1951‑52 the complainant filed his return in the normal course on 11 August 1951; a further notice prompted him to produce his accounts before the Income‑Tax Officer on 27 September 1951. He appeared again before the officer on 28 September, at which time the respondent informed him that the penalty papers had not been disposed of and that the accounts for the current year had also not been examined, and he invited the complainant to meet him at his residence the following morning. The complainant complied and, during that meeting, the respondent told him that if he wished his return to be accepted and sought assistance in the pending penalty proceedings, he must pay the respondent a sum of one thousand rupees as illegal gratification. The complainant subsequently reported the demand to his manager and also noted that the Income‑Tax Officer had indicated his accounts were unsatisfactory. Acting on the respondent’s request, the complainant visited the respondent’s house again on either 6 or 7 October 1951; the respondent inquired whether the money had been brought and, after further discussion of the assessment, asked the complainant to pay only half of the demanded amount because it was the time of Deepavali. Defence evidence also placed a witness who testified that toward the end of October 1951 the complainant was observed leaving the respondent’s house, although the prosecution and the defence differed on the purpose of that visit. Finally, Circle Inspector Munisami P. W. 12, who was on duty in Madras, claimed that he had received complaints alleging that the respondent was corrupt and was indulging in corrupt practices.

After arriving in Coimbatore, the officer made contact with the complainant and inquired whether any bribe had been paid to the respondent. The complainant informed the Inspector that the respondent had demanded a bribe. Acting on the Inspector’s direction, the complainant appeared before the Tehsildar‑Magistrate, who recorded his statement as document P‑17; that statement set out the full narrative of the respondent’s demand for a bribe. Subsequently, the Inspector handed ten one‑hundred‑rupee notes to the complainant, noting the serial numbers in Exhibit P‑17. The complainant then proceeded to the respondent’s office, but the money was not accepted because the respondent had earlier received an anonymous letter, reproduced as Exhibit P‑18, warning him of a trap allegedly laid by persons from Malayalam. The respondent became irritated with the complainant and sent him away. That same evening, the complainant was instructed to appear at the respondent’s residence on the following morning, a visit he made at eight o’clock. At the house, the respondent advised him to disregard the anonymous letter, describing it as the work of enemies, and asked for payment. The complainant handed over a sum of Rs 200, which he later entered in his kacha account book; the High Court subsequently rejected that entry without providing a detailed reason. On the evening of 15 November, the complainant returned to the respondent’s house, where the respondent told him that final orders would be passed and that the money should be paid. The records identified as P‑7 and P‑7(a) indicate that an order had been dictated on 13 November, although there was no evidence that the complainant was aware of that order.

Following that, the Inspector gave the complainant eight one‑hundred‑rupee notes, which the complainant delivered to the respondent on the morning of 17 November at the respondent’s residence. On that occasion the complainant was accompanied by his manager, identified as P. W. 14, and they traveled toward the respondent’s house together with the Magistrate, the Circle Inspector, and an individual named Venkates, described as “lyer” P. W. 14, in a car that stopped three or four blocks from the respondent’s house. Only the complainant and his manager entered the house and handed over the money. Two or three minutes later, the Inspector (P. W. 12), the Magistrate (P. W. 13), and a person named Sesha Ayyar, who had joined the party en route, entered the house after receiving a signal from the complainant. They identified themselves to the respondent and informed him that they possessed information that he had received Rs 800 from the complainant as illegal gratification, and they asked him to produce the money he had allegedly taken. The respondent remained silent, rose from his chair, attempted to leave the house, and was prevented from doing so by the Inspector.

When the Inspector restrained the respondent, the respondent produced the money that had been concealed in the folds of his dhoti. While the mahazar was being prepared, the respondent asserted that the money had been received as a loan from the complainant, but the complainant denied any loan and maintained that the sum had been paid as a bribe. A telegram was subsequently dispatched to the Superintendent of the Special Police Establishment, and on his instructions a case was registered. The investigation was then undertaken by a Deputy Superintendent of Police, who searched the respondent’s house on 19 November. No pronote was found or taken into possession on that date. Later, on 17 July 1952, the respondent produced a pronote bearing four‑anna stamps in court during his statement under section 342 of the Criminal Procedure Code, although he did not disclose this document to Magistrate P.W. 13. The charge framed against the respondent alleged that he had obtained from the complainant the sum of Rs 800 as gratification, which was not legal remuneration, in return for favouring the complainant in the performance of official duties. The offence was said to be punishable under section 161 of the Indian Penal Code read with section 4 of the Prevention of Corruption Act (Act II of 1947). The respondent explained that he had mentioned his financial difficulties to the complainant when they accidentally met on the road toward the end of August or the beginning of September 1951. The complainant then offered to lend him Rs 1,000, and the respondent was unaware that the complainant’s income‑tax assessment was pending before him. When they met again on 15 November, the complainant told the respondent that an anonymous letter was the work of his enemies, promised to advance the loan as previously promised, and suggested that the respondent execute a pronote for Rs 1,000 to be attested by Venkatesa Ayyar, to which the respondent agreed. On the morning of 17 November the complainant paid Rs 800 and promised to pay the remaining Rs 200 in the evening. Although the respondent had the pronote ready and offered to hand it over in the morning, the complainant said he would take it when he left the house. The learned Special Judge accepted the prosecution’s version, carefully analyzed the evidence, found the respondent guilty of the offence charged, and imposed a sentence of six months’ simple imprisonment.

On appeal, the High Court Single Judge set aside the Special Judge’s judgment and acquitted the respondent. The appellate judge summarized his findings in his own words, stating first that it was true that at the time the money was accepted by the accused, proceedings concerning the assessment of income tax on P.W. 8 were pending before the accused, and consequently, if an income‑tax officer received money from a taxpayer under such circumstances, suspicion that the money constituted an illegal gratification was readily aroused. Second, the judge observed that when the version of P.W. 8 was weighed against that of the accused, the probability seemed to tilt in favour of the accused’s version, and that the evidence did not suffice to show that the explanation offered by the accused could not reasonably be true, thereby warranting the benefit of doubt in his favour. Third, the judge noted that this was not an ordinary lending transaction but involved an income‑tax officer whose favour was needed by the lender. Fourth, the evidence showed that in November 1951 the accused required a sum of Rs 1,000 and had asked P.W. 8 for a loan for that purpose. Fifth, the appellate judge concluded that, in his view, the evidence did not inevitably establish a case against the accused.

In the situation described, when the accused receives money from a taxpayer, it is natural that suspicion arises that the payment was made as an illegal gratification. The Court observed that, upon reviewing the learned trial judge’s decision, it appeared that the judge had been wholly influenced by that suspicion. The Court further noted that when the statements of the witness identified as PW‑8 are compared with those of the accused, the balance of probability seems to favour the accused’s version. Moreover, the evidence does not conclusively demonstrate that the explanation offered by the accused cannot be true; consequently, the benefit of doubt must be given to him. The Court added that this case did not involve an ordinary borrower; rather, the borrower was an Income‑Tax Officer whose favour was sought by the lender. Evidence indicated that in November 1951 the accused needed a sum of one thousand rupees and, for that purpose, requested a loan from PW‑8. In the Court’s view, the material presented does not inevitably establish that the accused accepted the money solely as a bribe. Accordingly, the Court was not convinced that taking a loan repayable with interest falls within the meaning of the term “gratification”. The respondent’s counsel then raised the question of the extent of this Court’s power to interfere with a judgment of acquittal. Counsel argued that the jurisdiction exercised under Article 136 of the Constitution is the same as that exercised by the Judicial Committee of the Privy Council. Counsel relied upon a minority opinion authored by Justice Venkatarama Aiyar in Aher Raja Khima v. The State of Saurashtra, where the judge, after discussing various Privy Council decisions and quoting a passage from Pritam Singh v. The State, observed that the relevant provision was Article 134. Article 134(1) confers an unconditional right of appeal to this Court on questions of both fact and law, and if the scope of an appeal under Article 136 were to be extended to factual questions, Article 134(1) would become redundant. It is clear that the Constitution intended the appeal on facts provided in Article 134(1)(a) and (b) to be excluded from the jurisdiction of Article 136, supporting the conclusion in Pritam Singh v. The State that, like the Privy Council, this Court would not act as a further appellate body on factual issues in criminal cases. Counsel also cited The State of Madhya Pradesh v. Ramakrishna Ganpatrao Limsey and maintained that the Supreme Court should not interfere with the High Court’s order merely because it reached a different view of the facts.

In this matter, the Court observed that an appeal could not be entertained on the sole ground that the High Court had reached a different conclusion on the facts. The appeal in question had been instituted on a certificate issued by the High Court, rather than by a grant of Special Leave under Article 136 of the Constitution. That judgment had subsequently been examined by a Constitution Bench in the case of State of Madras v. Gurviah Naidu and Co., Ltd., and the Acting Chief Justice S. R. Das, delivering the judgment of the Court, pointed out that the earlier decision had been made by a bench of three judges and not by a Constitution Bench. He further noted that the absence of any provision corresponding to section 417 of the Criminal Procedure Code underscored the principle that this Court, when hearing an appeal by Special Leave, should not interfere with an acquittal pronounced by the High Court merely for the purpose of correcting alleged errors of fact or law.

The Court further explained that Gurviah Naidu’s case was an appeal against an acquittal and that the Supreme Court had set aside the High Court’s judgment, holding: “In our view, the High Court erred in holding that the prosecution had failed to establish their case and in acquitting the accused.” The Court emphasized that this reversal contradicted any suggestion that Article 136 permitted this Court to interfere with High Court findings in acquittal judgments as a matter of course. The Court also referred to the decision in State of Madhya Pradesh v. Ramakrishna Ganpatrao, where Justice Mahajan expressed the opinion that the Supreme Court could intervene only where the High Court acted perversely, improperly, or was misled by fraud.

Turning to the scope of Article 136, the Court cited Justice Fazl Ali’s analysis in Pritam Singh v. The State, in which he explained that, after a careful examination of Article 136 together with the preceding articles, the Court would generally refuse to grant special leave unless the applicant demonstrated the existence of exceptional and special circumstances, the presence of substantial and grave injustice, and features of sufficient gravity to warrant a review of the appealed decision. The Court also noted that the Privy Council, when setting the limits for review in criminal matters, spoke of circumstances that are “so irregular or so outrageous as to shock the very basis of justice,” referring to the decision in Mohinder Singh v. The King. An illustrative example of this principle is the Privy Council’s decision in Stephen Seneviratne v. The King, which the Court later discussed and approved. Finally, the Court quoted Lord Thankerton’s interpretation of section 205 of the Government of India Act, 1935, as articulated in King Emperor v. Sibnath Bannerji, stating that the purpose of the provision was to confer a right of appeal in every case involving a substantial question of law.

In this case the Court observed that the wording of section 205 of the Government of India Act, 1935, which refers to “any judgment, decree or final order of a court,” was intended to create a right of appeal wherever a substantial question of law arose concerning the interpretation of the Act or any order made thereunder. The Court referred to the decision of Lord Thankerton in King Emperor v. Sibnath Bannerji, where it was held that the purpose of the provision was to confer a right of appeal in every case involving a substantial question of law. One of the issues in that case was whether the provision extended to habeas‑corpus proceedings. Lord Thankerton observed: “In the absence of an express exception of habeas corpus cases, and having in view the terms and purpose of the section, their Lordships are unable to limit the terms of the section by mere construction so as to exclude these cases from its operation.” The Court then turned to Article 136 of the Constitution, which states that the Supreme Court may in its discretion grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India. This language, the Court said, shows that in criminal matters no distinction can be drawn by construction between a judgment of conviction and a judgment of acquittal. The Court also cited Bhagwan Das v. The State of Rajasthan, which quoted with approval an observation of the Judicial Committee of the Privy Council in Stephen Seneviratne v. The King at page 299: “…there are here no grounds on the evidence, taken as a whole, upon which any tribunal could properly as a matter of legitimate inference, arrive at a conclusion that the appellant was guilty….” After a full examination of the facts and circumstances, the Supreme Court had reversed the High Court’s judgment of conviction under Article 136. The question before the Court was whether the present appeal fell within the limits set by those authorities. The Court explained that it would not readily disturb the factual findings of the High Court, but it would intervene if the High Court acted perversely or otherwise improperly. The Court found that the findings of the High Court in the present matter were, to say the least, halting, and that the overall approach to the question fell within what Justice Mahajan described in State of Madhya Pradesh v. Ramakrishna Ganpatrao as “acting perversely or otherwise improperly.” Although the learned High Court Judge mentioned at the start of the judgment the presumption that arises under section 4 of the Prevention of Corruption Act, 1947, the judgment subsequently contained the passage: “In any case, the evidence is not enough to show that the explanation offered by the accused cannot reasonably be true, and so, the benefit of doubt must go to him.” The Court held that this passage indicated a disregard of the statutory presumption required by section 4, whose language states: “Where in any trial of an offence punishable under section 161… it is proved that an accused… person has accepted… gratification… it shall be presumed unless the contrary is proved that he accepted that gratification as a motive or reward….”

In this case the Court explained that when any gratification that is not legal remuneration is taken from any person, the law provides a statutory presumption that, unless the contrary is proved, the accused accepted that gratification as a motive or reward within the meaning of section 161 of the Prevention of Corruption Act. Consequently, once the prosecution establishes that a gratification was accepted, the presumption under section 4 of the Act arises automatically. This statutory provision creates an exception to the general rule on the burden of proof in criminal matters by shifting the onus to the accused to disprove the presumption. The legislature deliberately used the expression “shall presume” rather than “may presume”; the former creates a presumption of law, while the latter would indicate a presumption of fact. Although these expressions are defined in the Indian Evidence Act for that statute, section 4 of the Prevention of Corruption Act is in part connected with the Evidence Act because it deals with evidential presumptions and therefore must be given the same meaning. The Evidence Act defines “shall presume” as follows: whenever the Act directs that the Court shall presume a fact, the Court must treat that fact as proved unless and until it is disproved. Because this is a presumption of law, the Court is obliged to apply it in every proceeding instituted under section 4, unlike presumptions of fact, which belong to a different branch of jurisprudence. The learned judge, however, is said to have ignored this special rule of burden of proof, and his reasoning was therefore considered erroneous. Moreover, the judgment indicates that several important pieces of evidence were either overlooked or not properly appreciated.

The Court also noted factual matters relating to a penalty notice issued under section 28 of the Income‑Tax Act. At the time the notice was issued, the respondent was not the Income‑Tax Officer at Coimbatore; by 6 June 1951 he had been transferred to that post, and a note dated the same day in the Penalty File recorded the entry “put up proposal to I.A.C. for levy of standard penalty,” which was made by him. Although this proposal was entered on 6 June 1951, the final orders resulting from those proceedings and the date of any such orders remain unclear, and there is no indication that the complainant received any notice concerning the matter. The complainant, identified as PW 8, testified under oath that on 28 September 1951 he went alone to meet the accused, who informed him that the penalty paper had not been disposed of and that the accounts for the current year had not yet been examined. The following day the respondent is alleged to have asked the complainant for an illegal gratification of one thousand rupees. Counsel for the respondent argued that there was no occasion for the respondent to discuss the penalty proceedings because, in his view, the recommendation had already been made by him. The Court therefore considered the factual inconsistencies and the failure to follow the statutory presumption as significant errors in the lower court’s handling of the case.

In the matter before the Court, the respondent asserted that there was nothing further to be said about the penalty proceedings because, in his view, he had already made the recommendation concerning the penalty. However, the Court identified the crucial issue as whether the complainant had been informed of what had occurred in those proceedings or whether the complainant possessed any knowledge of the same. The respondent claimed that the complainant had not been told anything and that there was no evidence that the complainant had any such knowledge. Subsequently, the respondent recounted that he had known the complainant since 1942, when he was serving as Head Clerk to the Appellate Assistant Commissioner of Income‑Tax. He explained that, toward the end of August or the beginning of September, they happened to meet casually on the road, at which time he confided that he was experiencing financial difficulties. The complainant, according to the respondent, then offered a loan of one thousand rupees to be repaid in easy instalments, and the respondent said that at that time he did not realize that the complainant was an assessee before him. The High Court accepted this narrative without examining certain material facts. First, a notice had been issued to the complainant, who filed his return on 11 August 1951. Because the respondent was the Income‑Tax Officer at that date, the notice would have been issued by him under section 22(2) of the Income‑Tax Act. Consequently, it is difficult to accept the respondent’s claim that he did not know the complainant was an assessee, and it appears improbable that the respondent would disclose his financial distress to a person who was not a banker, money‑lender, or otherwise wealthy. The complainant testified that he visited the respondent on 6 or 7 October 1951 and asked whether the respondent had received the loan money. The complainant said he could not provide any money because he had recently purchased a house, and he also inquired whether the assessment had been completed. The respondent replied that he would look into the assessment and suggested that the complainant might pay half of the illegal gratification before the Diwali period. The respondent denied making such a statement, yet the complainant’s claim that he lacked funds because of his recent house purchase was not effectively challenged during cross‑examination. The complainant had been directed to produce his accounts, which he did on 27 September. The respondent’s notes labeled P‑7 and P‑7(a) indicate that the complainant’s accounts were not accepted with respect to the Coimbatore Hotel, the order remarking that “all the defects that are usual in hotel accounts exist here.” Regarding the Bhavanisagar Hotel, the note observed that “purchases are not fully supported and sales are reckoned from till takings.” On 1 October 1951, the assessee filed his written statement and other documents, and no further action appears to have occurred until 7 November, when the

In the file there is a note that reads, “I have been keeping this in order to compare the results with other nearby hotels.” The record does not explain why no inquiries were made during the entire period covered by the assessment, and that silence appears to support the prosecution’s contention that the respondent was actively approaching the complainant in order to obtain money from him. While the assessment proceedings against the complainant were still pending, the respondent permitted the complainant to come to his residence and even visited the complainant’s café on several occasions. According to the findings of the High Court, the complainant was described as “needing the favours” of the respondent. The respondent, on his own admission, was in a desperate financial position, having managed to collect only one thousand rupees by 2 November and requiring double that sum for what he termed his son’s premium or security. The High Court judge did not give any importance to this financial pressure on the respondent. The present Court, however, is of the view that the trial judge correctly appreciated this element of the prosecution’s case and that the trial judgment was not, as the High Court alleged, tainted by any suspicion. On 6 November 1951, Circle Inspector Munisami contacted the complainant, and an arrangement was made for the complainant to deliver one thousand rupees to the respondent. The complainant actually took the money and offered it to the respondent on 8 November, but the respondent refused to accept it because he had received an anonymous letter, marked as Exhibit P‑18 and dated 6 November 1951, warning him that Malayalam people were trying to “ruin him”. Despite receiving that warning, the respondent continued to negotiate with the complainant and eventually accepted eight hundred rupees from him. Shortly after the payment, Inspector P. W. 12 and Magistrate P. W. 13 visited the respondent’s house and inquired about the money. The respondent claimed that the sum had been taken as a loan, a statement that, in context, suggests a different interpretation. The magistrate’s record states: “While the mahazar was being prepared the accused voluntarily told me that he had received the eight hundred rupees as a loan from P. W. 8, the complainant.” The magistrate also reported that he entered the verandah of the house, asked the respondent whether he had received an illegal gratification from the complainant, and demanded that the respondent produce the money. The respondent remained silent, rose from his chair and attempted to go inside the house, but Inspector P. W. 12 prevented him from doing so. The magistrate added that the respondent was seen trembling and fiddling with something concealed under a towel. When the magistrate ordered the towel to be removed, the respondent complied, and the magistrate observed a bulge at the respondent’s waist, indicating that something was being hidden there.

The accused was wearing a dhoti at the time of the inquiry. The magistrate asked him once more to produce the currency notes that were alleged to have been received. The accused complied by taking the notes from the folds of his dhoti and handing them to the magistrate. While doing so, the accused uttered nothing and remained silent.

The record shows that no substantive cross‑examination was conducted on the portions of the magistrate’s statement that related to this episode, and the High Court failed to appreciate these aspects or to assign them the appropriate importance.

On 11 July 1952, the respondent produced before the Special First Class Magistrate an unsigned promissory note purporting to bind him to pay Rs 1,000 in favour of the complainant. This note was absent from the premises when the Deputy Superintendent of Police conducted a search on 19 November 1951. Moreover, the record does not explain why the note specified a sum of Rs 1,000 when the actual amount paid was only Rs 800, nor why the respondent would offer such a note without receiving full consideration for it.

These material facts, according to this Court, were not properly examined or given due weight by the High Court. In the Court’s view, the learned judge’s approach to determining whether the Rs 800 constituted an illegal gratification or a genuine loan aligns with the observation of Mahajan J in Ramakrishna’s case, indicating that the High Court acted perversely or otherwise improperly.

The evidence and surrounding circumstances lead this Court to conclude that the transaction was not a loan but an illegal gratification. Because the sum of Rs 800 has been found to be a bribe, it is unnecessary to consider whether a loan in the present facts would also constitute an illegal gratification under section 4 of the Prevention of Corruption Act, 1947.

Consequently, the appeal is allowed. The judgment and order of the High Court of Madras are set aside, and the conviction passed by the Special Judge of Coimbatore is restored. The respondent is ordered to surrender to serve his bail bond. Appeal allowed. (i) A.I.R. 1954 S.C. 20.