“Demand First” Doctrine Under the Prevention of Corruption Act: Revisiting the Scope of the Section 20 Presumption

Introduction

The Supreme Court’s decision in State of Lokayuktha Police, Davanagere v. C B Nagaraj (2025 INSC 736) adds fresh contours to anti-corruption jurisprudence by unequivocally reaffirming that the statutory presumption under Section 20 of the Prevention of Corruption Act, 1988 (“PC Act”) becomes operational only after the prosecution proves—beyond reasonable doubt—the foundational fact of demand for illegal gratification. The Court dismissed the State’s appeal, upheld the High Court’s acquittal, and in the process clarified:

Merely establishing acceptance and recovery of tainted money does not suffice; demand must be specifically proved.
An unreliable or contradictory testimony of the complainant cannot sustain a conviction.
Appellate courts may decline to interfere with an acquittal if the chain of demand-acceptance-recovery is broken.

The ruling has ramifications for investigative agencies, trial courts, and appellate courts alike, compelling them to focus sharply on evidence of demand to invoke Section 20’s reverse onus.

Summary of the Judgment

The respondent-accused, an Extension Officer in the Taluka Panchayat, was alleged to have demanded and accepted a bribe of ₹1,500 for forwarding a spot-inspection report needed for a caste validity certificate. The trial court convicted him under Sections 7 and 13(1)(d) read with Section 13(2) of the PC Act. On appeal, the High Court acquitted the respondent, finding the prosecution’s evidence on demand unreliable. The State, through the Lokayuktha Police, approached the Supreme Court.

The Supreme Court, per Amanullah J., held:

The complainant’s testimony was inconsistent and contradicted by documentary evidence (Exhibit D8 – the spot-inspection report already forwarded).
Independent witness (PW-2) gave an equivocal account of demand; thus corroboration of demand was missing.
Because demand was doubtful, Section 20’s presumption could not be invoked; acceptance and recovery alone were insufficient.
The High Court’s acquittal, though not elaborately reasoned, was not perverse; therefore, no interference was warranted.

Analysis

Precedents Cited and Their Influence

State of Karnataka v. Chandrasha, 2024 SCC OnLine SC 3469
- Relied on by the appellant for the proposition that once acceptance is proved, Section 20 presumption arises.
- The Supreme Court distinguished Chandrasha, emphasising that Chandrasha presupposes proof of demand.
Union of India v. Purnandu Biswas (2005) 12 SCC 576 & T. Subramanian v. State Of T.N. (2006) 1 SCC 401
- Quoted to reiterate that demand is sine qua non for Section 20 presumption.
Om Parkash v. State Of Haryana (2006) 2 SCC 250
- Re-affirmed that in the absence of proved demand, Section 20 does not apply.
Paritala Sudhakar v. State of Telangana, 2025 SCC OnLine SC 1072
- Recent authority explaining inter-relationship between animus, demand and presumption.
Md. Rahim Ali v. State of Assam, 2024 SCC OnLine SC 1695 & Jay Kishan v. State of U.P., 2025 SCC OnLine SC 296
- Invoked for strict construction of penal statutes.
Yadwinder Singh v. Lakhi, 2025 SCC OnLine SC 686
- Used illustratively to show appellate intervention thresholds.

Legal Reasoning of the Court

1. Triad of Offence Components

The Court stressed the doctrinal “triad” for PC Act offences: demand → acceptance → recovery. Omission of any element renders the prosecution incomplete.

2. Scrutiny of Witness Credibility

Complainant (PW-1) denied knowledge of the inspection report, but instantly admitted signatures when confronted — undermining veracity.
Shadow witness (PW-2) offered inconsistent statements regarding demand.
Absence of independent, cogent proof of demand made prosecution’s story suspect.

3. Section 20 Presumption

Section 20 creates a rebuttable presumption only after it is proved that a public servant has accepted or agreed to accept illegal gratification pursuant to a demand. Since demand was unproved, the reverse burden never shifted to the accused. The Court highlighted the danger of letting mere possession of tainted money trigger presumption without the foundational fact.

4. Appellate Deference to Acquittal

Even though the High Court’s reasoning was terse, the Supreme Court refused to substitute its own view where material evidence supported two plausible interpretations. The principle of “double presumption of innocence” (initial and reinforced upon acquittal) guided judicial restraint.

Impact of the Judgment

Investigative Standards: Agencies must secure unambiguous proof of demand (audio/video, categorical witness statements) before launching traps.
Prosecution Strategy: Prosecutors should buttress complainant testimony with corroborative evidence; documentary contradictions can sink the case.
Trial Court Analysis: Judgments must delineate each element of the triad; failure can prolong litigation and invite reversals.
Appellate Review: High Courts must craft fuller reasoning when reversing convictions, yet the Supreme Court will not interfere absent perversity.
Future Litigations: Defence counsels will cite this ruling to challenge convictions where demand evidence is shaky; courts will be cautious in invoking Section 20.

Complex Concepts Simplified

Section 7, PC Act: Makes it an offence for a public servant to demand or accept any gratification (other than legal remuneration) as a motive or reward for doing an official act.
Section 13(1)(d) read with Section 13(2): Defines “criminal misconduct” by public servants and prescribes penalty.
Section 20 Presumption: A legal device shifting the burden of proof to the accused after the prosecution establishes demand and acceptance. The accused must then explain the money as lawful.
Reverse Burden: Unlike normal criminal law (where prosecution must prove guilt), certain statutes invert the onus once foundational facts are proved. Constitutionally valid if the initial facts are proved beyond reasonable doubt.
Perverse Finding: A finding unsupported by evidence or against the weight of evidence; only such findings invite Supreme Court interference in acquittals.

Conclusion

The Supreme Court’s ruling cements the “Demand First” doctrine: absent credible evidence of a demand, the statutory presumption under Section 20 is inoperative, and recovery alone cannot convict. The decision not only safeguards accused persons from presumptive guilt but also nudges investigative bodies to adopt more robust, transparent methods to establish the vital link of demand. It will shape future corruption trials, tightening evidentiary thresholds and reinforcing fairness in criminal adjudication.