Sri C. I. Emden vs The State Of U. P
Rewritten Version Notice: This is a rewritten version of the original judgment.
Court: Supreme Court of India
Case Number: Criminal Appeal No. 68 of 1958
Decision Date: 15 December 1959
Coram: P.B. Gajendragadkar, Bhuvneshwar P. Sinha, K.C. Das Gupta, J.C. Shah
In this matter the Supreme Court of India delivered its judgment on 15 December 1959. The case was styled Sri C. I. Emden versus The State of Uttar Pradesh. The judgment was authored by Justice P. B. Gajendragadkar, who sat on a bench together with Justice Bhuvneshwar P. Sinha, Justice K. C. Das Gupta and Justice J. C. Shah. The official citations for this decision are reported in 1960 AIR 548 and 1960 S.C.R. (2) 592, and it has subsequently been referenced in several later Supreme Court reports.
The factual background presented to the trial court showed that the appellant, who was employed as a locomotive foreman, had received a sum of rupees three hundred and seventy-five from a railway contractor. The appellant explained that he had taken the money as a loan because he needed funds to buy clothing for his school-going children. The special trial judge accepted the contractor’s testimony, concluded that the money had been taken as a bribe, found the appellant’s explanation implausible and untrue, and therefore applied the statutory presumption contained in section 4 of the Prevention of Corruption Act, 1947. On the basis that this presumption had not been rebutted, the judge convicted the appellant under section 161 of the Indian Penal Code and under section 5 of the Prevention of Corruption Act.
Upon appeal, the High Court examined the same facts and held that, in view of the evidence, the statutory presumption under section 4 ought to be raised. It further observed that the appellant’s story was improbable and palpably unreasonable, and that the presumption therefore remained unrebutted. Accordingly, the High Court affirmed the conviction.
The appellant raised three principal arguments before this Court. First, he contended that section 4 of the Prevention of Corruption Act was ultra-violet because it infringed the guarantee of equality before the law contained in article 14 of the Constitution of India. Second, he argued that the presumption could not be invoked merely on proof that he had accepted money; rather, it was necessary to establish that the money had been taken as a bribe. Third, he maintained that even if the presumption arose, it was defeated by his provision of a reasonably probable explanation for receiving the sum.
The Court rejected all of these submissions. It held that section 4 does not offend article 14, because the classification of public servants brought within its ambit is based on an intelligible differentia that bears a rational relation to the purpose of the legislation, namely, the eradication of bribery and corruption among public officials. The Court endorsed the view expressed in Ram Krishna Dalmia v. Justice S. R. Tendolkar, [1959] S.C.R. 279, and also referred to the decision in A. S. Krishna v. The State of Madras, [1957] S.C.R. 399, as supportive authority for its conclusion.
The Court observed that the statutory presumption under section 4 of the Prevention of Corruption Act arose once it was established that the accused had actually received the specified sum and that such sum did not constitute legal remuneration. The term “gratification” in section 4(1) was interpreted according to its ordinary dictionary meaning, namely the satisfaction of an appetite or desire, and it was held that the term could not be read to signify money paid as a bribe. Consequently, the High Court was justified in raising the presumption against the appellant because it was admitted that he had taken the money from the contractor and that the amount received was not legal remuneration. The High Court’s approach was affirmed by reference to State v. Pundlik Bhikaji Ahire, (1959) 61 Bom. L.R. 837 and Promod Chander Shekhar v. Rex, I.L.R. 1950 All. 382, while the decisions State v. Abhey Singh, A.I.R. 1957 Raj. 138 and State v. Pandurang Laxman Parab, (1958) 60 Bom. L.R. 811 were expressly disapproved. Even assuming that the presumption created by section 4(1) could be rebutted by the accused offering a reasonably probable explanation, the Court held that the explanation furnished by the appellant was wholly unsatisfactory and unreasonable. The Court also referred to Otto George Gfeller v. The King, A.I.R. 1943 P.C. 211 and Rex v. Cary Briant, (1943) I K.B. 607 in support of this view. The judgment related to Criminal Appeal No. 68 of 1958, filed by special leave from the Allahabad High Court (Lucknow Bench) judgment dated 11 July 1957 in Criminal Appeal No. 515 of 1955, which itself arose from the Special Judge, Anti-corruption, Lucknow order dated 31 October 1955 in Criminal Case No. 2/3/32/45 of 1953-55. Counsel for the appellant were Frank Anthony, Udai Pratap Singh and P.C. Agarwala, and counsel for the respondent were G.C. Mathur and O.P. Lal. The judgment was delivered on 15 December 1959 by Justice Gajendragadkar, who noted that the appellant, C.I. Emden, had been convicted under section 161 of the Indian Penal Code and section 5(2) of the Prevention of Corruption Act 2 of 1947. The prosecution case alleged that the appellant, a loco foreman at Alambagh Loco Shed, accepted a bribe of Rs. 375 from Sarat Chandra Shukla on 8 January 1953, after demanding Rs. 400 per month to allow Shukla to carry out his contract for removal of cinders from ash pits and for loading coal, a contract granted to Shukla in June 1952. The appellant had told Shukla that a similar contract holder, Ram Ratan, paid a monthly sum and that it would be in Shukla’s interest to pay the bribe, but Shukla refused, leading to hostile conduct on the part of the appellant.
In early January 1953 the appellant again demanded the monthly bribe from Shukla as he had previously suggested. On 3 January the appellant asked Shukla to pay the sum, and Shukla responded by requesting a reduction, arguing that the contract he had obtained was for a considerably smaller amount than the one granted to the former contractor Ram Ratan. The appellant consented to accept a reduced amount of Rs. 375. At that time Shukla did not have the money in hand, so he asked the appellant for a postponement in order to arrange the payment. The parties agreed that Shukla would deliver the amount to the appellant on 8 January 1953. During the intervening days Shukla approached the Deputy Superintendent of Police of the Corruption Branch and disclosed the illegal demand made by the appellant. Shukla’s statement was recorded before a magistrate, and the authorities decided to lay a trap. Consequently, a party consisting of Shukla, the magistrate, the Deputy Superintendent and several other persons proceeded to the Loco Yard. While Shukla and another individual entered the yard, the remaining members of the party remained at the gate. Inside the yard Shukla met the appellant and told him that he had brought the money. The appellant was instructed to step out of the yard to receive the payment. At approximately three o’clock in the afternoon the appellant emerged, walked around the yard and arrived at a relatively secluded spot. There he asked Shukla to hand over the money, and Shukla gave him a bundle containing marked currency notes totalling Rs. 375. At the signal given by Shukla, the concealed raiding party rushed to the location. The magistrate revealed his identity to the appellant and demanded that he produce the money he had just received. The appellant removed the notes from his pocket and handed them to the magistrate. These facts formed the basis on which charges under section 161 of the Indian Penal Code and section 5(2) of the Prevention of Corruption Act were framed against the appellant.
The appellant denied the charges. Although he admitted that he had received Rs. 375 from Shukla, he asserted that the amount had been advanced to him as a loan to meet the expenses of clothing his school-going children. According to his version, the appellant, being in need of money, had asked Kishan Chand to arrange a loan of Rs. 500; aware of his financial difficulty, Shukla purportedly offered to provide a loan of Rs. 375, which the appellant accepted. Both the prosecution and the defence presented evidence supporting their respective narratives. The special judge who tried the case evaluated the evidence and found Shukla’s testimony to be credible and sufficiently corroborated. The judge concluded that the defence story was unlikely and untrue. He also determined that, based on the evidence before him, the statutory presumption under section 4 of the Act had to be raised and that the defence had failed to rebut that presumption.
The Court observed that the statutory presumption prescribed by section 4 of the Act was required to be invoked and that the defence had failed to overturn that presumption with any evidence. Consequently, the trial judge found the appellant guilty of both charges, imposing a term of one year’s rigorous imprisonment together with a fine of five hundred rupees under section 161 of the Indian Penal Code, and additionally imposing two years’ rigorous imprisonment under section 5 of the Act. Both imprisonments were ordered to run at the same time. The appellant appealed this judgment before the High Court of Allahabad, challenging the correctness and propriety of the conviction and the sentences. The High Court dismissed the appeal, holding that, based on the facts, the statutory presumption under section 4 necessarily arose and that the appellant had not succeeded in rebutting it. In effect, the High Court confined its analysis to the existence of the presumption and the defence’s inability to disprove it, without re-examining the prosecution’s evidence. Accordingly, the High Court affirmed the appellant’s conviction, upheld the sentence under section 161, but reduced the term imposed under section 5(2) of the Act to one year, ordering both sentences to run concurrently. The appellant thereafter filed a special leave petition before this Court, seeking relief from the High Court’s order. The matter was placed before a Constitution Bench because the appellant raised the substantial question of whether section 4(1) of the Act, which mandates a presumption against an accused, is unconstitutional and ultra vires for contravening the fundamental right to equality before the law guaranteed by Article 14 of the Constitution. The Court therefore first examined the merits of that constitutional challenge. The Act, enacted in 1947, was intended to curb bribery and corruption. Section 4(1) stipulates that in any trial for an offence punishable under sections 161 or 165 of the Indian Penal Code, if it is shown that the accused has accepted, obtained, agreed to accept, or attempted to obtain any gratification or valuable thing (other than legal remuneration) from any person, a presumption arises that such acceptance or attempt was made as a motive or reward contemplated by section 161, or without consideration or for consideration known to be inadequate, unless the contrary is proved. Counsel for the appellant argued that this provision violates the equality principle enshrined in Article 14. The Court noted that the argument was difficult to accept and proceeded to consider the scope and effect of the fundamental right under Article 14 as previously examined by this Court.
In several earlier judgments the Court has repeatedly held that Article 14 does not prohibit reasonable classification for legislative purposes. While the article certainly forbids arbitrary class legislation, it permits a law to be valid when it is founded upon a reasonable classification that rests on an intelligible differentia and when that differentia bears a rational relation to the purpose the law seeks to achieve. The Court illustrated this principle in Shri Ram Krishna Dalmia v. Justice S. R. Tendolkar, where it was explained that a statute meeting these criteria cannot be successfully challenged under Article 14. In the present matter there is no doubt that the legislature, in classifying a particular group of public servants within the scope of section 4(1), employed a perfectly rational basis. The classification is founded on an intelligible differentia, and it is easy to distinguish the persons covered by the impugned provision from other categories of individuals who may be charged with different offences.
The legislature apparently recognised that courts often find it difficult to establish a charge of bribery against accused public servants, because the evidence usually presented in such cases tends to be regarded as tainted and therefore does not easily satisfy the standard of proof beyond reasonable doubt. It also recognised that corruption among public servants represents a serious menace to clean and efficient administration and must be rooted out. Consequently, the legislature enacted section 4(1) to create a statutory presumption that arises automatically once the prescribed condition precedent is satisfied. The objective pursued was the eradication of corruption in the public service, and there is a direct and rational link between that objective and the intelligible differentia on which the classification is based.
Accordingly, the Court expressed no hesitation in concluding that a challenge to the constitutional validity of section 4(1) on the ground that it violates Article 14 must fail. The Court also referred to its earlier decision in A. S. Krishna v. State of Madras, where a similar challenge to a statutory presumption under section 4(2) of the Madras Prohibition Act, 1937, was dismissed. Having settled the constitutional issue, the Court turned to the question of construing section 4(1): namely, the circumstances under which the statutory presumption is to be raised and the precise content of that presumption. Counsel for the appellant, Mr. Anthony, argued that the presumption could not be invoked merely on proof that the appellant had received Rs 375 from Shukla; he contended that the prosecution must also demonstrate that the amount was paid and accepted as a bribe.
The argument presented by counsel for the appellant concerned the interpretation of the phrase “any gratification other than legal remuneration” that appears in section 4(1). Counsel argued that even if the statutory presumption were to be raised against the appellant, the burden of proof required to establish the contrary under section 4(1) should be recognised as less stringent than the burden normally placed on the prosecution in a criminal trial. Counsel for the State, on the other hand, maintained that the presumption may be invoked whenever it is proved that the accused has accepted “any illegal gratification (other than legal remuneration) or any valuable thing,” as required by section 4(1). The Court first examined the circumstances in which the presumption may be raised. In doing so it noted that the presumption is to be understood in the context of section 161 of the Indian Penal Code, which provides that if a public servant accepts any gratification whatsoever, other than legal remuneration, as a motive or reward for performing or refraining from performing any official act, he is guilty of accepting illegal gratification. Section 4(1) therefore calls for the presumption to be raised when it is established that an accused has accepted any illegal gratification or any valuable thing, excluding trivial gratifications or those covered by the exception in sub-section (3). Counsel for the appellant submitted that the legislature deliberately used the word “gratification” rather than “money,” “gift,” or “consideration,” and that reliance could be placed on the analogous provision in section 2 of the English Prevention of Corruption Act, 1916, which expressly mentions “any money, gift, or other consideration.” The use of “gratification,” according to counsel, indicates that mere receipt of money is insufficient; the prosecution must also demonstrate that the money was received as a bribe. This view is supported by the Rajasthan High Court’s decision in The State v. Abhey Singh and by the Bombay High Court’s decision in State v. Pandurang Laxman Parab. Conversely, counsel for the State argued that the term “gratification” should be given its ordinary dictionary meaning of satisfaction of appetite or desire, and that the presumption may be raised whenever it is shown that the accused obtained satisfaction of any desire or appetite. While it is acknowledged that in many cases the satisfaction arises from the payment of money, counsel for the State rejected the contention that “gratification” should be limited to monetary payment accompanied by the requirement that the money be paid as a bribe.
The Court noted that the proposition that the term “gratification” should be limited to the receipt of a bribe had been affirmed by the Bombay High Court in the later decision of State v. Pundlik Bhikaji Ahire (3) and also by the Allahabad High Court in Promod Chander Shekhar v. Rex (4). It further quoted paragraph 3 of section 161 of the Code, which expressly declares that the word “gratification” is not confined to monetary gratification nor to gratifications that can be measured in money. Consequently, the Court held that the reference to “gratification” in section 4(1) cannot be interpreted as applying only to the payment of money. The prosecution, before it can invite the court to invoke the statutory presumption against an accused, must first establish that the accused has obtained a “gratification other than legal remuneration”. In the present matter, the prosecution succeeded in showing that the accused received the specified amount and that the amount did not constitute legal remuneration; therefore, the condition laid down in the statute was satisfied.
Looking at the context of remuneration that is lawfully payable to and receivable by a public servant, the Court observed that there is no difficulty in concluding that when money is demonstrated to have been paid to, and accepted by, a public servant, and when that money does not form part of the servant’s lawful remuneration, the statutory presumption must be raised as mandated by the section. The Court warned that if “gratification” were interpreted narrowly to mean only money paid as a bribe, then providing for the raising of a presumption would become futile or redundant. While it could be suggested that the purpose of the presumption, on such a narrow construction, is to allow the court to infer that the money was paid as a bribe or as a motive or reward under section 161, the Court expressed the view that this could not have been the Legislature’s intention when it enacted the presumption under section 4(1). In the overall context, the Court found no justification for refusing to give “gratification” its ordinary dictionary meaning.
The Court also indicated a further reason supporting this broader construction. The provision requires the presumption to be raised whenever it is shown that the accused has received any valuable thing. This clause relates to the offence defined in section 165 of the Code, where an essential element is that the valuable thing must have been received by the accused without consideration or for a consideration the accused knows to be inadequate. The Court rejected the suggestion that the relevant clause in section 4(1), which deals with acceptance of any valuable thing, should impose upon the prosecution the additional burden of proving not only that the valuable thing was received but also that it was received without consideration or for inadequate consideration. The statutory language, therefore, obliges the prosecution merely to establish receipt of a gratification that is not legal remuneration, and once that is proved, the presumption operates as prescribed.
In this appeal the Court observed that the ordinary meaning of the clause required that the statutory presumption be raised whenever it was shown that the accused had received a valuable thing without receiving anything else in return. The Court held that it would be unreasonable to interpret the word “gratification” in the same clause as demanding proof not only of the payment of money but also of the incriminating nature of that payment. Although the Legislature might have chosen the words “money” or “consideration,” the Court found that the dictionary meaning of “gratification” fitted the purpose of the provision and produced the same effect as the term “valuable thing” used in the same sentence. Consequently, the Court saw no reason to add any qualifying phrase to the word “gratification.” The Court therefore concluded that the appellant’s contention amounted to an attempt to insert a qualifying clause into the statute. Accordingly, the Court held that the High Court was justified in invoking the presumption against the appellant because the appellant himself admitted that he had received Rs 375 from Shukla and that the amount received was not legal remuneration.
The Court then examined what the presumption actually required of the appellant. Counsel for the appellant argued that in a criminal case the burden placed on an accused could never be as heavy as that placed on the prosecution, and that the High Court should have accepted the appellant’s explanation as a reasonably probable one. He further contended that the test for deciding whether a defence explanation should be accepted could not be as stringent as the test applied to the prosecution’s case. The Court noted that this issue had been considered repeatedly by Indian and English courts. For example, in Otto George Gfeller v The King (1) the Privy Council dealt with a situation in which the prosecution had proved that the accused possessed recently stolen goods and had to decide how a jury should regard the accused’s explanation of his possession. Sir George Rankin remarked that the accused did not have to prove his story, but if the story collapsed the jury might convict, meaning that the jury could find the explanation unreasonable or implausible. A similar view was expressed in Rex v. [case citation]. These authorities indicated that while the accused bears a burden to raise a reasonable explanation, that burden is lighter than the prosecution’s burden of proving guilt beyond reasonable doubt.
In Carr Briant (1) the Court observed that when a statute or common law creates a presumption against an accused, the jury must be directed that, unless the contrary is proved, it is for the jury to decide whether the contrary has been proved, that the burden of proof required is less demanding than that which the prosecution must meet to establish its case beyond reasonable doubt, and that the burden may be discharged by evidence that satisfies the jury of the probability of the matter the accused is required to establish (p. 612). The effect of these observations was to relax, to some extent, the strictness of the elementary proposition that, in civil cases, a preponderance of probability may be sufficient ground for a verdict (p. 611) (also vide: Regina v. Dunbar (2)). Relying on these decisions, counsel for the appellant argued that, in determining whether the contrary has been proved under section 4(1), the High Court should not have applied the same rigorous test used for the prosecution case. Instead, the High Court should have examined whether the appellant’s explanation was reasonably possible, rather than whether it was wholly satisfactory. Counsel for the State, however, submitted that construing the phrase “unless the contrary is proved” requires reference to the definition of “proved” in section 3 of the Evidence Act, which states that a fact is proved when, after consideration of the matter, the Court either believes it to exist or considers its existence so probable that a prudent person in the circumstances of the case ought to act on the supposition that it exists. The State also relied on section 4, which provides that when a court is directed to presume a fact, it shall record such fact as proved unless and until it is disproved (1 (1943) 1 K.B. 607; 2 (1958) 1 Q.B. 1 at p. 11). The argument therefore was that there is little scope for relaxing the burden of proof when the accused must prove the contrary under section 4(1). The Court indicated that it was not necessary to resolve this point in the present appeal and chose to assume, in favour of the appellant, that even if his explanation were reasonably probable, the presumption against him could be considered rebutted. The remaining issue was whether the appellant’s explanation was indeed reasonably probable. The appellant admitted that he had received Rs 375 from Shukla, but contended that the amount had been advanced as a loan to enable him to meet the clothing expenses of his school-going children.
To sustain his defence, the appellant appeared in court, gave his own testimony, and examined several witnesses, the most important of which were Kishan Chand and Ram Ratan. The High Court carefully scrutinised the appellant’s testimony together with the statements of the witnesses and concluded that the overall evidence could not be trusted. It observed that Kishan Chand was an interested party and that the narrative presented by him was highly improbable. Beyond this finding, the High Court also evaluated the probabilities surrounding the case by looking at the appellant’s financial circumstances at the relevant time. It recorded that the appellant possessed a bank balance of approximately Rs. 1,600 and that his monthly salary was about Rs. 600. The Court further noted that the appellant’s children, for whose clothing he claimed to have borrowed money, were due to start school in March and therefore faced no immediate pressure to obtain new garments. To explain the alleged borrowing, the appellant argued that he intended to preserve his bank balance for his daughter’s upcoming marriage, which he said would take place in the near future. The High Court was not persuaded by this justification and held that the stated purpose for which the money was supposedly borrowed could not be regarded as genuine. The Court also examined the likelihood that Shukla would have advanced a loan to the appellant, considering the nature of their relationship. It concluded that, given the strained rapport between the two men, it was extremely improbable that Shukla would have offered any financial assistance. Based on these factual considerations, the High Court determined that the appellant’s explanation was both improbable and palpably unreasonable. The judgment also referred incidentally to a statement made by the appellant on 8 January 1953 before the magistrate, a reference that was strongly contested by counsel for the appellant. It was argued that the statement, being given after the investigation had begun, should be excluded as inadmissible evidence. Assuming that this objection was well founded, the higher court nevertheless observed that the High Court’s conclusion rested largely on its assessment of the oral defence evidence and on the probability analysis, not on the disputed statement. Consequently, the higher court affirmed that the High Court was correct in rejecting the appellant’s explanation as wholly unsatisfactory and unreasonable. Because the explanation was dismissed, the court found it unnecessary to address the precise nature of the burden of proof imposed by section 4(1) once the statutory presumption arose.
The court observed that the respondent had been charged under section four sub-paragraph one of the governing statute, and that a statutory presumption had been formally raised against him. This statutory presumption operated to shift the evidential burden onto the accused, requiring him to rebut the inference created by the presumption. After reviewing the material on record, the court concluded that the appellant had not satisfied this burden, and consequently the appeal could not succeed. Accordingly, the judgment of the lower tribunal, which had found the appellant guilty and imposed a term of imprisonment, was upheld in its entirety. The sentencing order, including any fines, costs and the period of detention specified by the trial court, remained effective and was not altered by this appellate decision. In addition, the court ordered that the bail bond previously granted to the appellant be set aside, thereby withdrawing the provisional liberty that had been extended. The final directive of the appellate bench was to dismiss the appeal, to confirm the conviction and sentence, and to cancel the bail bond, thereby restoring the original order. The application of the provision under section four sub-paragraph one was deemed proper, and no error was found in the way the presumption had been invoked. Thus, the appellate court left the lower court's findings untouched and ensured that the appellant would remain in custody until the sentence is executed.