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Criminal Law

Non public servant can be convicted under Prevention of Corruption Act

 14-May-2025

Shanthi Pugazhenthi v. State

“In other words, any person who persuades a public servant to take bribes, decides to raise money through bribes along with a public servant and prompts such public servant to keep the wealth with him/her or keeps the amassed wealth of a public servant in his/her own name is guilty of committing the offence of abetment of offence under section 13(1)(e) of the 1988 Act.” 

Justices Sudhanshu Dhulia and K. Vinod Chandran

Source: Supreme Court  

Why in News? 

Recently, the bench of Justices Sudhanshu Dhulia and K. Vinod Chandran held that even a non-public servant can be convicted for abetting a public servant in accumulating disproportionate assets under the Prevention of Corruption Act. 

  • The Supreme Court held this in the matter of P. Shanthi Pugazhenthi v. State  (2025). 

What was the Background of P. Shanthi Pugazhenthi v. State (2025) Case? 

  • P. Shanthi Pugazhenthi worked as an Assistant Superintendent in the Chennai Port Trust. 
  • Her husband served as a Divisional Manager in United India Insurance Co. Ltd. 
  • In June 2009, an FIR was registered against her husband for allegedly demanding and receiving Rs. 3,000 for handing over a cheque relating to a motor accident claim. 
  • During investigation, raids were conducted at their residence. 
  • On 31th December, 2009, another FIR was registered against her husband under section 13(2) read with 13(1)(e) of the Prevention of Corruption Act, 1988 (PC Act). 
  • The investigation revealed documents relating to movable and immovable properties in the names of both the appellant and her husband. 
  • The prosecution alleged that during the period between 1st September, 2002, and June 16, 2009, her husband had acquired assets disproportionate to his known sources of income. 
  • A chargesheet was filed on 18th December, 2010, charging her under section 109 IPC read with sections 13(2) and 13(1)(e) of the PC Act. 
  • The prosecution alleged that the couple had acquired disproportionate assets amounting to Rs. 60,99,216. 
  • The Trial Court convicted her husband under section 13(2) read with 13(1)(e) of the PC Act and sentenced him to 2 years of rigorous imprisonment. 
  • The appellant was convicted under section 109 IPC read with sections 13(2) and 13(1)(e) of the 1988 Act and sentenced to 1 year of rigorous imprisonment. 
  • The High Court of Madras dismissed their appeal, upholding the Trial Court's findings. 
  • The appellant subsequently approached the Supreme Court challenging her conviction. 

What were the Court’s Observations? 

  • The Supreme Court examined whether the appellant was rightly convicted for abetment of an offence under section 13(1)(e) of the PC Act. 
  • The Court relied on its earlier judgment in P. Nallammal & Anr. v. State (1999) which established that an offence under section 13(1)(e) of the 1988 Act can be abetted by non-public servants. 
  • The Court observed that any person who persuades a public servant to take bribes is guilty of committing the offence of abetment under section 13(1)(e) of the PC Act. 
  • The Court noted that the 2018 Amendment to the PC Act has substituted Section 12, making all offences under the Act abettable. 
  • The Supreme Court determined that the appellant's case fell within either the second or third illustration provided in the P. Nallammal case. 
  • The Court observed that the appellant was actively involved in concealing disproportionate wealth by keeping assets in her name. 
  • The Supreme Court noted that even the appellant was a public servant at the time of commission of the offence, though she was prosecuted in her capacity as the wife of the main accused. 
  • The Court rejected the appellant's argument that she was no longer the wife of the co-accused, stating it was immaterial as she was his wife at the time of the offence. 
  • The Court emphasized that it is well-settled law that even a non-public servant can be convicted under section 109 IPC read with 13(1)(e) of the 1988 Act. 
  • The Supreme Court found no reason to interfere with the concurrent findings of the courts below and accordingly dismissed the appeal. 
  • The Court directed the appellant, who was on bail, to surrender within four weeks from the date of the judgment. 

What is Section 13(1)(e) of PC Act ? 

  • Section 13(1) deals with Criminal misconduct by a public servant. 
  • Section 13(1)(e) of the Prevention of Corruption Act, 1988, criminalized possession of pecuniary resources or property disproportionate to known sources of income by a public servant. 
  • The provision applied when a public servant or any person on their behalf possessed resources or property that the public servant could not satisfactorily account for during their period of office. 
  • The Explanation to Section 13(1)(e) defined "known sources of income" as income received from any lawful source that had been properly declared according to applicable laws, rules, or orders governing public servants. 
  • This section created a specific offence related to disproportionate assets held by public servants, distinct from other corruption offences. 
  • Section 13(1)(e) placed the burden on public servants to satisfactorily explain any assets or resources disproportionate to their declared income. 
  • The section was structured to capture situations where the disproportionate assets were held not only by the public servant directly but also by others on their behalf. 
  • The provision was designed to address the accumulation of unexplained wealth by public servants during their tenure in office. 
  • The Prevention of Corruption (Amendment) Act, 2018, omitted Section 13(1)(e) from the statute as part of a comprehensive overhaul of anti-corruption legislation. 
  • Prior to its omission, Section 13(1)(e) was a key provision used by investigating agencies to prosecute public servants for possessing assets disproportionate to their known sources of income. 
  • Despite its omission in 2018, cases that commenced prior to the amendment continue to be prosecuted and adjudicated under the unamended provisions, following the principle that substantive rights and liabilities are determined by the law in force when the cause of action arose. 
  • Section 13 (2) says that any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than four years but which may extend to ten years and shall also be liable to fine. 

Criminal Law

Section 161 of Criminal Procedure Code, 1973

 14-May-2025

Renuka Prasad v. The State Represented by Assistant Superintendent of Police 

“Merely because the story came out of the mouth of the IO, it cannot be believed and a legal sanctity given to it, higher than that provided to Section 161 statements under Section 162 of the CrPC.” 

Justice Sudhanshu Dhulia and Justice K Vinod Chandran 

Source: Supreme Court 

Why in News? 

A bench of Justice Sudhanshu Dhulia and Justice K Vinod Chandran set aside the conviction of the accused which was based on the investigation officer’s statements proving the witness statements recorded under Section 161 of CrPC. 

  • The Supreme Court held this in the case of Renuka Prasad v. The State Represented by Assistant Superintendent of Police (2025). 

What was the Background of Renuka Prasad v. The State Represented by Assistant Superintendent of Police (2025) Case?   

  • This case involves a murder where 71 out of 87 prosecution witnesses turned hostile, including key eyewitnesses who failed to identify the assailants. 
  • The victim was an employee who had resigned from an institution managed by A1 (first accused) and joined an institution managed by PW4 (brother of A1). 
  • According to the prosecution, A1 harbored enmity toward the deceased because the deceased actively supported PW4 in a sibling rivalry over the division of family assets. 
  • The prosecution alleged that A1, along with his employees (A2 to A4), engaged two contract killers (A5 and A6) through an advocate (A7) to murder the deceased. 
  • The deceased was allegedly hacked to death in front of his son (PW8) at 7:45 PM on April 28, 2011, and died at 8:40 PM the same day. 
  • PW8, who filed the First Information Statement, failed to identify the assailants or weapons at trial despite initially claiming ability to do so. 
  • The Trial Court acquitted all accused due to insufficient evidence as most witnesses turned hostile. 
  • The High Court reversed the Trial Court's decision and convicted A1 to A6 under Section 302 read with Section 120-B of the Indian Penal Code, while upholding A7's acquittal. 
  • The case was appealed to the Supreme Court, where the appellants challenged the High Court's reversal of the acquittal.

What were the Court’s Observations? 

  • The High Court improperly relied on testimony from Police Officers regarding statements made during investigation, which cannot be treated as gospel truth without witness corroboration at trial. 
  • Section 162 of the Criminal Procedure Code, 1973 (CrPC) clearly establishes that statements made to police officers during investigation (Section 161 statements) can only be used for contradicting witnesses, not as substantive evidence. 
  • The Court found that witnesses turning hostile either means they were persuaded/coerced into changing their statements or they never made such statements to police officers in the first place. 
  • The seizures and recoveries relied upon by the High Court were not valid as evidence since independent witnesses who attested to the mahazars (records of seizure) turned hostile. 
  • Cash recovered from the accused (A2 to A6) had no proven connection to the crime and was not a recovery under Section 27, making it inadmissible as evidence. 
  • The confession under Section 27 could not be relied upon to implicate other accused as it violated Sections 25 and 26 of the Indian Evidence Act, 1872 (IEA). 
  • The High Court's reversal of the Trial Court's acquittal was based on mere surmises and conjectures, improperly relying on the testimony of Investigating Officers reciting Section 161 statements. 
  • The High Court's assumption that mass witness hostility was due to influence wielded by the accused was deemed presumptuous and fallacious by the Supreme Court. 
  • Despite sharing the High Court's consternation over the cold-blooded murder, the Supreme Court could not rely on inadmissible Section 161 statements, unproven voluntary statements, or recoveries not connected to the crime. 
  • The Court acknowledged that witness hostility could stem from various factors including fear, political pressure, family pressure, societal pressure, or monetary considerations. 
  • Thus, the Court acquitted the accused persons and reversed the judgment of the High Court. 

What is Section 161 of CrPC? 

  • This provision is contained in Section 180 of Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). 
  • Section 180 of BNSS deals with police examination of witnesses during investigation and consists of three subsections with additional provisos.  
  • Under subsection (1):  
    • Any investigating police officer or authorized police officer (of rank prescribed by State Government) can orally examine persons believed to have knowledge of the case.  
  • Under subsection (2), the examined person must:   
    • Answer all questions truthfully related to the case.  
    • Not be compelled to answer questions that may incriminate them or expose them to penalty/forfeiture.  
  • Under subsection (3), the police officer:   
    • May record written statements during examination.  
    • Must maintain separate and true records for each person's statement.  
    • Can record statements through audio-video electronic means.  
  • Special provisions are made for recording statements of women victims:   
    • Applies to offences under Sections 64-71, 74-79, and 124 of BNS.  
    • Statements must be recorded by either: a. A woman police officer, or b. Any woman officers.  
  • The section aims to:   
    • Facilitate proper investigation.  
    • Protect witness rights against self-incrimination.  
    • Ensure proper documentation of witness statements.  
    • Provide gender-sensitive handling of women victims' cases. 

Mercantile Law

Section 36 of Arbitration and Conciliation Act

 14-May-2025

Anglo American Metallurgical Coal Pvt Ltd. v. MMTC Ltd. 

“Judgment debtor cannot raise objections under Section 47 CPC during execution of an arbitral award under Section 36 of the Arbitration and Conciliation Act, as it would amount to a second challenge and defeat the finality intended under Section 34.” 

Justice Jasmeet Singh 

Source: Delhi High Court 

Why in News? 

Recently, the bench of Justice Jasmeet Singh holds that a judgment debtor cannot file objections under Section 47 CPC in execution of an arbitral award under Section 36 of the Arbitration Act, as it would undermine the limited challenge mechanism under Section 34. 

  • The Delhi High Court held this in the matter of Anglo-American Metallurgical Coal Pvt Ltd. v. MMTC Ltd. (2025). 

What was the Background of Anglo-American Metallurgical Coal Pvt Ltd. v. MMTC Ltd. (2025) case? 

  • On 7th March, 2007, a Long-Term Agreement (LTA) was executed between Anglo American Metallurgical Coal Pty. Ltd. (decree holder) as the Seller and MMTC Ltd. (judgment debtor) as the Purchaser for the sale and purchase of coking coal on FOB (trimmed) basis from DBCT Gladstone in Australia. 
  • The LTA initially encompassed three delivery periods of one year each, ending on 30th June, 2007, with an option for MMTC to extend for two additional delivery periods. 
  • MMTC exercised this option, extending the agreement to include a Fourth Delivery Period (1st July, 2007 to 30th June, 2008) and a Fifth Delivery Period (1st July, 2008 to 30th June, 2009), with an obligation to purchase 466,000 MT of coking coal during each period. 
  • The Fifth Delivery Period was subsequently extended by Anglo American's letter dated 14th August, 2008, to end on September 30, 2009. 
  • The agreed price for two types of coking coal (Isaac Coking Coal blend and Dawson Valley blend) for the Fifth Delivery Period was US$ 300 per MT, confirmed by MMTC in a letter dated 20th November, 2008. 
  • During the Fifth Delivery Period, MMTC lifted only two shipments at the contractual price of US$ 300 per MT:  
    • 2,366 MT on 30th October, 2008 
    • 9,600 MT on 5th August, 2009 (part of an ad hoc agreement for 50,000 MT) 
  • The total quantity lifted was 11,966 MT, compared to the contracted quantity of 466,000 MT, leaving 454,034 MT unlifted by MMTC. 
  • The LTA contained an arbitration clause (Paragraph 20), stipulating that disputes would be settled under ICC Rules, with the venue of arbitration in New Delhi, India. 
  • Anglo American claimed that MMTC breached the terms of the LTA by failing to lift the contracted coal quantity and sought damages equal to the difference between the contract price (US$ 300) and the market price (average US$ 126.62) at the date of breach (30th September, 2009). 
  • MMTC disputed these claims on various grounds including non-availability of contracted goods and market conditions following the Lehman Brothers collapse. 

What were the Court’s Observations? 

  • The Arbitration and Conciliation Act, 1996 (A & C Act) establishes a complete, self-contained code with comprehensive legislative framework, deliberately minimizing dependence on general law for arbitration matters. 
  • Limited judicial intervention is a cornerstone principle of the 1996 Act, with Section 5 explicitly restricting court interference to only those instances specifically provided within Part I of the Act. 
  • The court observed that Section 36 of the A & C Act creates a limited legal fiction, treating an arbitral award "as if it were a decree" solely for enforcement purposes, without transforming the award into an actual decree. 
  • An arbitral award remains fundamentally distinct from a court decree, as it does not satisfy the essential conditions of a decree under Section 2(2) of the Code of Civil Procedure, 1908 (CPC). 
  • The court determined that CPC provisions apply to arbitral awards only for specific enforcement mechanisms (such as attachment, sale, and detention procedures under Order XXI), not for raising substantive objections. 
  • Permitting objections under Section 47 of CPC during enforcement would effectively create an additional round of challenges to arbitral awards, contradicting the finality intended by Sections 34 and 35 of the A & C Act. 
  • The court held that challenges to an award on grounds of nullity or illegality can only be raised through Section 34 proceedings of the 1996 Act, not during the enforcement stage. 
  • The court concluded that allegations of fraud or collusion require formal findings by appropriate authorities rather than mere preliminary inquiries to constitute legitimate grounds for staying award enforcement. 

What is Section 36 of the Arbitration and Conciliation Act, 1996? 

  • Section 36(1) establishes that once the time period for challenging an arbitral award under Section 34 has expired, the award becomes enforceable in accordance with the CPC as if it were a court decree. 
  • The phrase "in the same manner as if it were a decree of the court" creates a legal fiction limited strictly to enforcement procedures, without converting the arbitral award into an actual decree. 
  • Section 36(2) clarifies that the mere filing of an application to set aside an arbitral award under Section 34 does not automatically render the award unenforceable. 
  • A separate, specific application for stay of the arbitral award must be filed, and a stay can only be granted through a court order in accordance with Section 36(3). 
  • Section 36(3) empowers the court to grant stay of an arbitral award's operation subject to conditions it deems appropriate, but requires that reasons for granting such stay must be recorded in writing. 
  • The proviso to Section 36(3) mandates that when considering applications for stay of monetary awards, courts must consider the provisions governing stays of money decrees under the CPC. 
  • The enforcement mechanism under Section 36 represents a deliberate legislative choice to treat arbitral awards as final and binding, with limited grounds for interference in the enforcement process. 
  • The structure of Section 36 reinforces the principle that challenges to arbitral awards must follow the specific pathway established by the Arbitration Act, primarily through Section 34, rather than through collateral challenges during enforcement. 
  • Section 36 reflects the pro-enforcement bias of the 1996 Act, ensuring that enforcement remains efficient while providing limited, controlled mechanisms for staying enforcement when justified. 
  • The provisions of Section 36 must be interpreted in light of the Arbitration Act's overall scheme of minimizing judicial intervention and expediting the enforcement of arbitral awards.