Medabalimi Srinivasa Rao vs. Central Bureau Of Investigation

Facts

The petitioner, Medabalimi Srinivasa Rao, an Assistant Commissioner of CGST, Guwahati, sought bail in a case registered by the CBI under Section 7 of the Prevention of Corruption Act, 1988. The complainant, a partner in S.S.S Construction company, alleged that the petitioner demanded a bribe of Rs. 2 Lakhs for a favorable order regarding tax payments for civil construction works undertaken in FY 2016-2017. After negotiation, the petitioner allegedly agreed to accept Rs. 50,000/- and directed the complainant to pay it through his junior. The complainant paid Rs. 50,000/- online to a specified mobile number. The petitioner was arrested on 29/06/2024. The petitioner argued that there was no independent witness or recorded conversation to substantiate the demand and acceptance of the bribe, and he had been in custody for 26 days. The CBI opposed bail, stating the petitioner was caught red-handed, and further investigation, including opening a seized locker in Hyderabad, was ongoing.

Held

The Court held that while there is no hard and fast rule for granting or refusing bail, each case must be considered on its merits, involving a judicious exercise of discretion. The Court noted the allegations against the petitioner involved demanding and accepting Rs. 50,000/- as a bribe through online mode. The Court found that the undue advantage of Rs. 50,000/- was transferred to the account of one Kamala Kumari Ikkurti, whose statement had not yet been recorded, and this was considered a crucial link in the case. The Court acknowledged the apprehension raised by the CBI that releasing the petitioner at this stage could hamper further investigation and potentially influence witnesses. Therefore, without expressing any opinion on the merits of the case, the Court concluded that the petitioner could not be released on bail at this stage. The Court directed the CBI to complete the investigation as early as possible, after which the petitioner would be at liberty to move a bail application before the trial court, which would consider it in accordance with the law. The bail application was rejected.

Key Issues

1. Whether the evidence, specifically the absence of independent witnesses during the pre-trap and post-trap memorandums and the lack of recorded conversations, is sufficient to substantiate the allegations of demand and acceptance of a bribe against the petitioner, thereby warranting continued judicial custody? (Question of law and fact, turning on Section 7 of the Prevention of Corruption Act, 1988 and principles of evidence). Petitioner's Arguments: The petitioner argued that the lack of independent witnesses and recorded conversations in the trap proceedings, except for the complainant, makes the allegations dubious. Reliance was placed on Raghbir Singh vs. State of Punjab (AIR 1976 SC 91) for the desirability of using phenolphthalein powder in trap cases to avoid reliance on oral evidence. The petitioner also contended that preliminary investigation was over and further custodial detention was unnecessary. Respondent's (CBI) Arguments: The CBI argued that the petitioner was caught red-handed accepting Rs. 50,000/- through online mode in the presence of independent witnesses. They submitted that the payment was made to a mobile number provided by the petitioner, and the transaction was confirmed. The CBI also highlighted ongoing further investigation, including the seizure of property papers and a locker key from the petitioner's Hyderabad residence, suggesting potential wrongful accumulation of wealth. Reliance was placed on Subramanian Swamy vs. Manmohan Singh, K.C. Sareen vs. CBI, Y.S. Jaganmohan Reddy vs. CBI, and P. Chidambaram vs. Directorate of Enforcement.