TaxTMI 
TaxTMI 
2025 (5) TMI 395
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....ation of 'Remuneration' in light of the Delhi Province Stamp Rules, 1934 ................................................................................ 18 b. Meaning of 'Commission' under Section 194H of the 1961 Act and Section 2(c)(i) the PC Act ...................................................................... 24 iii. Public Duty as the determinant of status of Public Servant ... 29 iv. Legality of appellant's conviction .......................................... 32 G. CONCLUSION ............................................................................ 42 1. Leave granted. 2. This appeal arises from the judgment and order passed by the High Court of Delhi in Criminal Appeal No. 348 of 2013 ("impugned judgment") by which the High Court dismissed the appeal filed by the appellant herein and thereby affirmed the judgment and order dated 30.01.2013 passed by the Special Judge in Complaint Case No. 11 of 2009 holding the appellant herein guilty of the offence under Sections 7 and 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988 respectively (for short, "the PC Act"). A. FACTUAL MATRIX 3. As per the case of the prosecution, on....
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....t fell for the consideration of the High Court was "whether a stamp vendor is a public servant for the purposes of the PC Act or not." 4.1 The High Court answered the aforesaid question in the affirmative. It held that ensuring access to stamp papers, which are indispensable for legal transactions, falls within the scope of 'performance of a public duty'. The said public duty i.e., vending of the stamps, is a licensed activity regulated under the statutes governing the sale of judicial and non-judicial stamp papers. It further held that the fact that stamp vendors purchase these papers at a discounted rate before selling them to the public does not diminish the public nature of the duty they perform. The High Court added that in terms of Explanation 1 to Section 2 of the PC Act, it is not necessary for the stamp vendor to be 'appointed' by the Government in order to be a public servant. 4.2 The High Court also adverted to the Delhi Province Stamp Rules, 1934 (for short, "the 1934 Rules") and observed that Rule 28 of the 1934 Rules stipulates the conditions governing the grant of license to a stamp vendor and violation of the said rule would amount to an illegal act. Further, ....
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....e appellant or from the register lying on his table, the Court observed that the wash of the appellant's hand did turn pink, and both the GC notes were found, even if not directly from the appellant, then too certainly the notes were found placed on the register. Further, the testimony of the Raid Officer, that it was the panch witness who pointed out that money accepted by the appellant was lying on his register, was found to be reliable and trustworthy. The panch witness also stated that the accused made an entry in the register after accepting the money. The High Court was of the view that the evidence of the complainant corroborated by the evidence of the Raid Officer established the culpability of the appellant beyond reasonable doubt. C. SUBMISSIONS ON BEHALF OF THE APPELLANT 5. Mr. S. K. Rungta, the learned Senior Counsel appearing for the appellant submitted that the prosecution instituted against the appellant under the PC Act itself was not maintainable. It was argued that at best the prosecution could have been under the Indian Stamp Act, 1899 (for short, "the 1899 Act") alongwith the 1934 Rules, as these comprehensively regulate the sale of stamp papers by license....
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....ealed later at the Office of the ACB. 5.4 Mr. Rungta also highlighted a few mitigating circumstances for the purpose of reducing the sentence awarded by the Trial Court, more particularly, the fact that the appellant was only 19 years of age at the time of the commission of the offence. 5.5 In such circumstances referred to above, he prayed that there being merit in the present appeal, the same may be allowed and the impugned judgment and order passed by the High Court may be set aside and the appellant herein may be acquitted of the charges levelled against him. Lastly, Mr. Rungta highlighted a few of the mitigating circumstances for the purpose of reducing the sentence of awarded by the Trial Court, more particularly the fact that the appellant was only 19 years of age at the time of the commission of the offence. D. SUBMISSIONS ON BEHALF OF THE RESPONDENT 6. Ms. Aishwarya Bhati, the learned Additional Solicitor General appearing for the respondent State, on the other hand, submitted that no error, not to speak of any error of law, could be said to have been committed by the High Court in passing the impugned judgment. She submitted that the High Court has rightly tak....
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....gislative intent behind the definition of "public servant" under Section 2(c) of the PC Act 8. Before adverting to the rival submissions canvassed on either side, we deem it absolutely necessary to look into the backdrop of the PC Act. It cannot be lost sight of the fact that, the repealed Prevention of Corruption Act, 1947 (for short, "the Act 1947"), was enacted with the avowed object and purpose of effectively preventing bribery and corruption. The PC Act which repeals and replaces the 1947 Act provides for a very wide definition of the term "public servant" in clause (c) of Section 2. 9. The Statement of Objects and Reasons, attached to the Bill by which the PC Act was introduced by the legislature, throws light on the intention of the legislature in providing a very comprehensive definition of the words "public servant". It gives the background in which the legislation was enacted. The PC Act, which contains a much wider definition of "public servant", was brought in force to purify the public administration. Para 3 of the Statement of Objects and Reasons reads thus: "3. The Bill, inter alia, envisages widening the scope of the definition of the expression 'publ....
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...."public servant", therefore, deserves a wide and purposive construction. In construing the definition of "public servant" in Section 2(c) of the PC Act, the Court is required to adopt a purposive approach as would give effect to the intention of the legislature. 13. In the aforesaid context, we deem it appropriate to refer to the decision of this Court in State of M.P. v. Ram Singh, reported in (2000) 5 SCC 88, wherein this Court observed as follows:- "9. The menace of corruption was found to have enormously increased by the First and Second World War conditions. Corruption, at the initial stages, was considered confined to the bureaucracy which had the opportunities to deal with a variety of State largesse in the form of contracts, licences and grants. Even after the war the opportunities for corruption continued as large amounts of government surplus stores were required to be disposed of by the public servants. As a consequence of the wars the shortage of various goods necessitated the imposition of controls and extensive schemes of post-war reconstruction involving the disbursement of huge sums of money which lay in the control of the public servants giving them a w....
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....would advance the object underlying the Act, namely, to make effective provision for the prevention of bribery and corruption and at any rate not defeat it." (Emphasis supplied) 14. What is relevant to note from the aforesaid is that the PC Act was enacted after the repeal of the 1947 Act with the object of dealing with the circumstances, contingencies and shortcomings which were noticed in the working and implementation of the 1947 Act. The law relating to prevention of corruption was essentially made to deal with the public servants, not as understood in common parlance but as specifically defined in the PC Act. 15. While holding that a deemed university would fall within the ambit of the PC Act, a three-Judge Bench of this Court in Mansukhbhai Kanjibhai Shah (supra) observed that it falls upon the courts to interpret provisions of an anti-corruption legislation in a manner to strengthen the fight against corruption. It was further added that in case two views are possible, the court should accept the one that seeks to eradicate corruption over the one which seeks to perpetuate it. The relevant observations are reproduced hereinbelow: "25. However, we are ....
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....perform any less or any different a public duty, than those performed by a university simpliciter, and the officials therein." (Emphasis supplied) ii. Stamp Vendors are "Public Servants" 16. In light of the observations made by this Court in Ram Singh (supra) and Mansukhbhai Kanjibhai (supra), we now proceed to assess whether a stamp vendor comes within the purview of a "public servant" as defined under Section 2(c)(i) of the PC Act. The provision reads thus: "(c) "public servant" means, - (i) any person in the service or pay of the Government or remunerated by the Government by fees or commission for the performance of any public duty;" 17. A person would be a public servant under Section 2(c)(i) of the PC Act if he is: 1. in the service of the Government; or 2. in the pay of the Government; 3. remunerated by fees or commission for the performance of any public duty. 18. All three categories are independent of each other. There may be cases where more than one of the aforesaid categories are applicable and "or" may be read as "and", however, the present case does not warrant such reading. 19. In the present factual mat....
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.... must be permitted to procure supplies on any day and at any hour during treasury working hours, without unnecessary delay. 23. Further, Rule 28 states the conditions which every license granted under the rules is subject to. Rule 28(vii) prescribes that a vendor is bound to sell stamps on immediate payment permitted by his license. Further, he shall not demand or accept for any stamp any consideration exceeding the value of such stamp. Rule 28(xiii) also mandates that the vendor shall make corresponding entries in his vend register and get the entry attested by the purchaser. Upon filling up of the register, the vendor has to deliver the same to the Collector or any other officer deputed to receive the same. 24. Lastly, Rule 28(xx) mandates that the remuneration to the vendor shall be in the form of discount allowed from time to time under the orders of the local Government. In furtherance, Rule 34 states the rule for remuneration of vendors, under the heading "Commission allowed on Court-fee stamps". It states that every licensed vendor of court-fee stamps shall be entitled to discount at the rate of 1% on stamps upto Rs. 100 in a single transaction purchased by him, howeve....
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....hout any margin of profit. The discount, therefore, serves as a form of remuneration and operates as a commercial incentive, enabling the vendor not only to recoup the purchase amount but also to earn a commission in the nature of the differential amount between the procurement cost and the face value. Hence, the discount is the only form of commission. 29. At this stage, we deem it appropriate to refer to the object behind the stamp duty. It is important to underscore that the object of the 1899 Act, along with its provisions, must be interpreted in light of the interest of the Government in ensuring adequate remuneration to licensed stamp vendors. While examining the relevant provisions, it is pertinent to ask-why does the Government find it necessary to remunerate a licensed stamp vendor at all? 30. The 1899 Act is a fiscal enactment, enacted with the primary objective of securing revenue for the State through the imposition of stamp duties on certain instruments. This underlying purpose is clearly reflected in Section 3 of the 1899 Act. Section 5 further bolsters the object by stating that where an instrument deals with several distinct matters, the total stamp duty payab....
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....f the appellant from another standpoint. The appellant by relying on Ahmedabad Stamp Vendors (supra), which was affirmed by this Court in Commissioner of Income Tax, Ahmedabad (supra), submitted that the stamp vendors are not agents of the State Government. It was submitted that the purchase of stamps by the vendor from the treasury results in the transfer of ownership to the vendor, thereby precluding the characterization of the relationship as one of principal and agent. Consequently, the discount on the purchase of the stamps cannot be said to be commission neither in terms of Section 194H of the 1961 Act nor in terms of Section 2(c)(i) of the PC Act. The appellant's submission although, at first glance, appears persuasive, but it does not withstand scrutiny. 35. The High Court of Gujarat in Ahmedabad Stamp Vendors (supra) held that in spite of the restrictions on a licensed stamp vendor under the relevant rules, the transactions would still be a sale and not one between a principal and agent. There is no gainsaying that although the Government has imposed restrictions on the licensed stamp vendors by way of the relevant rules qua the manner of carrying on the business yet th....
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.... may likely defeat the purpose of the Act has to be ignored and not accepted. A definition, like any other word in a statute, has to be read in the light of the context and scheme of the Act. 40. The definition of "public servant" under Section 2(c)(i) can be said to have three parts, as they are disjunctive: first, a person who is in the service of the Government; secondly, a person who is in the pay of the Government; thirdly, a person who is remunerated by fees or commission for the performance of any public duty. The expression "remunerated" in the third part has to be read in context and in line with the expressions in the first and the second part i.e., "in the service" and "in the pay". The three key expressions, "in the service", "in the pay" and "remunerated" by the Government belong to the same genus and have the same flavour. In the first two parts, a person is rendering his services for the Government which implicitly means discharging a public duty. Whereas, in the third part, even though a person is not rendering his services for the Government but is being remunerated for discharging a public duty. In this context, the terms "fees or commission" must be construed ....
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....uch circumstances, it would be improper to construe the definition in a manner that limits its scope, thereby defeating the very essence and purpose of the statute. 44. It is an important rule of interpretation that every interpretation of a statute must be undertaken by considering the statute in its entirety, the prior state of the law, other statutes in pari materia, the general scope and purpose of the legislation, and the mischief that the legislature intended to address. iii. Public Duty as the determinant of status of Public Servant 45. We now proceed to consider the case of the appellant on the second aspect of the definition of a public servant i.e., whether the remuneration received by a licensed stamp vendor is for the performance or discharge of a public duty. As we have discussed in the preceding section, it is the nature of duty which is the determining factor in deciding whether a person qualifies to be a public servant and not the manner of appointment or mode of remuneration. The primary test of qualification for inclusion in the definition of "public servant" in the third part of Section 2(c)(i) is whether the concerned person is performing any public dut....
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....to undertake civil construction works assigned by the Government. On receipt of a complaint of possession of disproportionate assets as against the known sources of his income, an FIR was registered. The petitioner sought quashing of the FIR on the ground that respondent-authority does not have the power to register a case against the petitioner as he is not a public servant. The High Court held that having regard to the nature of work carried on by the petitioner he would fall within the definition of the word "public duty" as defined under the PC Act. Hence, even if an individual does not qualify as a public servant under the PC Act, they may still fall within its ambit if they are engaged in the discharge of any public duty. The relevant observations are reproduced hereinbelow: "13. From the reading of the definition of the word 'public servant as found in the P.C. Act, it is very clear that a person who holds an office by virtue of which he is authorized or required to perform any public duty, and any person or employee of any institution if it has been receiving or if it has received any financial assistance from the State or Central Government, shall be considered as....
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....e, at about 2:45 PM, he proceeded with the raiding team to the Office of Sub-Registrar, Janakpuri. At about 3:45 PM, he attempted to purchase a stamp paper of Rs. 10/- from the appellant, who demanded Rs. 12/-, stating that it was his usual charge. As per the directions of the Raid Officer, the complainant then handed over the smeared GC Notes from his shirt pocket, which the appellant accepted with his right hand. At this point, the complainant failed to recollect as to where the appellant had kept the money thereafter. He added that the ACB officials apprehended the appellant, and the Raid Officer took a wash of the right hand of the appellant, which changed the colour of the solution. 47.1 At this stage, the Public Prosecutor sought to cross-examine the complainant, alleging that as the complainant was resiling from his earlier statement he be declared as a hostile witness. During the cross-examination by the Public Prosecutor, the complainant revealed further details by stating that the Raid Officer and Investigating Officer (IO) had recorded all proceedings at the spot. The Raid Officer had instructed the panch witness to stay close to the complainant, listen to the c....
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....ng this, the panch witness in his examination-in-chief deposed that on 09.12.2003, he was deputed as a panch witness in the ACB. He, alongwith the complainant, Raid Officer, and other ACB officials left for the Sub-Registrar Office, Janakpuri. The Raid Officer had directed him to stay close to the complainant and overhear the conversation with the stamp vendor. At this stage, the prosecutor sought permission to cross-examine him. On being cross-examined, he stated that the GC Notes of Rs. 10/- and Rs. 2/- were recovered from the accused but he could not recall whether he had informed the Raid Officer about any demand for Rs. 12/- instead of Rs. 10/- for a stamp paper. In his cross-examination by the counsel for the appellant, he reiterated that he does not recollect whether the appellant demanded for Rs. 12/- for a stamp paper of Rs. 10/-. He admitted that he was very close to the complainant at the time of the transaction. 51. In C.K. Damodaran Nair v. Govt. of India reported as (1997) 9 SCC 477, this Court, although interpreting the term "accept" in the context of the 1947 Act, observed that "accept" means to take or receive with a consenting mind. In contrast, "obtain" was un....
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.... issue. In other words, mere acceptance or receipt of an illegal gratification without anything more would not make it an offence under Section 7 or Sections 13(1)(d)(i) and (ii), respectively of the Act. Therefore, under Section 7 of the Act, in order to bring home the offence, there must be an offer which emanates from the bribe-giver which is accepted by the public servant which would make it an offence. Similarly, a prior demand by the public servant when accepted by the bribe-giver and in turn there is a payment made which is received by the public servant, would be an offence of obtainment under Sections 13(1)(d)(i) and (ii) of the Act." (Emphasis supplied) 54. It was further explained by this Court in P. Satyanarayana Murthy v. State of A.P., reported in (2015) 10 SCC 152, as follows: "23. The proof of demand of illegal gratification, thus, is the gravamen of the offence under Sections 7 and 13(1)(d)(i) and (ii) of the Act and in absence thereof, unmistakably the charge therefor, would fail. Mere acceptance of any amount allegedly by way of illegal gratification or recovery thereof, dehors the proof of demand, ipso facto, would thus not be sufficient to ....
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....y unreliable witness, the court again faces no ambiguity in discarding the testimony. The real challenge arises when the witness is neither wholly reliable nor wholly unreliable. In such situations, the court must proceed with caution and seek corroboration in material particulars, whether through direct or circumstantial evidence. The court's duty to act on the testimony of a single witness arises when it is satisfied, upon a careful perusal of the testimony, that it is free from all taints and suspicions. [See: Vedivelu Thevar v. State of Madras, 1957 SCC OnLine SC 13; State of Madhya Pradesh v. Balveer Singh, 2025 SCC OnLine SC 390] 59. Although, it cannot be said that the complainant did not support the prosecution's case at all, yet there were lapses on his part in disclosing significant facts alongwith material inconsistencies between his testimony and that of the panch witness. The testimony of the complainant and the Raid Officer reveal that the panch witness was instructed to accompany the complainant so as to enable the raiding team to apprehend the appellant as soon as he makes a demand for illegal gratification. The panch witness admitted that he was in a close proxi....
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.... the Rs. 2/- note. Hence, the mere turning of the solution pink cannot, by itself, establish the acceptance of illegal gratification. v. Presumption under Section 20 of the PC Act 64. Insofar as the presumption under Section 20 of the PC Act is concerned, such presumption is drawn only qua the offence under Sections 7 and 11 respectively and not qua the offence under Section 13(1)(d) of the PC Act. The presumption is contingent upon the proof of acceptance of illegal gratification to the effect that the gratification was demanded and accepted as a motive or reward as contemplated under Section 7 of the PC Act. Such proof of acceptance can follow only when the demand is proved. 65. In that case, the prosecution evidence alone cannot be considered for the purpose of coming to the conclusion. The evidence led by the prosecution and, the suggestions made by the defence witnesses, if any, are also required to be considered. It is then to be seen as to whether the total effect of the entire evidence led before the court is of a nature by which the only conclusion possible was that the public servant accepted the amount. If the answer is in affirmative, then alone it can be held ....