Supreme Court Upholds Acquittal of Central Excise Officers in CBI Bribery Case, Finds Demand Not Proved

A bench of Justices Pankaj Mithal and Prasanna B. Varale dismissed the State's appeal, holding that unproved demand for bribe money is fatal to conviction under the Prevention of Corruption Act.

The Supreme Court has dismissed appeals filed by the State of Uttar Pradesh against the acquittal of three Central Excise officers — A.K. Gaba, Alok Gupta, and Dushyant Kumar — who had been convicted by the Special Judge, Lucknow for offences under Section 120-B of the Indian Penal Code read with Sections 7 and 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act, 1988. A division bench of Justices Pankaj Mithal and Prasanna B. Varale found that the Allahabad High Court, Lucknow Bench, had correctly re-appreciated the evidence and was justified in holding that the prosecution failed entirely to establish the foundational requirement of demand of illegal gratification. The judgment reaffirms that mere presence of subordinate officers at a site, or recovery of tainted money without proved demand, cannot sustain a conviction under the PC Act.

How the Prosecution Case Was Built — and Where It Unravelled

The facts as recorded by the Court trace back to 5 January 1995. R.K. Srivastava, Superintendent, Central Excise, along with Inspectors A.K. Gaba and Alok Gupta, visited M/s Prime Products, Kursi Road, Barabanki and the adjoining M/s Amoli Ceraplast Ltd. Records of M/s Amoli Ceraplast Ltd. were seized without any acknowledgement being issued.

Kuldeep Tiwari, a Retainer Consultant, subsequently visited Srivastava's office on 10 January 1995 at about 10.00 p.m. seeking return of the documents. Srivastava allegedly told him that the documents would not be returned unless Rs. 80,000 was paid as illegal gratification. Tiwari lodged an FIR with the Superintendent of Police, CBI, Lucknow.

A trap was laid. On 14 January 1995, Tiwari and shadow witnesses visited Srivastava's residence with Rs. 80,000. The CBI raided the house. Rs. 60,000 was recovered from the bedroom and Rs. 20,000 from the pocket of P.K. Srivastava's jacket. The hands of R.K. Srivastava, P.K. Srivastava, and Dushyant Kumar tested positive in the phenolphthalein solution. A charge-sheet was filed on 11 November 1997 against all accused for offences under Section 120-B IPC read with Sections 7 and 13(1)(d) read with Section 13(2) of the PC Act, and Sections 114 and 201 IPC.

The Special Judge, Lucknow convicted R.K. Srivastava, A.K. Gaba, Dushyant Kumar, and Alok Gupta vide order dated 26 July 2014, while acquitting P.K. Srivastava on benefit of doubt. The convicted officers appealed to the Allahabad High Court, Lucknow Bench. By order dated 27 May 2019, the High Court allowed all three criminal appeals and acquitted the respondents, finding the prosecution evidence wholly insufficient. The State of Uttar Pradesh then approached the Supreme Court.

State's Case: Presence Equates to Conspiracy

Counsel for the State argued that A.K. Gaba and Alok Gupta were present on 10 January 1995 when the initial bribe demand of Rs. 80,000 was made by Srivastava, and also on 7 January 1995 when records were seized without a seizure receipt. Dushyant Kumar, it was urged, was present on 14 January 1995 when the bribe was accepted and had himself counted the money after acceptance.

The State pressed that the accused persons failed to explain the recovery of bribe money and the seizure of records. Since the respondents were charged under Section 120-B IPC read with Sections 7 and 13(2) of the PC Act — and not under Sections 7 and 13(2) independently as substantive offences — the State argued there was no legal requirement to prove each ingredient of those sections individually against them. The presence of hostile witnesses, the State submitted, should not have been treated as fatal when the demand and acceptance had otherwise been established.

Respondents: Subordinate Presence Is Not Criminal Participation

Counsel for the respondents countered that the trial court had convicted them on pure presumption. The respondents were junior officers required by protocol to accompany their senior, R.K. Srivastava. P.K. Srivastava — from whose jacket Rs. 20,000 was recovered — was acquitted by the trial court itself; the respondents were on a better footing than him, since no recovery was made from them and there was no evidence that records were seized at their instance.

Counsel further pointed to a structural flaw in the charge: the three Inspectors were charged under Section 120-B IPC for conspiring with the alleged chief conspirator, R.K. Srivastava — yet Srivastava himself was not charged under Section 120-B. The conspiracy charge was thus said to be without a legally connected anchor. Counsel also relied upon the respondents' statements under Section 313 of the Code of Criminal Procedure, 1973, in which they specifically denied participation in the seizure of the records. Reliance was placed on Shyamal Saha & Anr. v. State of West Bengal (2014) 12 SCC 321 for the proposition that prosecution witnesses must be scrutinised with greater care where independent witnesses turn hostile.

What the High Court Found — and What the Supreme Court Endorsed

The Supreme Court set out at length the observations of the High Court in its 27 May 2019 judgment, finding them sound. The High Court had noted that all prosecution witnesses, save PW-5, failed to support the prosecution case on the question of demand and acceptance by the respondents specifically. The trial court's judgment used the words “Sambhavtah” and “Prateet hota hai” — approximating to “possibly” and “it appears” — repeatedly, indicating that the conviction was based on surmise rather than proved fact.

The High Court had also noticed the prosecution's withholding of the tape-recorder evidence. Tiwari, the complainant, had stated in testimony that he carried a tape recorder to record the conversation of 10 January 1995. The investigating agency never seized this recording and offered no explanation for its absence. The High Court treated this as suppression of best evidence to falsely implicate Gaba and Gupta. On the conspiracy charge, the High Court found it legally anomalous that the three Inspectors were tried as conspirators with Srivastava under Section 120-B, while Srivastava himself faced no such charge, severing any legal linkage to the prime accused.

The Supreme Court agreed across all these findings. It held that proof of demand of illegal gratification is the sine qua non of an offence under Sections 7 and 13(1)(d) read with Section 13(2) of the PC Act. Without that proof, the presumption under Section 20 of the PC Act cannot be invoked. The Court drew on a consistent line of precedent: B. Jayaraj v. State of A.P. (2014) 13 SCC 55; P. Satyanarayana Murthy v. District Inspector of Police, State of Andhra Pradesh and Anr. (2015) 10 SCC 152; Banarsi Dass v. State of Haryana (2010) 4 SCC 450; C.M. Sharma v. State of Andhra Pradesh (2010) 15 SCC 1; and Mukhtiar Singh (Since Deceased) through LRs v. State of Punjab (2017) 8 SCC 136.

From P. Satyanarayana Murthy, the Court reproduced the settled position: “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 recovery of tainted money, divorced from proved demand, does not suffice for conviction.

Conspiracy Charge Also Fails

The Court separately dealt with the Section 120-B IPC charge. Citing State (NCT of Delhi) v. Navjot Sandhu (2005) 11 SCC 600 and Esher Singh v. State of A.P. (2004) 11 SCC 585, the Court restated that a criminal conspiracy requires proof of meeting of minds — a prior agreement between two or more persons to commit an illegal act. Inference of conspiracy from circumstantial evidence must form a chain leading to an irresistible conclusion of guilt, not merely suspicion arising from association or co-presence.

In the present case, the prosecution's case against the respondents rested on their physical presence at certain locations during the relevant period. No substantive evidence of any prior agreement or shared criminal intent between the respondents and R.K. Srivastava was produced. The principal allegation of demand was against Srivastava alone. The Court found that the prosecution had “miserably failed” to establish the conspiracy charge.

Adverse Inference for Withheld Tape-Recording

The Court treated the non-production of the tape recording as a matter of independent significance. Drawing on Tomaso Bruno v. State of Uttar Pradesh (2015) 7 SCC 178, it observed that a prosecution in possession of the best evidence — in that case CCTV footage, here a tape recording — is obliged to produce it. Withholding material electronic or recorded evidence without justification invites an adverse inference under Section 114 Illustration (g) of the Evidence Act. The tape recording could have conclusively established which persons were actually present at the 10 January 1995 meeting where the demand was alleged to have been made. Its suppression without explanation weighed against the prosecution.

Double Presumption of Innocence and Limits of Article 136

The Court addressed the standard of interference in appeals against acquittal. Citing Chandrappa v. State of Karnataka (2007) 4 SCC 415, it noted that where two reasonable conclusions are possible on the evidence, an appellate court ought not to disturb a finding of acquittal. An accused who has been acquitted carries the benefit of a double presumption of innocence — first as the fundamental presumption in criminal jurisprudence, and second by virtue of the acquittal itself reinforcing that presumption.

Under Article 136 of the Constitution, the Court does not ordinarily interfere with an order of acquittal unless the findings are manifestly illegal, perverse, or result in a miscarriage of justice. Citing State of Rajasthan v. Abdul Mannan (2011) 8 SCC 65 and Hakeem Khan v. State of M.P. (2017) 5 SCC 719, the Court held that a view which can reasonably be formed on the evidence record cannot be interdicted merely because a higher court might disagree. The High Court had meticulously re-appreciated the entire evidence and assigned cogent reasons. Its view was a plausible one arising from the available record. No exceptional circumstance warranting interference under Article 136 was made out.

Order

The Supreme Court dismissed Criminal Appeal Nos. 3383-3385 of 2025 filed by the State of Uttar Pradesh. The impugned judgment and order of the Allahabad High Court, Lucknow Bench dated 27 May 2019, acquitting A.K. Gaba, Alok Gupta, and Dushyant Kumar, was confirmed. All pending applications, if any, were disposed of.