R.G. Jacob vs Union Of India

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

Court: Supreme Court of India

Case Number: Not extracted

Decision Date: 28 August 1962

Coram: K.C. Das Gupta, P.B. Gajendragadkar, Raghuber Dayal

In this case, the appellant was employed as the Assistant Controller of Imports in the office of the Joint Chief Controller of Imports and Exports located in Madras. He was tried before the Special Judge of Madras on three separate counts. The first count was framed under section 161 of the Indian Penal Code. The second count invoked section 5(1)(d) read together with section 5(2) of the Prevention of Corruption Act. A third count, which was added after the trial began, was based on section 165 of the Indian Penal Code. The Special Judge acquitted the appellant of the first two charges but found him guilty of the offence under section 165 of the Indian Penal Code. Consequently, the trial court sentenced him to rigorous imprisonment for a period of one year. The appellant then appealed to the High Court of Madras. The High Court dismissed the appeal, affirmed the conviction, but reduced the term of imprisonment to a fine of four hundred rupees, with the provision that default in payment of the fine would result in three months of rigorous imprisonment. Moreover, the High Court issued a certificate under article 134(1)(c) of the Constitution, declaring the case fit for appeal to this Court, and on the basis of that certificate the present appeal was filed before the Supreme Court.

The prosecution’s case revolved around a merchant named K. R. Naidu, who conducted an export business involving onions, chillies and groundnuts. On 21 January 1958 Naidu submitted an application for the export of chillies. He received a letter dated 5 March 1958 informing him that his application had been rejected; the letter was purportedly signed by the Assistant Controller of Exports for the Joint Chief Controller of Imports and Exports. Arumugam, who appeared before the court as prosecution witness number 1 and who had been acting on behalf of Naidu, approached the appellant seeking assistance in obtaining a permit for Naidu. When Arumugam met the appellant later that evening, the appellant advised that an appeal against the rejection should be filed before the Joint Chief Controller of Imports and Exports, identified as Rangaswamy. The appellant further suggested that, for a consideration of two bags of cement and fifty rupees, he would employ his influence to secure the permit. Arumugam accepted the proposal, and the appellant handed him a sheet of paper indicating the address to which the cement was to be sent. On the following day the memorandum of appeal was dispatched by registered post to Rangaswamy. On the same day Arumugam reported the entire episode to the Deputy Superintendent of the Special Police Establishment, submitting a written complaint that outlined all the facts. The police then devised a trap to catch the appellant in the act of receiving the bribe. On the evening of 3 April 1958 Arumugam went to the appellant’s residence carrying the two cement bags, which had been marked by inserting attested cards inside the bags. The police had noted the exact number of currency notes that would be handed over. The appellant accepted both the cement bags and the fifty rupees from Arumugam. He directed that the cement bags be placed in a particular room of his building. At the pre‑arranged signal, the Deputy Superintendent, who had been waiting a short distance away, entered the house, identified himself, and demanded that the appellant produce the money and the cement bags. The appellant escorted the police officer upstairs, opened an almirah with his own key, and produced from within the almirah the exact currency notes whose numbers had been recorded by the Deputy Superintendent. The cement bags with the marked cards were also recovered from downstairs. The accused pleaded not guilty, acknowledging that the cement bags and the currency notes had been found in his house, but contending that neither the cement nor the money had ever been handed over to him, and that the notes...

The Deputy Superintendent of Police counted the currency notes that together amounted to Rs. 50 and recorded the exact number of notes. After the counting, the appellant received from Arumugam the two bags of cement along with the cash. He accepted both the cement bags and the money that had been handed over to him.

Following the appellant’s instructions, the two cement bags were placed in a designated room of the building. At the same time, the Deputy Superintendent of Police, who had been lying in wait a short distance from the house in accordance with the pre‑arranged plan, entered the house as soon as he received the agreed signal from Arumugam. Upon entering, the Deputy Superintendent disclosed his identity to the appellant and demanded that he produce the money and the cement bags that had been delivered. The appellant then escorted the Deputy Superintendent upstairs, where he opened an almirah using his own keys. From inside the almirah he produced the very currency notes whose number had previously been recorded by the Deputy Superintendent. In addition, the cement bags that contained the marked cards were discovered downstairs.

The appellant pleaded not guilty to the charges. He acknowledged that the cement bags and the currency notes were recovered from his residence, but he contended that neither the bags nor the money had ever been given to him. According to his version, the notes were found on a table and the cement bags lay in a hall nearby, and that they had been placed in his house without his knowledge or consent by Arumugam, who allegedly intended to fabricate a false case against him. He asserted that the entire narrative of Arumugam approaching him, requesting cement bags or money, or his alleged acceptance of those items, was wholly fictitious.

The Special Judge, and subsequently the High Court, accepted the prosecution’s evidence as true and rejected the appellant’s version of events. The appellant’s counsel did not seek to challenge the factual findings that had been recorded by the lower courts. The appellant’s principal argument on appeal was that, even assuming the factual findings were correct, the offence under section 165 of the Indian Penal Code had not been established. This argument rested primarily on the assertion that the appellant was only an Assistant Controller of Imports at the relevant time and therefore had no connection with the issuance of export permits. Consequently, his counsel argued, the appellant was not “subordinate” to the Joint Chief Controller of Imports and Exports, to whom the original appeal had been addressed, and therefore his acceptance of cement bags from Arumugam could not constitute an offence under section 165.

Section 165 of the Indian Penal Code provides as follows: “165. Whoever, being a public servant, accepts or obtains, or agrees to accept or attempts to obtain, for himself or for any other person, any valuable thing without consideration, or for a consideration which he knows to be inadequate, from any person whom he knows to have been or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by such public servant, or having any connection with the official functions of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be….”

Section 165 of the Indian Penal Code provides that a public servant who accepts or attempts to obtain any valuable thing without consideration, or for inadequate consideration, from a person who is or is likely to be concerned in any proceeding or business transacted by such public servant, or who has any connection with the official functions of the public servant or of any public servant to whom he is subordinate, or from any person who is interested in or related to the person so concerned, shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both. The court observed that the material facts proved in the present matter are as follows: first, the appellant, who was a public servant, accepted certain valuable items from Arumugam without any consideration; second, Arumugam was a party to an appeal against an order that rejected an application for an export licence; third, that appeal was connected with the official functions of the Joint Chief Controller of Imports and Exports, who himself is a public servant; fourth, the appellant was aware that Arumugam was concerned in that proceeding which related to the official functions of the Joint Chief Controller; and fifth, the appellant, by virtue of his official position, was subordinate to the Joint Chief Controller of Imports and Exports. It was further noted that there was no dispute that at the relevant time, namely March 1958, the accused held the position of Assistant Controller of Imports only and had no assignment concerning export permits. Having examined these facts, the court concluded that all the essential ingredients of an offence under section 165 of the Indian Penal Code appeared to have been established prima facie. Counsel for Mr Kumaramangalam argued that the fifth fact, namely that the appellant was subordinate to the Joint Chief Controller in respect of his official position, was insufficient to satisfy the requirement of “subordination” within the meaning of section 165. The court explained that subordination of one public servant to another is a familiar and inevitable feature of public administration and, in cases concerning the regulation of imports and exports, it is clear that an Assistant Controller of Imports is subordinate to the Joint Chief Controller of Imports and Exports, just as an Assistant Controller of Exports is subordinate to the same Joint Chief Controller, while the two assistant controllers are not subordinate to each other. Counsel further submitted that the term “subordinate” in section 165 should be interpreted as “functionally subordinate”, contending that although the appellant was administratively subordinate to the Joint Chief Controller, he was not functionally subordinate because, as Assistant Controller of Imports, he had no involvement in the appeal concerning the rejected export licence. The court observed that the expression “functionally subordinate” is not an entirely satisfactory formulation, because any administrative subordination inevitably entails some degree of functional subordination, at least with respect to certain functions. The learned counsel’s argument therefore hinged on the notion that “subordinate” in the statute means subordinate only with respect to the specific official functions that are directly connected with the business or transaction in question.

In this matter, counsel contended that the word “subordinate” appearing in section 165 ought to be interpreted as “subordinate in respect of those very official functions with which the business or transaction is connected.” To support this view, he referred to sections 161, 162 and 163 of the Indian Penal Code. He explained that section 161 punishes a public servant who accepts gratification in relation to his official act or official functions; section 162 punishes any person who induces a public servant, by corrupt or illegal means, to do or omit something connected with the public servant’s official functions; and section 163 punishes any person who induces a public servant, by exercising personal influence, to do or omit something in connection with the public servant’s official functions. He further noted that section 164 makes the abetment of offences under sections 162 and 163 punishable. On the basis of these provisions, counsel argued that the language of section 165 should be read narrowly so that it penalises only the taking of gratification by a public servant when that gratification bears some connection to the public servant’s own official functions. Accordingly, he proposed that the term “subordinate” in section 165 should acquire the same limited meaning.

To illustrate his argument, counsel presented a hypothetical scenario. He described a district collector, designated as X, who was handling the assessment of revenue on an application filed by a person identified as A. He then introduced Y, a peon employed in a department subordinate to the collector but unrelated to revenue matters. According to the illustration, Y accepts money from A, aware that A is engaged in business with the collector X. Counsel asserted that under his proposed interpretation, Y would be guilty of an offence under section 165 even though Y has no functional connection with the collector’s handling of A’s application. He admitted that in practice it is unlikely that Y would have the opportunity to accept money from A when Y has no realistic chance of influencing the outcome of the application. Nevertheless, assuming such an opportunity existed and Y did accept the money, counsel argued that punishing Y under section 165 would lead to undesirable consequences. The court observed that section 165 was deliberately drafted to cover corrupt practices that fall outside the scope of sections 161, 162 and 163. By employing the term “subordinate” without any qualifying phrase, the legislature intended to reach subordinates who may have no direct functional link to the transaction in question. Consequently, the court found no justification for inserting the limitation “in respect of those very functions” into the word “subordinate,” as such an insertion would amount to adding words to the statute, which is impermissible. The legislative choice of the plain term “subordinate” therefore reflects a clear intention to punish subordinates even when they lack any functional connection with the specific business or transaction.

The Court observed that the term “subordinate” in the provision was intended to cover persons who had no connection with the particular function that gave rise to the business or transaction in question. Accordingly, restricting the meaning of “subordinate” in the manner suggested by the learned counsel would run contrary to the legislative intention and would impose a different policy than that chosen by Parliament. The Court held that it possessed no authority to rewrite the statute in that way. Consequently, the contention that “subordinate” should be interpreted as meaning something broader than merely “administratively subordinate” was rejected. The Court therefore affirmed that the appellant was correctly characterised as “subordinate” to the Joint Chief Controller, even though the appellant did not have any specific functions to perform in relation to the appeal before the Joint Chief Controller of Imports and Exports. Mr. Kumaramangalam then attempted to persuade the Court that, on the facts, Arumugam operated as a police informer and therefore was not truly involved in the appeal before the Joint Chief Controller of Imports and Exports. He argued that, on that basis, it would be reasonable to conclude that his client had not committed an offence under section 165. The Court, however, noted that the High Court had granted a certificate of fitness to appeal solely because the question of how to interpret the word “subordinate” presented a substantial question of law, was not answered by any specific authority, and involved a matter of public importance. In light of that limited ground, the Court decided that it was not appropriate to examine the additional issue raised by Mr. Kumaramangalam, and consequently did not permit him to argue that point. The Court added that it could not appreciate the reasoning of the High Court in reducing the sentence imposed by the Trial Court. For these reasons, the Court dismissed the appeal and ordered that the appeal be dismissed.