Questions and answers on law (Part 86)

Q :-  Whether Sanction for all offences  under corruption  act is required , for which offences  sanction is not required? How sanction for prosecution in proved in cases under prevention of corruption act

Ans:- 1) Is sanction required for all PC Act offences?

No. Sanction under Section 19 PC Act is required only when the accused is a “public servant” and the court is taking cognizance of specified PC Act offences (bribery/criminal misconduct etc.) and the person is still covered as a public servant at the relevant time.

2) For which situations/offences sanction is not required?

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

 A recent Supreme Court ruling in Dileepbhai Nanubhai Sanghani v. State of Gujarat, citation 2025 INSC 280 dated May 14, 2025.clarifies when corruption charges can stick, protecting public servants from prosecutions based solely on procedural lapses

The Supreme Court of India has delivered a significant judgment that could reshape how corruption cases are prosecuted across the country. In a ruling that favors former Gujarat Fisheries Minister Dileepbhai Nanubhai Sanghani, the apex court has established clear guidelines on what constitutes sufficient evidence for corruption charges under the Prevention of Corruption Act, 1988.

The Case That Started It All

The controversy began when Sanghani, during his tenure as Gujarat's Fisheries Minister, allegedly allocated fishing contracts for state reservoirs without following the mandatory tendering process. A fish trader filed a complaint, claiming this deviation from government policy caused substantial losses to the state treasury. The former minister found himself facing serious charges under multiple sections of the Prevention of Corruption Act, including allegations of criminal misconduct and abuse of official position.

What seemed like a straightforward case of administrative irregularity, however, would evolve into a landmark legal precedent that distinguishes between mere policy violations and actual corruption.

The Legal Battle Unfolds

The case centered on a fundamental question that has implications far beyond Gujarat's fishing industry: Can corruption charges be sustained based purely on allegations of misuse of authority, or must there be concrete evidence of bribery?

Sanghani's legal team argued that the charges were based on unfounded allegations without any proof of demand or acceptance of illegal gratification. The prosecution, meanwhile, contended that the deviation from tendering procedures itself constituted corruption, regardless of whether money changed hands.

Supreme Court's Game-Changing Verdict

On February 27, 2025, a bench comprising Justice Sudhanshu Dhulia and Justice K Vinod Chandran delivered a judgment that could protect countless public servants from frivolous corruption charges. The Court's ruling was unambiguous: "The presumption under Section 20 of the Act cannot arise on the mere allegation of a demand and acceptance of illegal gratification."

The judges emphasized that proof of demand and acceptance of illegal gratification by a public servant is absolutely essential (sine qua non) to establish guilt under the corruption law. This means that administrative irregularities or policy deviations, by themselves, cannot sustain corruption charges without concrete evidence of bribery.

Examining the Evidence

The Supreme Court's analysis revealed the weakness in the prosecution's case. The investigation report contained only allegations of authority misuse without any evidence of financial impropriety. As the Court noted: "The only charge is with respect to misuse of authority which does not come under the provisions of the Prevention of Corruption Act and none of the ingredients regarding demand or obtaining or acceptance of bribe or any illegal gratification has come out."

Interestingly, the Court found that the contracts were granted to benefit the 'Padhar Adivasi' community, following a policy approved by both the Cabinet and Chief Minister. Upon examining the 2004 policy framework, the judges discovered that tendering was mandatory only for reservoirs outside tribal areas, with specific provisions allowing relaxations for tribal communities and societies.

Building on Strong Legal Foundation

The judgment didn't emerge in a vacuum. The Supreme Court relied heavily on the authoritative five-judge Constitution bench decision in Neeraj Dutta v. State (NCT of Delhi) 2022 SCC OnLine SC 1724,Decided on December 15, 2022 which had already established that proof of demand and acceptance of illegal gratification is essential for corruption offenses.

This legal foundation provided the Court with the precedential support needed to make such a significant ruling, ensuring that the decision aligns with established constitutional principles.

What This Means for India's Anti-Corruption Framework

The implications of this judgment extend far beyond one minister's legal troubles. The ruling creates several important safeguards:

Protection Against Frivolous Prosecutions: Public servants can no longer be charged with corruption based solely on administrative decisions that may be questioned in hindsight.

Clear Evidentiary Standards: The judgment establishes that corruption prosecution requires concrete evidence of bribery, not mere allegations of procedural irregularities.

Distinction Between Administrative and Criminal Matters: The Court has drawn a clear line between administrative failures (which may warrant disciplinary action) and criminal corruption (which requires proof of illegal gratification).

The Broader Impact

Legal experts suggest this judgment could significantly impact pending corruption cases across India's courts. Many cases currently rely on allegations of misuse of authority without concrete evidence of bribery. This ruling may lead to a review of such prosecutions and potentially result in the quashing of cases that don't meet the newly clarified evidentiary threshold.

The judgment also reinforces the principle that India's criminal justice system requires concrete evidence rather than suspicion or inference when dealing with serious charges like corruption.

Looking Forward

The Sanghani judgment represents a mature understanding of corruption law that balances the need to fight graft with the protection of public servants who make difficult administrative decisions. By requiring concrete evidence of bribery rather than accepting mere policy deviations as proof of corruption, the Supreme Court has strengthened both the rule of law and the integrity of anti-corruption enforcement.

This ruling sends a clear message: India's courts will not tolerate corruption, but they will also not allow the prevention of corruption law to become a tool for harassment based on administrative disagreements. The scales of justice, it seems, have found their proper balance.

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Whether money seized from bribe giver can be treated as tainted money for the purpose of Prevention of money laundering Act?

 It is true that so long as the amount is in the hands of a bribe giver, and till it does not get impressed with the requisite intent and is actually handed over as a bribe, it would definitely be untainted money. If the money is handed over without such intent, it would be a mere entrustment. If it is thereafter appropriated by the public servant, the offence would be of misappropriation or species thereof but certainly not of bribe. The crucial part therefore is the requisite intent to hand over the amount as bribe and normally such intent must necessarily be antecedent or prior to the moment the amount is handed over. Thus, the requisite intent would always be at the core before the amount is handed over. Such intent having been entertained well before the amount is actually handed over, the person concerned would certainly be involved in the process or activity connected with "proceeds of crime" including inter alia, the aspects of possession or acquisition thereof. By handing over money with the intent of giving bribe, such person will be assisting or will knowingly be a party to an activity connected with the proceeds of crime. Without such active participation on part of the person concerned, the money would not assume the character of being proceeds of crime. The relevant expressions from Section 3 of the PML Act are thus wide enough to cover the role played by such person. {Part 16}

17. On a bare perusal of the complaint made by the Enforcement Directorate, it is quite clear that the Respondent was prima facie involved in the activity connected with the proceeds of crime.

18. The view taken by the High Court that the Respondent cannot be held liable for the offence under the PML Act is thus completely incorrect.

19. The observations made by us regarding involvement of the Respondent are prima facie in nature and for considering whether the allegations made by the prosecution if accepted to be true at this stage, would make out an offence or not. Needless to say that, on facts, the matter shall be considered purely on merits at the appropriate stage(s).

IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 1864 of 2022 (Arising out of SLP (Crl.) No. 2668 of 2022)

Decided On: 31.10.2022

Directorate of Enforcement Vs. Padmanabhan Kishore

Hon'ble Judges/Coram:

U.U. Lalit, C.J.I. and Bela M. Trivedi, J.

Author: U.U. Lalit, C.J.I.

Citation:  2022/INSC/1143,MANU/SC/1412/2022.

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Whether receipt Of a Bribe Is An Act Of Money Laundering and whether ED can initiate prosecution based on FIR in a Corruption case?

 Question 1: Whether without identifying the proceeds of crime or a property representing the proceeds of crime and without identifying any process or activity connected to proceeds of crime as required by Section 3, which constitute the foundational/jurisdictional fact, ED can initiate an investigation and issue summons?

93. The common theme of the song of the learned counsel for the accused is that the mere registration of a FIR for a predicate offence, even if it is a scheduled offence, is not sufficient for the ED to register an Information Report and summon anyone. According to the learned counsel, the commission of the scheduled offence should have generated proceeds of crime and those proceeds of crime should have been laundered by someone, for the ED to step in. Going a step further, it was contended by the learned senior counsel that the ED should first identify some property as representing the proceeds of crime, before an Information Report is registered and a summon issued under Section 50(2).

94. These contentions, in our opinion, if accepted, would amount to putting the cart before the horse. Unfortunately for the accused, this is not the scheme of the Act.

95. Section 3 of the Act which defines the offence of money-laundering reads as follows:

“3. Offence of money-laundering.—Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime including its concealment, possession, acquisition or use and projecting or claiming it as untainted property shall be

guilty of offence of money-laundering.

Explanation.—For the removal of doubts, it is hereby clarified that,—

(i) a person shall be guilty of offence of money-laundering if such person is found to have directly or indirectly attempted to indulge or knowingly assisted or knowingly is a party or is actually involved in one or more of the following processes or activities connected with proceeds of crime, namely:—

(a) concealment; or

(b) possession; or

(c) acquisition; or

(d) use; or

(e) projecting as untainted property; or

(f) claiming as untainted property,

in any manner whatsoever;

(ii) the process or activity connected with proceeds of crime is a continuing activity and continues till such time a person is directly or indirectly enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property in any manner whatsoever.”

96. If the main part of Section 3 is dissected with forensic precision, it will be clear that Section 3 addresses itself to three things (we may call them 3 ‘P’s) namely, (i) person; (ii) process or activity; and (iii) product. Insofar as persons covered by Section 3 are concerned, they are, (i) those who directly or indirectly attempt to indulge; or (ii) those who knowingly assists; or (iii) those who are knowingly a party; or (iv) those who are actually involved. Insofar as process is concerned, the Section identifies six different activities, namely (i) concealment; (ii) possession; (iii) acquisition; (iv) use; (v) projecting; or (vi) claiming as untainted property, any one of which is sufficient to constitute the offence. Insofar as product is concerned, Section 3 identifies “proceeds of crime” or the property representing the proceeds of crime as the product of the process or activity.

97. Out of the three things that Section 3 addresses, namely (i) person; (ii) process; and (iii) product, the first two do not require any interpretation or definition. The third aspect namely “product”, which Section 3 refers to as “proceeds of crime” requires a definition and hence it is defined in Section 2(1)(u) as follows:-

“2. Definitions. — (1) In this Act, unless the context otherwise requires, —

xxx xxx xxx

(u) “proceeds of crime” means any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad;

Explanation.—For the removal of doubts, it is hereby clarified that "proceeds of crime" including property not only derived or obtained from the scheduled offence but also any property which may directly or indirectly be derived or obtained as a result of any criminal activity relatable to the scheduled offence;”

98. Keeping in mind these essential elements that make up the molecular structure of Section 3, if we go back to the case on hand, we will find (i) that the offences under Sections 120B, 419, 420, 467 and 471 IPC are scheduled offences included in paragraph 1 of the Schedule; and (ii) that the offences under Sections 7 and 13 of the PC Act are included in paragraph 8 of the Schedule.

99. All the three FIRs allege that the accused herein had committed offences included in the Schedule by taking illegal gratification for providing appointment to several persons in the Public Transport Corporation. In one case it is alleged that a sum of more than Rs.2 crores had been collected and in another case a sum of Rs.95 lakhs had been collected. It is this bribe money that constitutes the ‘proceeds of crime’ within the meaning of Section 2(1)(u). It is no rocket science to know that a public servant receiving illegal gratification is in possession of proceeds of crime. The argument that the mere generation of proceeds of crime is not sufficient to constitute the offence of money-laundering, is actually preposterous. As we could see from Section 3, there are six processes or activities identified therein. They are, (i) concealment; (ii) possession; (iii) acquisition; (iv) use; (v) projecting as untainted property; and (vi) claiming as untainted property. If a person takes a bribe, he acquires proceeds of crime. So, the activity of “acquisition” takes place. Even if he does not retain it but “uses” it, he will be guilty of the offence of money-laundering, since “use” is one of the six activities mentioned in Section 3.

100. The FIRs for the predicate offences identify all the three components of Section 3, namely, (i) persons; (ii) process; and

(iii) product. Persons accused in the FIRs are those who have indulged in the process or activity. The illegal gratification that they have taken, represents the proceeds of crime. The (i) acquisition of such illegal gratification in the first instance; (ii) the possession of the tainted money before putting it to use; and (iii) today projecting it as untainted money, is the process or activity in which the accused have indulged. The corruption money represents the proceeds of crime.

101. Therefore, all the arguments as though there are no foundational facts or jurisdictional facts, are simply aimed at hoodwinking the Court.

102. It is true that there are some offences, which, though scheduled offences, may or may not generate proceeds of crime. For instance, the offence of murder punishable under Section 302 is a scheduled offence. Unless it is a murder for gain or murder by a hired assassin, the same may or may not generate proceeds of crime. It is in respect of such types of offences that one may possibly argue that mere commission of the crime is not sufficient but the generation of proceeds of crime is necessary. In the case of an offence of corruption, the criminal activity and the generation of the proceeds of crime are like Siamese twins.

REPORTABLE

IN THE SUPREME COURT OF INDIA

CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NOS. OF 2023

Y. BALAJI VsKARTHIK DESARI & ANR. 

Author: V. Ramasubramanian, J.

Dated: MAY 16, 2023

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When parties can approach court even in presence of arbitration agreement?

Arbitration is increasing method of dispute resolution. With increasing number of cross border transactions and international trade contracts, arbitrability of arbitration agreements now holds a prominent place in resolution of international and domestic arbitrations.

In India, traditionally the parties move to court when the the dispute relating to an arbitration agreement arises

The Golden Rule is that if the dispute is covered by an Arbitration agreement, the said dispute should be resolved by Arbitration. However, there are following exceptions to this Rule. 
 1. If a party institute an action in the Court in respect of a dispute, which is covered by an arbitration agreement, the Court may continue with the said action if the other party doesn't object to the Court's jurisdiction.
2. If there is an immediate urgency, the Court may hear the case. (Textile v Hydro Industries)
3. If the dispute is in respect of Oppression and Mismanagement under the Company law, the Court may hear the action.
4. The Court may hear disputes in respect of unjust enrichment and compensation for improvements.
5. The Court may also hear disputes which are not covered under the Agreement and the Arbitration Clause.
6. The Court may hear disputes if non parties to arbitration agreement are involved.
7. The Court should hear dispute if dispute arising out of arbitration agreement in criminal in nature.
8. The Court should hear if dispute is relating to status such as divorce, judicial separation, restitution of conjugal rights, child custody etc.
9. The Court should hear dispute if it is relating to competition law, insolvency, winding up, bribery, corruption
10. The Court should hear dispute if it is relating to   guardianship matters.
11. The Court should hear dispute if it is relating to testamentary matters.
12. The Court should hear dispute if it is disputes relating to trust.

Points 1-5 have been contributed by Mr. Yasith Hirimburegama, Lawyer based in Sri Lanka. 

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Whether False allegation of bribery against Judge amounts to contempt of court?

This Court also made similar observations in Smt. Munni Devi and others v. State of U.P. and others, MANU/UP/2869/2012 : 2013 (2) AWC 1546 and in para 10, said:

"10. Be that as it may, so far as the present case is concerned, suffice is to mention that the Constitution makers have imposed constitutional obligation upon the High Court to exercise control over subordinate judiciary. This control is both ways. No aberration shall be allowed to enter the Subordinate Judiciary so that its purity is maintained. Simultaneously Subordinate Judiciary can not be allowed to be attacked or threatened to work under outside pressure of anyone, whether individual or a group, so as to form a threat to objective and independent functioning of Subordinate Judiciary."

62. Criticism of an order of a Court cannot be equated with making scurrilous attack on the conduct and integrity of the Judicial Officer/Presiding Officer of the Court. In the present case, an open allegation of bribe has been levelled against Judicial Officer(s).

63. Wild imaginary allegations against conduct of Judicial Officer without having any material to substantiate the same cannot be tolerated, inasmuch as, it not only brings into disrepute the entire justice system but is likely to cause serious erosion in the confidence of public in case such tendency is not snipped at the earliest. The Judicial Officer/Judges had no platform to stand and clarify the circumstances in which order has been passed by them. They had no platform to defend themselves. The strength of judiciary comes from the strong public opinion which it has in the system. If unsubstantiated flimsy imaginary fanciful allegations are made by a party, who did not find an order in its favour, it will demolish the very foundation of the system of justice. Every order passed by Court will be in favour of one of the party and against another. The losing party cannot be allowed to challenge the very integrity of Judicial Officer in passing an order and that too without any material to support such a allegation. If we allow such a trend to remain unnoticed, or condone the same without any appropriate action, it will not only encourage such tendency amongst other and but also resultant situation may cause a serious blow to the system of administration of justice, which is one of the founding pillar of constitutional scheme and has to be protected by all legal and reasonable means.

IN THE HIGH COURT OF ALLAHABAD

Contempt Application (Criminal) No. 20 of 2011

Decided On: 08.12.2015

In Re: K.K. Mishra

Hon'ble Judges/Coram:Sudhir Agarwal and S.B. Singh, JJ.

Citation:2016 CRLJ3861 ALL

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How to appreciate evidence of trap witness in bribery case?

   In  MO  Shamshuddin  (supra),  the  Court,  after  referring  to  the
decisions in DPP V. Hester[17] and DPP V. Kilbourne[18], made a  distinction
between accomplice and an interested witness.  The Court,  referred  to  the
authority in Basawan Singh (supra) at length and eventually adverted to  the
concept of corroborating evidence.  In that context it has been ruled thus:
".......Now  coming  to  the  nature  of  corroborating  evidence  that   is
required, it is well-settled that the corroborating evidence can be even  by
way of circumstantial evidence. No  general  rule  can  be  laid  down  with
respect to [pic]quantum of evidence corroborating the testimony  of  a  trap
witness which again would depend upon its own facts and  circumstances  like
the nature of the crime, the  character  of  trap  witness  etc.  and  other
general requirements necessary to sustain the conviction in that  case.  The
court should weigh the  evidence  and  then  see  whether  corroboration  is
necessary. Therefore as a rule of law  it  cannot  be  laid  down  that  the
evidence of every complainant in a bribery case should  be  corroborated  in
all material particulars and otherwise it  cannot  be  acted  upon.  Whether
corroboration is necessary and if so to what extent and what should  be  its
nature depends upon the facts and circumstances of each case. In a  case  of
bribe, the person who pays the bribe and those  who  act  as  intermediaries
are the only persons who can ordinarily be expected to give  evidence  about
the bribe and it is not possible  to  get  absolutely  independent  evidence
about the payment of bribe."

From the aforesaid authorities it  is  clear  that  a  trap  witness  is  an
interested witness and  his  testimony,  to  be  accepted  and  relied  upon
requires corroboration and the corroboration would  depend  upon  the  facts
and circumstances, nature of  the  crime  and  the  character  of  the  trap witness. 
IN THE SUPREME COURT OF INDIA
 CRIMINAL APPELLATE JURISDICTION
  CRIMINAL APPEAL NO. 554 OF 2012

Vinod Kumar                                  ... Appellant
                                   Versus
State of Punjab                         ... Respondent
Citation;2015 ALLSCR900,AIR2015SC1206,2015CriLJ1442,(2015)3SCC220
Read original judgment here;click here

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Whether pre arrest bail of middleman in bribery can be rejected even though main accused is released on bail?

I   have   already   noted   that   there   is   a 
telephonic  conversation which, at  this  stage, discloses 
that the applicant had acted in the whole case with an 
intention to be a middle man between the Income Tax 

Officer Nanoti and the complainant Dr. Sadanand Ingle 
and this itself would be sufficient at this this stage to 
prima facie hold that there was a criminal agreement 
between   applicant   and   said   Nanoti   to   commit   an 
offence.     At   this   stage,   it   does   not   appear   that   said 
recorded   conversation   could   be   looked   at   as   a   mere 
statement of one accused against another.  It is, prima 

facie,   more   than   that   and   is   in   nature   of   implicit 
criminal agreement indicating prior meeting of minds. 
If,   this   is   so,   investigation   into   nature   and   extent   of 
complicity   of   applicant   in   the   whole   case   would   be 
necessary.   It is true that main co­conspirator, Nanoti, 
the Income Tax Officer, has been released on bail but 
that would not entitle the applicant to claim parity as 
the applicant appears to have played more active role in 
an attempt to collect bribe money, which may require 
custodial   interrogation   of   the   applicant.   The   offences 
are of serious nature and there are also allegations that 
the applicant was acting as a middleman for collecting 
bribe amount on behalf of the Income Tax Officers for 
last some years.  Such allegations would always require 
proper   investigation   by   the   investigating   agency   and 
more so in present times when corruption has assumed 

the   form   of   a   stubborn   disease   afflicting   the   Society, 
which refuses to leave it.  Remedy to such a decease is 
found   only   when   thorough   clinical   and   pathological 
investigation is made.  In the instant case, the offences 
are   of   such   a   nature   that   they   require   not   only 
recording of statements of witnesses but also examining 
documents, bank details and making of further seizures 

of incriminating material and, therefore, if the applicant 
is   granted  pre­arrest  bail,  there  is  a  possibility   of   the 
applicant influencing the investigation process as well 
as tampering  with the evidence.   On  the  basis of  the 
Call   Details   Report,   as   placed   before   me   by   the 
investigating   agency,   it   could   be   seen   that   there   was 
some data, which was not found stored in two mobile 
phones at the time of their seizure by the Investigating 
Officer and this data, it is prima facie seen, was relevant 
from   the   view   point   of   effective   investigation   in   this 
case.  Therefore, by following the guidelines laid down 
by   the   Hon'ble   Apex   Court   in   the   case   of  Siddharam 
(supra),   I   find   that   custody   of   applicant   may   be 
necessary for proper and effective investigation, which 
is one of the imperatives of Section 41(1)(b)(ii)(b) of 
the Code of Criminal Procedure, 1973, and thus this is 

   
not   a   fit   case   for   granting   pre­arrest   bail   to   the 
applicant.  For the same reasons, I find that there being 
sufficient   prima   facie   evidence   against   the   applicant 
regarding   his   being   party   to   criminal   agreement,     he 
cannot seek any help from the  law laid down  by the 
Hon'ble Apex Court in the case of  Jayendra Sarsawathi 
(supra).   The   application,   therefore,   deserves   to   be 
Accordingly, the application stands rejected.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH AT NAGPUR
CRIMINAL APPLICATION (ABA) NO. 522 OF 2013
   
(Rajendrakumar Brijkishore Jaiswal Vs. Central Bureau of Investivation, ACB, Nagpur)
­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­­ ­ ­ ­ 

CORAM :  S. B. SHUKRE, J.
DATED  :  25 OCT., 2013
pre-­arrest   bail   under   Section   438   of   the   Criminal 
Procedure Code.
Citation; 2014 ALLMR(cri)2285

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