No Presumption Of Corruption Due To Misuse Of Authority If There's No Proof Of Demand & Acceptance Of Bribe: Supreme Court

The Supreme Court recently held that a mere allegation of misuse of authority will not give rise to a presumption under Section 20 of the Prevention of Corruption Act, 1988 (PC Act) unless there is proof of demand and acceptance of illegal gratification.

Section 20 of the PC Act presumes that a public servant who accepts an undue advantage did so as a motive or reward.  

The Court ruled that the presumption under Section 20 of the PC Act would not arise unless the proof of demand and acceptance of illegal gratification is established. The Court said that mere allegation of misuse of authority, for instance, not following the tender process in the present case, does not automatically amount to corruption unless there is evidence of illegal gratification.

“Unless proof is offered to the satisfaction of the Court that there is a demand and acceptance of illegal gratification, the presumption would not arise. The presumption under Section 20 of the Act cannot arise on the mere allegation of a demand and acceptance of illegal gratification as rightly pointed out by the appellant.”, the Court observed.

The bench comprising Justices Sudhanshu Dhulia and K Vinod Chandran heard the case where the Appellant-Public Servant had allegedly misused his authority by deviating from the government's existing policy by granting fishing contracts without a tender process, causing a loss of crores to the state exchequer.

A case under the PC Act was registered against him on the premise that he misused his authority, causing loss to the state exchequer, and thus he was liable to be prosecuted for corrupt practices.

Upon the High Court's refusal to quash the corruption case, the Appellant appealed to the Supreme Court.

Before the Supreme Court, the Appellant contended that mere allegation of accepting illegal gratification upon misuse of his authority is insufficient to book him for corruption charges. He argued that the failure of the prosecution to show proof of demand and acceptance of illegal gratification would invalidate the prosecution's case.

Finding merit in the Appellant's arguments, the judgment authored by Justice K Vinod Chandran observed that mere allegations of demand and acceptance of bribe upon misuse of authority would not establish the corruption unless the demand and acceptance of illegal gratification was proved through evidence.

“The investigation report, as we observed, speaks only of an allegation of misuse of authority, without any allegation of demand and acceptance of bribe as against the appellant. The presumption under Section 20 of the Act is that, if there is a demand and acceptance of bribe, then there is a presumption that it is to dishonestly carry out some activity by a public servant, for which, first, proof will have to be offered of the demand and acceptance. It is not otherwise that, if there is a misuse of authority then there is always a presumption of a demand and acceptance of bribe, resulting in a valid allegation of corruption.”, the court observed.

The Court referenced the case of Neeraj Dutta v. State 2022 LiveLaw (SC) 1029, where it was held that proof of demand and acceptance of illegal gratification is a sine qua non for establishing corruption under the Prevention of Corruption Act.

“We accept the contention raised by the appellant that there is not even an iota of material available from the investigation report, the pre-charge statements recorded from the complainant or the police officers or even the statements of persons questioned by the investigation team, as available in the report, to attract the ingredients of the provisions under the Prevention of Corruption Act.”, the court observed.

In terms of the aforesaid, the Court allowed the appeal and dropped the proceedings initiated against the appellant.

Case Title: Dileepbhai Nanubhai Sanghani Versus State of Gujarat & Anr.

Citation : 2025 LiveLaw (SC) 273

Click here to read/download the judgment

Appearance:

For Petitioner(s) : Ms. Anjali Chauhan, Adv. Mr. Akhil Mittal, Adv. Mr. Sunil Mittal, Adv. Ms. Meenakshi Kalra, AOR

For Respondent(s) : Mr. Iqbal Syed, Sr. Adv. (Virtual) Mr. Mohammad Aslam, AOR Mr. Saroj Kumar Sinha, Adv. Mr. Aniq Kadri, Adv. Mr. Amaan Syed, Adv. Mr. Prithu Parimal, Adv. Mr. Vishrut Bhandari, Adv. Ms. Swati Ghildiyal, AOR Ms. Devyani Bhatt, Adv. Ms. Abhipsa Mohanty, Adv.