Author: Arjun Uppal

Publisher: D-Fraud

Publisher access: web link

Published in: March, 2015

Corruption has vast deleterious impact on a society and the economy. The evolution of a strong regulatory mechanism in the form of legislation can possibly be one step towards prevention and combating the evil of corruption. The attempts to counter the ill have been many in India, some of which have been set-out hereunder.

Things to look out for:-

Corruption probably is one of the most damaging consequences of poor governance and is being seen as a social evil today, than merely an economic impediment. The corrosive consequence of corruption on societies can be gauged by the deterrent effect on economic growth and investment, adversarial impact on the available resources, distortion of the markets and spread of organised crimes, to say the least.

In September 1997, the World Bank in its report titled “Helping Countries Combat Corruption – The Role of World Bank” settled on a definition, corruption is the abuse of public office for private gain.

The phenomenon has multiple facets and is prevalent in all countries, big and small, rich and poor, but the developing countries are those where the implications are worst. In addition to the nations coming up with legislations dealing with corruption, international organisations have also come up with advisories and conventions. The United Nations Office on Drugs and Crime formulated the “United Nations Convention Against Corruption” (hereinafter referred to as “UN Corruption Convention”), which was resolved by the General Assembly on October 31, 2003.

The first consolidated legislation on the issue of corruption was the Prevention of Corruption Act, 1947, which succeeded the pre-independence and war time Criminal Law (Amendment) Ordinance, 1944 dealing with the subject.

Repealing the 1947 legislation, the Indian Parliament in September 1988, enacted the Prevention of Corruption Act, 1988 (hereinafter referred to as “PC Act”) containing the legal framework for prevention of corruption. This forms the present law of the land on the pivotal issue. It consolidated the regulations enshrined under the Prevention of Corruption Act, 1947, Sections 161 – 165A of the Indian Penal Code, 1860 (hereinafter referred to as “IPC”) and the Criminal Law (Amendment) Act, 1952.

The Department of Personnel and Training, Ministry of Personnel, Public Grievances and Pensions is the nodal authority for anti-corruption matters.

The PC Act specifically provides for definitions of public duty and public servant in relation to corruption.Public duty carries the meaning of a duty in the discharge of which the State, public or community at large has an interest. An extensive definition of the term public servant has been provided to cover any person in service or pay of the Government, local authority, a statutory corporation, a Government company, an authority owned, controlled or aided by the Government; any judge, arbitrator or a person authorised to perform function of administration of justice, such as liquidator or receiver; any person responsible for the conduct of elections; any person who, by virtue of the office he holds, is required to perform a public duty; an office bearer of a registered co-operative society engaged in agriculture, industry, trade or banking, financially aided by the Government; chairman or member of any service commission or board; vice-chancellor, governing body member, professor, reader or lecturer of any university; or office bearer of an educational, scientific, social, cultural or other institution financially aided by the Government. As evident, the PC Act would cover a large number of individuals occupying different positions by virtue of the above wide definition.

The Government is empowered to appoint Special Judges, which have been authorized to try on the offences punishable under the PC Act. Any person who is or has been a Sessions Judge, Additional Sessions Judge or Assistant Sessions Judge is qualified for such appointment under the PC Act. The offences shall be tried only by a Special Judge appointed for the area where it was committed. Such Special Judge may also try any other related offence with which the accused has been charged at the same trial. The procedure applicable for such trial would be the same as that for the trial of a warrant case by Magistrates under the Code of Criminal Procedure, 1973. The Special Judge is empowered to pass any sentence prescribed under law upon a person convicted by him.

Appeal and revision against an order of the Special Judge lies with the High Court and such powers shall be exercised as conferred on the High Court by the Code of Criminal Procedure, 1973, as if the Special Judge was a Court of Sessions.

The provisions of the PC Act prescribe a number of offences and punishments for the same.

At first, taking of gratification other than legal remuneration by a public servant in respect of an official act has been described as an offence under Section 7 of the PC Act. The Supreme Court of India in the cases of R.S. Nayak v. A.R. Antulay[1] laid down the ingredients of the offence. The Black’s Law Dictionary definesgratification to mean ‘a voluntarily given reward or recompense for a service or benefit’.

A public servant, including a person expecting to be so, is guilty of the offence under Section 7 of the PC Act in case such person accepts, obtains, agrees to accept or attempts to obtain any gratification other than the legal remuneration for:-

In relation to the said offence, gratification is not restricted to pecuniary benefit or that capable of being estimated in monetary terms. It may be accepted or obtained by the public servant either for himself or for any other person.

The act of accepting or obtaining gratification by a public servant to do any of the abovementioned three acts, inducing such public servant by corrupt or illegal means and by the exercise of personal influence shall amount to an offence respectively under Section 8 and Section 9 of the PC Act.

The penalisation for the offences under Section 7, 8 and 9 of the PC Act is an imprisonment for a term of not less than three (3) years, but extending up to seven (7) years and fine. Any public servant abetting the offence of taking gratification for inducing a public servant by corrupt or illegal means (Section 8) or by exercising personal influence (Section 9), shall be liable to be punished with an imprisonment of a term between six (6) months and five (5) years and also to fine. An enhanced punishment has been prescribed for a person who habitually commits such offences under Section 14 of the PC Act and the same shall be imprisonment for a term not less than five (5) years, but which may extend to ten (10) years and fine.

Accepting, obtaining, agreeing to accept or attempting to obtain any valuable thing by a public servant from a person who:-

for no consideration or inadequate consideration (in the public servant’s knowledge), would constitute an offence under Section 11 of the PC Act and is punishable with an imprisonment of a minimum term of six (6) months which may extend up to five (5) years and to fine.

An abetment of the offences of taking gratification in terms of Section 7 or a valuable thing as provided under Section 11 of the PC Act, is punishable with an imprisonment for a term of three (3) years but may extend to seven (7) years and to fine.

Furthermore, the PC Act in terms of Section 13 provides for the offence of criminal misconduct by a public servant, which would be committed if the public servant:-

A public servant is punishable with imprisonment for a term not less than four (4) years but which may extend up to ten (10) years and to fine for the offence of criminal misconduct.

On a vital issue of the necessity of mens rea for an offence under the PC Act, the Supreme Court in R. Balakrishnan Pillai v. State of Kerala[2] ruled that mens rea is an essential ingredient for every criminal offence, so is the case of the PC Act. In this case the proceedings under the Prevention of Corruption Act, 1947 (the erstwhile legislation repealed by the PC Act) were set aside for the absence of mens rea.

In terms of the layout of the legislation of the PC Act, the bribe giver has been considered to be one who abets the offence under Section 7 of the PC Act, i.e. taking of gratification by a public servant. However, the PC Act grants immunity to a bribe giver for a statement, against a public servant that he offered or agreed to offer any gratification or any valuable thing to such public servant.

It has been observed in Sri Bhardwaaj Media Pvt. Ltd. v. State of Delhi[3] that the offence of bribe giving is an equally serious offence. The Supreme Court in the case of MO Shamsudhin v. State of Kerala[4], discussed the distinction between a person who offers to give bribe and a person who is forced to give bribe, ruling that the former would be liable as an accomplice, but the later would be an interested witness, which distinction has also henceforth been followed by various courts[5].

While such bribe giver could be prosecuted for abetment under Section 12 of the PC Act, however caution is to be given to the immunity granted by the legislature.

The institution of Central Vigilance Commission (hereinafter referred to as “CVC”) has been established under the Central Vigilance Commission Act, 2003 (hereinafter referred to as “CVC Act”) for exercising superintendence and control over vigilance matters at the Central level. The CVC enquires into the offences alleged to have been committed by certain categories of public servants under the PC Act. The Government vide resolution no. 004/VGL/26 on “Public Interest Disclosure and Protection of Informer” passed in April 2004, authorized the CVC as the ‘Designated Agency’ to receive written complaints for disclosure on any allegation of corruption or misuse of office and recommend appropriate action. The public servants covered within the ambit of the CVC Act include an employee of the Central Government or a corporation established by or under any central act, Government company, society or any local authority owned or controlled by that Government, members of All-India Services serving in connection with affairs of the Union and group A officers of the Central Government or such other levels of officers, as the Government may notify. In order to discharge the functions of investigation, the CVC refers matters to the Central Bureau of Investigation (hereinafter referred to as “CBI”) for investigation and exercises superintendence over its functioning. The CVC reviews the progress of the investigations conducted by the CBI and may also, as and when required, provide advice to the Central Government and the corporations established by the Central Government.

The CBI established under the Delhi Special Police Establishment Act, 1946 has an Anti-Corruption Division since 1987, to deal with cases of corruption committed by public servants of all Central Government departments, central public sector undertakings and central financial institutions. The CBI may, however, investigate into the corruption or bribery allegations against public servants at the State level, in case the State Government has approved or the High Court of the State or the Supreme Court of India has so directed. In terms of the Vigilance Manual issued by the CVC in 2005, the CVC would refer to the CBI cases involving allegations of offences punishable under law, such as offences involving bribery, corruption, forgery, cheating, criminal breach of trust, falsification of records, possession of assets disproportionate to known sources of income etc. or other cases of complicated nature requiring expert police investigation.

The CVC may also require a departmental inquiry into allegations of an offence under the PC Act. Certain state level Anti-Corruption Bureaus have also been established by various states to enquire into complaints received from the public relating allegations of bribery, corruption criminal misconduct, embezzlement of Government funds against State Government public servants and of the bodies or authorities set-up or funded by the State Government, such as the Municipal Corporations etc. The anti-corruption bureau is basically a unit of the police establishment of the State and is established pursuant to a notification by the Government.

India recently witnessed the enactment of the much-awaited Lokpal and Lokayuktas Act, 2013 (hereinafter referred to as “Lokpal Act”), which was first introduced in the Parliament in the year 1968.

Under the Lokpal Act, powers of investigation arising out of an allegation of corruption under the PC Act have been granted on the Lokpal against any person who is or has been:-

The anti-graft ombudsman, with Lokpal being at the Centre and Lokayuktas at the State level, will co-ordinate with the CVC, which merely has advisory and supervisory functions and is also not empowered to look into state-level functionaries. The Lokpal would have the supervisory functions over the CBI. A body similar to Lokpal for exercising jurisdiction upon public servants in the provincial states and local bodies has been created in the Lokayukta.

In addition to the offences created under the PC Act, the IPC in terms of Section 409 provides for the offence of criminal breach of trust by a public servant. Per Section 409 of the IPC, dishonest misappropriation, conversion to his own, dishonest use or unlawful disposition (in violation of law of any legal contract) of any property or dominion over property, which had been entrusted on the public servant in his official capacity, would constitute an offence. On conviction, the public servant shall be punishable with an imprisonment of ten (10) years, which may extend to life and fine. Certain other provisions of the IPC, such as criminal conspiracy and common intention might also trigger, depending on the facts and circumstances of the case.

In 2007, the 2nd Administrative Reforms Commission recommended in relation to the PC Act that the private sector entities providing the public utility services and non-government organisations receiving substantial funding from the government should be covered under the ambit of the PC Act. However, with these recommendations not being formulated into law, the courts have prosecuted such entities and individuals not being public servants under the provisions of the Prevention of Money Laundering Act, 2002. Under the scheme of the money laundering legislation, any person who acquires, owns, possesses or transfers any proceeds of a crime or knowingly enters into a transaction which is directly or indirectly related to the proceeds of crime or conceals or aids in the concealment of the proceeds of crime, shall be liable to prosecution for the offence of money laundering.

The Prevention of Corruption (Amendment) Bill, 2013 (hereinafter referred to as “Amendment Bill”) was introduced in the Rajya Sabha in August 2013 to amend the PC Act. The Amendment Bill was referred to the Standing Committee of Personnel, Public Grievances, Law and Justice, which submitted its report in February, 2014. In pursuance to the report there had been certain modifications to the Amendment Bill. The revised draft was approved at a cabinet meeting and was subsequently sent to the Law Commission of India for its views. The Law Commission has recently in February, 2015 submitted its report thereto (hereinafter referred to as “Law Commission Report”).

A pertinent proposal under the Amendment Bill is the introduction of a specific offence to penalise the bribe giver. The introduction of the new supply side offence has been in order to make the domestic law consistent with the UN Corruption Convention, which provides that the promise, offering or giving of an undue advantage, directly or indirectly, to a public servant in lieu of the exercise or refraining from acting be made a criminal offence. However, deletion of the provision of the PC Act providing immunity to the bribe giver from prosecution might have a deterrent effect on the appearance of such persons as witnesses before court.

An amendment is proposed to the offence of criminal misconduct as well. This would now require proving intention to acquire assets disproportionate to income, as compared to the mere possession of such assets, envisaged under the PC Act. The amended offence of criminal misconduct does, however, not cover use of illegal means, abuse of position or obtaining a valuable thing disregarding the public interest by a public servant.

The Amendment Bill also took a step towards consolidation of the offences of taking a bribe by a public servant.

In another noteworthy amendment, the Amendment Bill introduces provisions for the attachment and forfeiture of property, giving stronger teeth to the corruption authorities, which was recommended in 1999 by the Law Commission of India. The Amendment Bill empowers the investigating officer to approach the Special Judge for orders of attachment of property of the public servant, in case he has reason to believe that an offence has been committed by such official.

Besides the above proposals under the Amendment Bill, there have been a number of other modifications to the PC Act, which might lead to transformation of the entire legislation, as and when passed by the Parliament.

The recent years have witnessed a large number of allegations of corruption in India. This evil has seen a constant rise in the demand of effective legislation and a stronger implementation mechanism.

The legal regime has also been faced with proposed amendments and new legislations. The introduction of the Lokpal Act is expected to give new impetus to investigation of corruption cases. Further, the Amendment Bill seeks to make significant developments to the PC Act, which could be said to reform the entire legislation. The Law Commission of India coming out with detailed recommendations in the Law Commission Report, the future path of the Amendment Bill remains to be seen for the eventual enforcement.

References:-

[1] R.S. Nayak v. A.R. Antulay, cited at (1984) 2 SCC 193.

[2] R. Balakrishnan Pillai v. State of Kerala, cited at (2003) 9 SCC 700.

[3] Sri Bhardwaaj Media Pvt. Ltd. v. State of Delhi, cited at MANU/DE/3231/2007.

[4] MO Shamsudhin v. State of Kerala, cited at (1995) 3 SCC 351.

[5] A case where the said distinction was followed is Madhavakrishnan v. State of Tamil Nadu, cited at MANU/TN/0362/2002.

Original author: Arjun Uppal