In a significant ruling interpreting the Prevention of Corruption Act, 1988, the Supreme Court has held that licensed stamp vendors fall within the ambit of “public servants” under Section 2(c)(i) of the Act. However, despite this legal finding, the Court acquitted the appellant Aman Bhatia, a licensed stamp vendor, of corruption charges on account of insufficient evidence proving the demand for illegal gratification.
The judgment was delivered by Justice J.B. Pardiwala and Justice R. Mahadevan in Criminal Appeal No. 2613 of 2014: Aman Bhatia vs State (GNCT of Delhi), challenging the concurrent conviction of the appellant by the Trial Court and the Delhi High Court under Sections 7 and 13(1)(d) read with Section 13(2) of the PC Act.
Background of the Case
According to the prosecution, the appellant Aman Bhatia, a licensed stamp vendor, was apprehended on 9 December 2003 following a trap laid by the Anti-Corruption Branch. The complainant had alleged that Bhatia demanded ₹12 for a ₹10 stamp paper. Upon complaint, phenolphthalein-coated notes of ₹10 and ₹2 were given to the complainant for the trap operation. The appellant allegedly accepted the tainted money and was caught red-handed, with a hand wash turning pink.
Following trial, Bhatia was convicted under Sections 7 and 13(1)(d) read with Section 13(2) of the Prevention of Corruption Act and sentenced to six months and one year of rigorous imprisonment respectively, along with fines. His conviction was upheld by the Delhi High Court in 2013.
Legal Issue Before the Supreme Court
The appeal before the Supreme Court raised two key issues:
- Whether a licensed stamp vendor qualifies as a “public servant” under Section 2(c)(i) of the Prevention of Corruption Act, 1988.
- Whether the conviction of the appellant was sustainable on merits based on the evidentiary record.
Supreme Court’s Observations on Legal Status of Stamp Vendors
The Court undertook an in-depth examination of the legislative intent behind the Prevention of Corruption Act and particularly the definition of “public servant” in Section 2(c)(i), which includes anyone “in the service or pay of the Government or remunerated by the Government by fees or commission for the performance of any public duty.”
The Court held:
“It is the nature of duty being discharged by a person which assumes paramount importance when determining whether such a person falls within the ambit of the definition of public servant as defined under the PC Act.”
Referring to the Delhi Province Stamp Rules, 1934, the Court noted that licensed stamp vendors are remunerated by way of discounts allowed by the Government on the purchase of stamp papers. This discount was held to be a form of commission or remuneration for the performance of a public duty — namely, facilitating the public’s access to stamp papers which are essential for legal transactions.
The Court added:
“The difference between the procurement price and the sale price is by and large because of the scheme devised by the Government… The discount, therefore, serves as a form of remuneration and operates as a commercial incentive.”
The Bench also clarified that the expression “commission” in Section 2(c)(i) of the PC Act must not be equated with its meaning under the Income Tax Act. The focus, the Court held, should be on the nature of the duty and the source of remuneration.
Acquittal Due to Lack of Proof of Bribe Demand
While affirming that stamp vendors are public servants under the PC Act, the Court held that the conviction of the appellant could not be sustained due to lack of evidence establishing a demand for illegal gratification.
The Court reiterated established principles of law:
“Mere possession and recovery of tainted currency notes from a public servant, in the absence of proof of demand, is not sufficient to establish an offence under Sections 7 and 13(1)(d) of the PC Act.”
The complainant and the panch witness gave inconsistent testimonies, particularly about the alleged demand and acceptance of the ₹2 excess amount. The Court noted that even though phenolphthalein powder was found on the appellant’s hand, the ₹10 note — which he was legally entitled to receive — was also tainted, making it unclear which note caused the chemical reaction.
The Supreme Court cited its own precedents, including Neeraj Dutta v. State (NCT of Delhi) [(2023) 4 SCC 731] and P. Satyanarayana Murthy v. State of A.P. [(2015) 10 SCC 152], holding that demand of illegal gratification is a sine qua non for offences under the PC Act.
Final Decision
Accordingly, the Court set aside the conviction and acquitted the appellant, concluding:
“Having regard to material inconsistencies in the testimony of the complainant and the testimony of the panch witness, the allegation of demand by the appellant herein does not emerge clearly, let alone being proved beyond reasonable doubt.”
