Supreme Court overturns conviction under Prevention of Corruption Act and IPC Section 477A: Shiv Kumar Sharma vs. State of Rajasthan (28 July 2022)

Date of the Judgment: 28 July 2022
Citation: 2022 INSC 618
Judges: B.R. Gavai, J. and Pamidighantam Sri Narasimha, J.
Can a public servant be convicted for corruption and falsification of accounts without concrete evidence of intent to defraud? The Supreme Court of India recently addressed this question in the case of *Shiv Kumar Sharma v. State of Rajasthan*. The Court overturned the conviction of the appellant, who was charged under the Prevention of Corruption Act, 1988, and Section 477A of the Indian Penal Code, 1860, finding a lack of evidence to support the charges. The judgment was delivered by a bench comprising Justices B.R. Gavai and Pamidighantam Sri Narasimha, with Justice B.R. Gavai authoring the opinion.

Case Background

The case originated from allegations of malpractices in the construction of rooms and verandas in two primary schools, Mankot and Surjanpur. The appellant, Shiv Kumar Sharma, a public servant, was accused of conspiring with Bhagwan Sahai, a co-accused, to receive advance payments for the construction work. It was alleged that Sharma manipulated records to show inflated expenditures, causing wrongful loss to the State Government and wrongful gain to himself.

Specifically, the prosecution alleged that for the Mankot school project, an advance of Rs. 15,000 was received against an approved amount of Rs. 91,500. The expenditure was initially recorded as Rs. 34,580.13, which was later reduced to Rs. 25,911 after a complaint was filed. Similarly, for the Surjanpur school project, an advance of Rs. 28,000 was received against an approved amount of Rs. 80,000. The expenditure was initially recorded as Rs. 68,776, and later reduced to Rs. 45,582 after a complaint was made. The prosecution contended that the actual work done was worth only Rs. 25,911 at Mankot and Rs. 28,264.42 at Surjanpur, leading to an excess payment of Rs. 22,353.

Timeline

Course of Proceedings

The Special Judge, Prevention of Corruption Act No. 1, Jaipur, found Shiv Kumar Sharma guilty of offences under Section 13(1)(d)(ii) read with Section 15 of the Prevention of Corruption Act, 1988, and Section 477A of the Indian Penal Code, 1860. He was sentenced to rigorous imprisonment for one year and a fine of Rs. 5000 for each offence.

Sharma appealed to the High Court of Judicature for Rajasthan at Jaipur, which dismissed his appeal and upheld the Special Judge’s decision. Subsequently, Sharma appealed to the Supreme Court of India, challenging the concurrent findings of the lower courts.

Legal Framework

The case primarily revolves around the interpretation and application of the following legal provisions:

• Section 13(1)(d)(ii) of the Prevention of Corruption Act, 1988: This section deals with criminal misconduct by a public servant. It states that a public servant is said to commit the offence of criminal misconduct, if he, “by corrupt or illegal means or by otherwise abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.”
• Section 15 of the Prevention of Corruption Act, 1988: This section specifies the punishments for offences under the Act.
• Section 477A of the Indian Penal Code, 1860: This section pertains to falsification of accounts. It states, “Whoever, being a clerk, officer or servant, or employed or acting in the capacity of a clerk, officer or servant, wilfully, and with intent to defraud, destroys, alters, mutilates or falsifies any book, electronic record, paper, writing, or valuable security which belongs to, or is in the possession of, his employer, or has been received by him for or on behalf of his employer, or wilfully, and with intent to defraud, makes or abets the making of any false entry in, or omits or alters or abets the omission or alteration of any material particular from or in, any such book, electronic record, paper, writing or valuable security, shall be punished with imprisonment of either description for a term which may extend to seven years, or with fine, or with both.”

Arguments

Appellant’s Arguments:

• The appellant’s counsel, Mr. Ritesh Agrawal, argued that the High Court and the Trial Court failed to give due weightage to the evidence of PW-8 Mr. Mahesh Prasad Mathur (Inquiry Officer) and PW-14 Jai Bhagwan (Investigating Officer).
• He contended that there was no evidence to show that the appellant had demanded or obtained any valuable thing or pecuniary advantage by abusing his position as a public servant.
• He submitted that, for an offence under Section 477A of the IPC, the prosecution must establish that the alleged act was willful and with an intent to defraud, which was not proven in this case.
• The appellant’s counsel argued that the corrections made in the records were not proven to be done after the complaint.
• He also highlighted that the payments for construction material were directly made to the Gram Sewak by the Panchayat Samiti, and the appellant was not aware of the amounts.
• The appellant’s counsel pointed out that the Investigating Officer himself had not found any criminal charges against the appellant in his investigation report and had only recommended a departmental inquiry.

Respondent’s Arguments:

• Dr. Manish Singhvi, the Additional Advocate General for the State of Rajasthan, argued that the scope of interference in concurrent findings of fact is very limited.
• He submitted that the Trial Court and the High Court correctly appreciated the evidence and found that the appellant had manipulated the records with dishonest intent.
• The respondent argued that the appellant manipulated the records to save himself after a complaint was made to higher authorities, which falls under Section 477A of the IPC.

Summary of Arguments

Issues Framed by the Supreme Court

The Supreme Court considered the following issues:

1. Whether the conviction of the appellant under Section 13(1)(d)(ii) read with Section 15 of the Prevention of Corruption Act, 1988, is sustainable?
2. Whether the conviction of the appellant under Section 477A of the Indian Penal Code, 1860, is sustainable?

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

Treatment of Submissions

Treatment of Authorities

The Supreme Court used the cited authorities to establish the principles for interference under Article 136 of the Constitution and to emphasize that concurrent findings of fact can be interfered with if they are perverse or based on no evidence. The Court relied on *Mahesh Dattatray Thirthkar vs State of Maharashtra* to lay down the principles for exercising powers under Article 136 and interfering with findings of fact. The Court also relied on *H.P. Admn. v. Om Prakash*, *Arunachalam v. P.S.R. Sadhanantham*, *State of U.P. v. Babul Nath*, *Pattakkal Kunhikoya v. Thoopiyakkal Koya*, and *Mithilesh Kumari v. Prem Behari Khare* to reiterate the conditions under which the Supreme Court can interfere with findings of fact. Further, the Court relied on *Ashoksinh Jayendrasinh vs. State of Gujarat* to state that the court can re-appreciate the oral evidence if the High Court fails to appreciate it correctly.

What Weighed in the Mind of the Court?

The Supreme Court’s decision was primarily influenced by the lack of concrete evidence to support the charges against the appellant. The Court emphasized that for a conviction under Section 13(1)(d)(ii) of the PC Act, it is necessary to establish that the public servant attempted to obtain a pecuniary advantage, which was not proven in this case. Similarly, for a conviction under Section 477A of the IPC, the prosecution must prove that the false entries were made willfully with an intent to defraud, which was also not established. The Court also gave significant weight to the fact that the Inquiry Officer (PW8) found the measurements recorded by the appellant to be correct and that the Investigating Officer (PW14) had not found any criminal intent on the part of the appellant.

Sentiment Analysis of Reasons

Fact:Law Ratio

Logical Reasoning

The Supreme Court found that the lower courts had ignored vital aspects of the evidence and that the prosecution had failed to establish the necessary elements for convictions under both the Prevention of Corruption Act and the Indian Penal Code. The Court noted that the measurements recorded by the appellant were found to be correct by the Inquiry Officer and that there was no evidence to show that the appellant had any role in either approving or making the payments. The Court emphasized that the act of the appellant could be termed as irregular, but there was nothing on record to show that such irregularities were committed willfully with an intent to defraud.

The Court stated that:

“For an offence punishable under Section 13(1)(d)(ii) read with Section 15 of the PC Act, it is necessary to establish that a public servant has attempted to obtain for himself or for any other person any valuable thing or pecuniary advantage. In the present case, no such material has come on record.”

and

“For a conviction under Section 477A of the IPC, it is necessary for the prosecution to establish that the making of false entry or omission or alternation of such entries has been done willfully with an intent to defraud. No such material has been placed on record by the prosecution.”

The Court also observed that:

“The evidence of PW8-Mahesh Prasad Mathur would clearly show that at the most, the act of the appellant could be termed as irregular. However, there was nothing on record to show that such irregularities were committed willfully with an intent to defraud.”

The Court concluded that the concurrent findings of the lower courts were perverse due to the ignoring of vital evidence and admissions, and thus, the convictions were not sustainable.

Key Takeaways

• Public servants cannot be convicted under the Prevention of Corruption Act, 1988, without concrete evidence of attempting to obtain a pecuniary advantage.
• Conviction under Section 477A of the Indian Penal Code, 1860, requires proof of willful intent to defraud, not just irregularities in record-keeping.
• Courts must give due weightage to all the evidence presented, including the testimonies of inquiry officers and investigating officers.
• Concurrent findings of fact can be interfered with if they are found to be perverse or based on no evidence.
• This judgment emphasizes the importance of proving criminal intent beyond a reasonable doubt in cases involving corruption and falsification of accounts.

Directions

The Supreme Court allowed the appeal, quashed the order of conviction and sentence recorded by the Special Judge and confirmed by the High Court, and acquitted the appellant of all charges. The bail bonds were discharged.

Specific Amendments Analysis

There is no specific amendment discussed in this judgment.

Development of Law

The ratio decidendi of this case is that mere irregularities in record-keeping by a public servant are not sufficient for conviction under Section 13(1)(d)(ii) of the Prevention of Corruption Act, 1988, or Section 477A of the Indian Penal Code, 1860. The prosecution must prove beyond a reasonable doubt that the public servant attempted to obtain a pecuniary advantage or acted with a willful intent to defraud. This judgment reinforces the principle that the prosecution must establish criminal intent and not merely rely on procedural irregularities. This case clarifies the evidentiary standards required for convictions under the Prevention of Corruption Act and the Indian Penal Code, emphasizing the need for concrete proof of criminal intent and pecuniary gain, rather than mere irregularities in record-keeping.

Conclusion

In *Shiv Kumar Sharma v. State of Rajasthan*, the Supreme Court overturned the conviction of the appellant, a public servant, under the Prevention of Corruption Act, 1988, and Section 477A of the Indian Penal Code, 1860. The Court found that the prosecution failed to provide sufficient evidence to establish the necessary elements of the offences, particularly the lack of proof of criminal intent and pecuniary gain. The judgment highlights the importance of concrete evidence in corruption cases and the need for courts to carefully consider all evidence, including the testimonies of inquiry and investigating officers. This case serves as a reminder that mere irregularities are not enough for a conviction; the prosecution must prove criminal intent beyond a reasonable doubt.

Category

• Prevention of Corruption Act, 1988
  • Section 13(1)(d)(ii), Prevention of Corruption Act, 1988
  • Section 15, Prevention of Corruption Act, 1988
• Indian Penal Code, 1860
  • Section 477A, Indian Penal Code, 1860
• Criminal Law
  • Corruption
  • Falsification of Accounts
  • Criminal Intent
• Supreme Court Judgments
  • Criminal Appeals

FAQ

Q: What was the main issue in the Shiv Kumar Sharma v. State of Rajasthan case?

A: The main issue was whether a public servant could be convicted under the Prevention of Corruption Act, 1988, and Section 477A of the Indian Penal Code, 1860, based on alleged irregularities in record-keeping without proof of criminal intent or pecuniary gain.

Q: What did the Supreme Court decide in this case?

A: The Supreme Court overturned the conviction of the appellant, holding that the prosecution failed to provide sufficient evidence to establish the necessary elements of the offences, particularly the lack of proof of criminal intent and pecuniary gain.

Q: What is Section 13(1)(d)(ii) of the Prevention of Corruption Act, 1988?

A: Section 13(1)(d)(ii) of the Prevention of Corruption Act, 1988, deals with criminal misconduct by a public servant who, by corrupt or illegal means, obtains for himself or any other person any valuable thing or pecuniary advantage.

Q: What is Section 477A of the Indian Penal Code, 1860?

A: Section 477A of the Indian Penal Code, 1860, deals with the falsification of accounts by a clerk, officer, or servant with the intent to defraud.

Q: What are the key takeaways from this judgment?

A: The key takeaways are that mere irregularities in record-keeping are not sufficient for a conviction under the Prevention of Corruption Act or Section 477A of the IPC. The prosecution must prove criminal intent and pecuniary gain beyond a reasonable doubt. Courts must also give due weightage to all evidence presented, including the testimonies of inquiry and investigating officers.

Q: What is the significance of the court’s emphasis on “intent to defraud” under Section 477A of the IPC?

A: The court’s emphasis on “intent to defraud” highlights that mere errors or discrepancies in accounts are not enough for a conviction under Section 477A. The prosecution must prove that the accused acted willfully with the specific intention to deceive or cause financial loss.