The Prevention of Corruption Act, 1988 (No. 49 of 1988) is an Act of the Parliament of India enacted to combat
corruption in government agencies and public sector businesses in India.
Taking a cue from US' Foreign Corrupt Practices Act,
1977, and the UK's Bribery Act, 2010, the government plans to come out with
anti-bribery guidelines for companies and their employees while dealing with
public servants. The government also proposes to hold commercial organisations
responsible in case persons associated with them bribe public servants. These
are part of a bigger move to have stricter anti-corruption laws in India -
enhanced punishment for bribe givers and bribe takers; speedier completion of
trails on corruption cases; extending protection from prosecution to public
servants who cease to hold office following retirement, resignation, etc.
Also later developments, such as, India ratifying the United Nations Convention Against Corruption “UNCAC”, international practice on treatment of the
offence of bribery and corruption, etc. necessitated a review of the existing
provisions of the Act, so as to bring it in line with current international
practice and also to meet, more effectively, the country's obligations under
the UNCAC.
The Prevention of Corruption (Amendment) Bill, 2013 was
introduced in the Rajya Sabha for the purpose on 19.08.2013. The Department
Related Parliamentary Standing Committee submitted its report on the Bill to
the Rajya Sabha on 06.02.2014 but the Bill could not be passed. As the Bill
contemplates an important paradigm shift in defining offences relating to
bribery, the views of the Law Commission of India were also sought on the
proposed amendments. Further amendments are proposed in the Bill as recommended
by the Law Commission of India in its 254th Report
The Union Cabinet approved amendments to the Prevention
of Corruption Act, 1988, that provide for classifying corruption as a heinous
crime and longer prison terms for both bribe-giver and bribe- taker. The
proposed amendment act will also ensure speedy trial, limited to two years, for
corruption cases.
It is expected that the proposed amendments would fill in
perceived gaps in the domestic anti-corruption law and also help in meeting the
country's obligations under the United Nations Convention Against Corruption
more effectively. The measures approved include penal provisions being enhanced
from minimum 6 months to 3 years and from maximum five years to seven years.
However, all is not well with the amendment and the biggest challenge has been
to the proposed Section 17A which is being opposed by intellectuals across the
country lead by Dr. Jayprakash Narayan of Lok Satta. However, before proceeding
to the said attempt to dilute the anti graft law let us first understand the
other aspect of the said amendment.
1.
7-year
prison term brings it to the heinous crime category
The amendments to the Prevention of Corruption Act, 1988,
approved by the Union Cabinet include enhancing punishment from the minimum 6
months to 3 years and from the maximum five years to seven years.
The seven-year imprisonment brings corruption to the
heinous crime category. The ambit of the existing Act will be enhanced to make
commercial entities liable for inducement of public servants. Under the present
law, only individuals are liable. The proposed amendment bill also provides for
issue of guidelines to commercial organisations to prevent persons associated
with them from bribing a public servant.
2.
Non-monetary
gratification
Non-monetary gratification will also be covered within
the definition of the word gratification in the PCA 1988.
3.
Nature of Proposed Amendments
The Prevention of Corruption (Amendment) Bill, 2013
proposes following changes in aforesaid Acts/Ordinance
to widen the description and coverage of offence of bribery in the line with
current international practice.
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Prevention of Corruption Act, 1988
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Prevention of Corruption (Amendment) Bill,
2013
|
Taking a bribe by a current or prospective
public servant
|
Section (8)
Accepting or attempting to obtain any reward, other
than a salary. This reward must be for doing or intending to do any official
act.
Accepting
a reward for official acts that favour or disfavour any person.
Accepting
a reward from another person to exercise personal influence over a public
servant.
|
Accepting
or attempting to obtain a reward for performing a public function in an
improper manner.
Inducing
another public servant to perform his public function in an improper manner,
in exchange for a reward.
Public
function is defined as one that is: i) of public nature, ii) in the course of
employment, iii) to be performed impartially and in good faith.
Improper
performance includes: i) breach of a relevant expectation, ii) failure to
perform a function that is a breach of an expectation.
Relevant
expectation is defined as i) a function performed in good faith, or ii) in a
position of trust.
|
Taking a bribe by any person to influence a
public servant
|
Section (9)
Accepting any reward from a person to induce a public
servant, illegally, to favour or disfavour someone.
Accepting
a reward to exercise personal influence over a public servant to favour or
disfavour someone.
|
Not provided in the Bill.
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Giving a bribe to a public servant
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No specific provision.
Covered
under the provision of abetment.
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Offering or promising a reward to a person for making a
public official perform his public duty improperly.
Offering
a reward to a public official, knowing that such acceptance would qualify as
performing his public duty improperly.
|
Giving a bribe by a commercial organisation
to a public servant
|
No specific provision.
Covered under the provision of abetment.
|
Offering a reward in return of obtaining or retaining
any advantage in business.
The
person acting for the organisation and the head of the organisation are also
made liable.
The
organisation and its head will not be held liable if it is proven that the organisation took
adequate precautions, and the head had no knowledge of the act.
|
Abetment
|
A public servant
abetting an offence related to influencing another public servant is covered.
Any person
abetting offences related to i) taking a bribe and ii) obtaining a valuable
thing from a person engaged with in a business transaction is covered.
|
Covers abetment by any person for all offences under
the Act.
|
Criminal Misconduct by a public servant
|
Habitually
taking a bribe or a valuable thing for free.
Fraudulent
misappropriation of property in his control.
Obtaining a
valuable thing or reward by illegal means.
Abuse of
position to obtain a valuable thing or monetary reward.
Obtaining
valuable thing or monetary reward without public interest.
Possession of
monetary resources or property disproportionate to known sources of income.
|
Fraudulent
misappropriation of property entrusted to a public servant.
Intentional
enrichment by illicit means and being in possession of property or resources
disproportionate to known sources of income.
|
Habitual Offender
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Habitually taking a reward to either influence a public
servant or abet in the taking of a bribe.
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The committing of any offence under the Act by a person
who has previously been convicted.
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Attachment and forfeiture of property
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Not provided by the Act.
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If an authorised investigating police officer believes
that a public official has committed an offence, he may approach Special
Judge for attachment of the property.
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Prior sanction for prosecution
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The prior sanction from the appropriate authority is
required for prosecution of public officials.
|
Extends the requirement of prior sanction to former
public officials, if the act was committed in their official capacity.
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Protection to bribe giver from prosecution
|
Any statement made by a bribe giver, in a corruption
trial of a public servant, would not subject him to prosecution for the
offence of abetment.
|
Not provided by the Bill.
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Penalties*:
Habitual
offender
Criminal
Misconduct
Others (taking a
bribe, abetment)
|
Imprisonment of
five years-10 years and a fine.
Imprisonment of
four years-10 years and a fine.
Imprisonment of
three years-seven years and a fine.
|
Imprisonment of
three years-10 years and a fine.
Remains
unchanged in the Bill.
Imprisonment of
three years-seven years and a fine.
|
An effort to bring the anti-corruption
laws in India in parity with global best practices and the judicial
pronouncements seems plagued with “hurried drafting and mechanical lifting” of
certain provisions of the foreign law.
Though a much-needed endeavour in
light of India’s ratification of the United Nations Convention Against
Corruption (UNCAC) in May 2011, the 2013 Bill—which is an amendment to the Prevention
of Corruption Act 1988; Delhi Special Police Establishment Act 1946; and
Criminal Law (Amendment) Ordinance 1944—has come under severe criticism by the
Law Commission, which feels that the approach “to transplant certain provisions
from the UK Bribery Act, while well intended, is misconceived and will serve to
create further confusion and ambiguity.”
With the aim to bring in clarity with
regard to payment of bribery to public servants, Law Commission chairman AP
Shah, in his report submitted to law minister Sadananda Gowda, has proposed
some significant amendments in the Prevention of Corruption (Amendment) Act.
The suggestions were made after
carrying out a detailed study of the UNCAC and other relevant statutes and case
laws of India and the UK.
As of now, the Prevention of
Corruption Act only covers public servants and does not bring in its fold
companies and private individuals. It is for the first time that the government
is proposing amending the Act to hold “a commercial organisation liable for
failure to prevent persons associated with it from bribing a public servant.”
It also laid down necessary norms for commercial organisations to set their
house in order to tackle any form of corruption perpetrated by their employees
or associates in the course of business to further the interests of the
organisations.
The 54-page report describes as
“overbroad” the provision which ascribes criminal liability “to every person
who is in charge of and responsible to the organisation for the conduct of its
business” if the offence is proved to have been committed with the consent or
connivance of the company, since it exposes the entire top brass to a jail term
of 3-7 years.
Suggesting a better solution, the law
panel has asked the legislature to drop the phrase ‘undue financial or other
advantage’ from the entire Bill and substitute it with ‘undue advantage’
throughout. “The clause ‘financial or other advantage’ (as proposed in the 2013
Bill) does not seem to cover sexual favours in return for the public servant’s
acts or omissions. Thus, the proposed amendment is actually narrowing the scope
of corruption, instead of the stated intent of expanding it,” the panel added.
The rationale given by Justice Shah is
that the ‘undue advantage’ would cover any gratification whatsoever, other than
legal remuneration, and that the word ‘gratification’ is not limited to
pecuniary gratifications or to gratifications estimable in money. The Law
Commission report says that only that official must be held liable whose
consent or connivance is proved, without any harassment caused to other
officials of the company. The report also criticises a provision which says
that a company would have to pay a fine if it is unable to prevent acts of
corruption.
While the proposed Section 8 targets commercial
organisations for indulging in bribery of a public servant to obtain an undue
advantage in business, the proposed Section
9 talks about the vicarious liability of the commercial organisations in
failing to exercise due diligence to prevent persons associated with it from
bribing a public servant.
Unlike the UK’s Bribery Act, the
proposed amendment to Section 9 does
not envisage the publication of any sort of guidance or any obligation on the
government, and it places the entire burden of proof on commercial organisation
to prove their innocence. The Commission has recommended that a new clause
should be inserted making it mandatory for the government to publish guidelines
for “adequate procedures” after due consultation with the public.
“This provision will lead to an
immediate and significant impact on the conduct of business by corporations,
especially in light of the fact that they will not have any clarity on what is
expected of them and will not even know if the procedures and processes they
adopt are in compliance or in possible breach,” Shah said.
Even separate procedures for
attachment and forfeiture introduced in the 2013 Bill in cases of corruption by
public servants are bound to create confusion. Thus, Shah has recommended
replacement of the proposed sections 18A-18N with a single provision to ensure
compliance with the UNCAC.
Though the Law Commission has managed
to correct the inordinate errors, what remains to be seen is whether Parliament
will check its faults by accepting the suggestions. If accepted, the Bill may
have far-reaching implications on understanding corruption in public life and
efforts to counter it. The amendment Bill is likely to be brought before
Parliament in this Budget session.
There must be a senior officer in an
investigating agency to decide whether or not a decision was taken in good
faith. It should not be left to a junior official to decide on a
particular case.
"One should not judge a civil
servant on the basis of whether a decision is right or wrong, but on the basis
of the documents or the information available to him as he took that decision
"It is a welcome a step. But it
has to be seen that these provisions, after they become part of law, are
implemented in letter and spirit," said former Central Vigilance
Commissioner (CVC), PJ Thomas. Legal experts also said they feel that the
proposed changes will help in checking corruption in the country.
GIVING BRIBE IS ALSO AN OFFENCE: There is also a need to distinguish between collusive corruption and extortionist corruption where the first is when both/all the parties involved indulge in corruption to do something which is not legal. On the other hand extortionist bribery is something which is out of compulsion and thus a person is forced to give some money to get his legal dues done. Thus both kind of corruption can not be dealt with the same yardstick and it requires different understanding and protection.
Amendments Proposed in Section 17
- In 2003, Section 6A was incorporated in the Delhi Special
Police Establishment Act, 1946 (DSPE Act, 1946) dealing with CBI. This
section mandated prior approval of government before CBI took up
investigation of cases of corruption under Prevention of Corruption Act,
1988 (PC Act, 1988) relating to officers of the rank of Joint Secretary
and above.
In
2014, in the case of Dr. Subramanian Swami vs Director, CBI and others
(writ petition (civil) number 21 of 2004 of Centre for Public Interest
Litigation vs Union of India) the Supreme Court struck down Section 6A
as unconstitutional and violative of rule of law.
- PC Act, 1988 gives full freedom to investigative agencies to
conduct enquiry into allegations against any public servant. No prior
permission was envisaged in law for investigation. However, Section 19(1)
of the PC Act, 1988 as well as Section 197 of CrPC envisage prior sanction
of prosecution of a public servant.
- Now the Union government is introducing an official amendment
in the pending legislation The Prevention of Corruption (Amendment) Bill,
2013 (PC Amendment Bill, 2013). Under the proposed Section 8B of the
Amendment Bill, a new Section 17A is sought to be inserted in the
Principal Act as follows:
“17A (1) No police officer shall
conduct any investigation into any offence alleged to have been committed by a
public servant under this Act, where the alleged offence is relatable to any
recommendation made or decision taken by such public servant in the discharge
of his official functions or duties, without the previous approval-
(a) of the Lokpal, in the case of a
public servant who is employed, or as the case may be, was at the time of
commission of the alleged offence employed in connection with the affairs of
the Union, and is a person referred to in clauses (a) to (h) of sub-section (1)
of section 14 of the Lokpal and Lokayuktas Act, 2013;
(b) of the Lokayukta of the State or
such authority established by law in that State under whose jurisdiction the
public servant falls, in the case of a person who is employed, or as the case
may be, was at the time of commission of the alleged offence employed in
connection with the affairs of a State,
Conveyed by an order issued by the
Lokpal in accordance with the provisions contained in Chapter VII of the Lokpal
and Lokayuktas Act, 2013 or the Lokayukta of the State or such authority
referred to in clause (b) for processing of investigation against the public
servant:
Provided that no such approval shall
be necessary for cases involving arrest of a person on the spot on the charge
of accepting or attempting to accept any undue advantage for himself or for any
other person.
(2) Any information received or any
complaint which is made to a police officer or any agency (including the Delhi
Special Police Establishment) in respect of an alleged offence relatable to any
recommendation made or decision taken by a public servant in discharge of his
official functions or duties shall, first, be referred by such police officer
or agency-
(i) in respect of a public servant
referred to in clause (a) of sub-section (1), to the Lokpal;
(ii) in respect of a public servant
referred to in clause (b) of sub-section (1), to the Lokayukta of the State or
such authority referred to in that clause.
(3) Any information or complaint
referred by a police officer or the agency under the subsection (2), shall be
deemed to be a complaint made to-
(a) the Lokpal under clause(e) of
sub-section (1) of section (2) of the Lokpal and Lokayuktas, Act, 2013 and all
the provisions of the said Act shall apply accordingly to such complaint;
(b )the Lokayukta of a State or such
authority established by law in a State, as the case may be, and all the
provisions of the law under which the Lokayukta or such authority has been
established shall apply accordingly to such complaint”.
Implications of the proposed Section
17A:
- This covers all recommendations and decisions of all public
servants in the discharge of their official functions or duties. That
means, except in cases of successful trap, every allegation of corruption
must first be forwarded to Lokpal/Lokayukta for prior approval of
investigation. The police, who have the duty to investigate any and every
crime, including murder, rape, misappropriation, are prevented from
investigating corruption on their own.
- Given the way Lokpal/Lokayukta institutions are structured,
we can have every confidence that each case will be decided on merits. But
there are about 60 lakh public servants of Union government (including
public undertakings and departments), and in many major states there are
over 10 lakh public servants. Overall, there are about 200 lakh or 2 crore
public servants in India. If the CBI and State Anti-Corruption Bureau
(ACB) have to forward each case to Lokpal/Lokayukta before even commencing
investigation, the whole anti-corruption institutional framework will be
jammed and paralysed.
- The proposed Section17A does not even allow a summary,
instant decision by Lokpal/Lokayukta. The amendment specifies that the
Lokpal/Lokayukta must give prior approval conveyed by an order issued in
accordance with the provisions contained in Chapter 7 of the Lokpal and
Lokayuktas Act, 2013. Chapter 7 of the Lokpal and Lokayuktas Act, 2013
envisages an elaborate procedure even for preliminary enquiry. In case of
Lokpal, it may again involve CVC, CBI or Lokpal’s own investigative wing.
Also, even at preliminary stage, the public servant must be given an
opportunity of being heard. The preliminary enquiry may take 90 days or
longer. Only after such an elaborate procedure can Lokpal/Lokayukta accord
approval for investigation.
- This provision ultimately creates enormous hurdles to the
investigation of any corruption offence even in the preliminary stage.
What is needed is speedy sanction of prosecution under Section 19(1) of
the PC Act, 1988 and Section 197 of CrPC, and to ensure that such sanction
power vests in an independent, impartial authority like Lokpal/Lokayukta.
Instead, even powers of investigation are taken away from CBI and ACBs by
the new Section 17A.
- The net result will be tremendous weakening of investigative
agencies, and dilution of Lokpal and Lokayuktas. The Lokpal/Lokayuktas are
intended to be high ombudsmen to hold senior civil servants and highly
placed public servants to account. By bringing every case of corruption
before them even at the allegation stage prior to investigation, the
Lokpal/Lokayuktas lose all relevance as high ombudsmen, and will become
ineffective, overburdened, dysfunctional, slow-moving bureaucracies,
defeating the very purpose of Lokpal legislation.
This provision may not hold its ground
in the court of law with supreme court of india very likely to declare it as
unconstitutional. In fact it is illogical in extending the discredited single
directive to all classes of government employees, retrogressive as it weakens
investigative agencies, burdensome on the institutions of Lokpal/Lokayuktas,
and ultimately counter-productive in combating corruption.
THUS 2 Major concern of the amendment is Section 17A and non distinction of compulsive corruption with collusive corruption. The PCA, even after the amendment, is
expected to suffer from a few pragmatic difficulties. As mentioned above, not
only prosecution but also investigation requires prior sanction, which is
seldom forthcoming and plagued with procedural barriers and red-tapism. This may
result in abysmally low prosecution rates as in the past.
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