Does the presumption under Section 20 of the Act arise without proof of the foundational facts of demand and acceptance by the accused?

Paragraph 46In C.M. Girish Babu v. CBI[^8], this Court held that mere recovery of tainted currency notes is insufficient to sustain a conviction unless the prosecution proves beyond reasonable doubt that the accused voluntarily accepted the money knowing it to be illegal gratification. The Court observed that recovery, divorced from proof of demand and acceptance, cannot by itself establish the commission of an offence under the Act.

Paragraph 47The principle was reiterated and emphatically restated in B. Jayaraj v. State of Andhra Pradesh[^9]. This Court held that proof of demand is an indispensable essentiality for establishing the offence and that in the absence of proof of demand, possession and recovery of currency notes from an accused would not establish the offence. This Court further held that the statutory presumption under Section 20 of the Act does not arise unless the foundational facts giving rise to such presumption are first established by the prosecution, as under: - “8. In the present case, the complainant did not support the prosecution case insofar as demand by the accused is concerned. The prosecution has not examined any other witness, present at the time when the money was allegedly handed over to the accused by the complainant, to prove that the same was pursuant to any demand made by the accused. When the complainant himself had disowned what he had stated in the initial complaint (Ext. P-11) before LW 9, and there is no other evidence to prove that the accused had made any demand, the evidence of PW 1 and the contents of Ext. P-11 cannot be relied upon to come to the conclusion that the above material furnishes proof of the demand allegedly made by the accused. We are, therefore, inclined to hold that the learned trial court as well as the High Court was not correct in holding the demand alleged to be made by the accused as proved. The only other material available is the recovery of the tainted currency notes from the possession of the accused. In fact such possession is admitted by the accused himself. Mere possession and recovery of the currency notes from the accused without proof of demand will not bring home the offence under Section 7. The above also will be conclusive insofar as the offence under Sections 13(1)(d)(i) and (ii) is concerned as in the absence of any proof of demand for illegal gratification, the use of corrupt or illegal means or abuse of position as a public servant to obtain any valuable thing or pecuniary advantage cannot be held to be established. 9. Insofar as the presumption permissible to be drawn under Section 20 of the Act is concerned, such presumption can only be in respect of the offence under Section 7 and not the offences under Sections 13(1)(d)(i) and (ii) of the Act. In any event, it is only on proof of acceptance of illegal gratification that presumption can be drawn under Section 20 of the Act that such gratification was received for doing or forbearing to do any official act. Proof of acceptance of illegal gratification can follow only if there is proof of demand. As the same is lacking in the present case the primary facts on the basis of which the legal presumption under Section 20 can be drawn are wholly absent.” We are aware that in the aforesaid case, the complainant did not support the Prosecution, as in the present case, but the legal principle remains that the foundational facts have to be proved for attracting Section 20 of the Act.

Paragraph 49The law was comprehensively examined by a Constitution Bench of this Court in Neeraj Dutta v. State (Government of NCT of Delhi)[^11]. After an exhaustive survey of precedents, the Constitution Bench reaffirmed that proof of demand and acceptance of illegal gratification remains the gravamen of offences under the Prevention of Corruption Act. At the same time, the Court clarified that proof of demand need not invariably be by direct evidence and may, in an appropriate case, be established through circumstantial evidence. The Constitution Bench also clarified that the absence of the complainant's testimony would not necessarily be fatal if demand and acceptance can otherwise be proved through reliable evidence and surrounding circumstances. The Constitution Bench further explained that the presumption under Section 20 of the Act is not intended to relieve the prosecution of its primary burden. The presumption operates only after the prosecution establishes the foundational facts necessary to show that the accused accepted or obtained gratification other than legal remuneration. Once such foundational facts are established, the burden shifts to the accused to offer a satisfactory explanation. However, where the prosecution itself fails to establish the foundational facts, the presumption does not arise.