Overview of the changes proposed in the Prevention of Corruption Act 1988
By Jasleen K. Oberoi & Rishabh Sureka
Posted: 27th July 2016 08:00
The offences of bribery and corruption amongst public servants originally stood codified in the Indian Penal Code, 1860. However, these provisions of the IPC were not adequate to cater to the complexity of the offences of corruption and bribery.The need for a specific law dealing with all intricacies of corruption was initially sought to be met by the passing of the Prevention of Corruption Act, 1947. The Prevention of Corruption Act 1947 was amended twice but, despite the amendments, it proved to be inadequate to deal with the increasing diversity of complicated, large-scale instances of corruption involving public servants.
In the above scenario, the Prevention of Corruption Act, 1988 (“PC Act”) was passed by the Parliament in an attempt to widen the coverage of anti-corruption laws. The PC Act sought to incorporate the concept of criminal misconduct as well as widened the punitive powers in relation to the offence of corruption by enabling attachment of wealth obtained though corrupt means, etc. and today is the authoritative anti-bribery statute in India.
United Nations Convention Against Corruption
In May 2011, India ratified the United Nations Convention Against Corruption (hereinafter “UNCAC”) which was adopted by the United Nations vide General Assembly Resolution 58/4 on 31 October 2003. The UNCAC is aimed at preventing and controlling corruption, and also achieving cooperation amongst nations in the context of controlling and preventing corruption.
Prevention of Corruption (Amendment) Bill, 2013
The ratification of the UNCAC meant that there was a need to bring India’s laws against corruption in line with international practices (more specifically the UK Bribery Act, 2010 and the United States’ federal statute on corruption, i.e., the Foreign Corrupt Practices Act, 1977). The Indian Parliament consequently proposed the Prevention of Corruption (Amendment) Bill, 2013 (hereinafter “the Bill”) which is, inter alia, aimed at making private individuals and organisations liable for giving bribes to public servants. The Bill seeks to accomplish this by substituting Sections 8, 9 and 10 of the PC Act and the substitution corresponds to Article 12 and Article 15(a) of the UNCAC.
The Bill proposes a comprehensive definition which covers all aspects of passive bribery by inter alia, broadening the scope of solicitation and acceptance of bribe through intermediaries and acts of public servants acting outside their competence
The Bill also proposes amendments to provide for attachment of money or property acquired through bribery or money or property equivalent to value of money or property acquired through bribery by proposing to add Chapter IV-A to the PC Act which correspond to Article 31 of the UNCAC.
Proposed Amendments
The Bill was first introduced in the Upper House [Rajya Sabha] on 19 August 2013 however as no consensus could be reached over several provisions of the Bill, a need to further amend the Bill was felt. This amended version of the Bill was recirculated by the Government on 27 November 2015 and is yet to be moved in and ratified by the Rajya Sabha.
The amendments that are sought to be introduced by way of the Bill are set out herein below in brief:
Taking of bribe:
A Public Servant is liable under this offense, in case he obtains or agrees to receive/accept or attempts to obtain an undue advantage for performing a public function improperly or for a public function which has been already performed improperly or which has been performed in an improper manner in anticipation of an undue advantage.
The punishment provided for improper performance of a public function is three to seven years along with a fine.
The only exception to this offence is when the concerned act has not been done dishonestly.
Giving of bribe:
The offence of giving bribe is defined as offering or promising to give an undue advantage to ‘another person’ with the intention of inducing or rewarding a Public Servant for improper performance of his public duty.
Even the offering of an undue advantage to a public official, knowing that such acceptance would qualify as performing his public duty improperly would come under the offence of ‘giving a bribe’.
An exception to the rule is that giving of bribe which is done so after informing a law enforcement authority or investigating agency in order to provide assistance to such body in its investigation of the offence against a public servant.
The punishment for a giving or taking a bribe is from 3-7 years along with a fine.
Commercial organisation
A commercial organisation can now be found guilty of an offence and shall be punishable with fine, if any person associated with the commercial organisation offers, promises or gives an undue advantage to a public servant in return for obtaining or retaining any business or any advantage in the conduct of business.
If a commercial organisation is found guilty of bribing a public servant and such offence is proved to have been committed with the consent or connivance of any director, manager, secretary or other officer of the commercial organisation, then such director, manager, secretary or other officer of the commercial organisation shall also be guilty of the offence and shall be liable to be proceeded against and punishable for a term of not less than three years which can be extendable up to seven years along with a fine.
Criminal Misconduct
The offence of criminal misconduct has been redefined to include: (i) dishonest or fraudulent misappropriation of any property entrusted to him or under his control as a public servant; and (ii) intentional enrichment by illicit means during the time period in which the public servant was in office.
In cases of the offense of intentional enrichment by illicit means, there exists a presumption that the public servant intentionally enriched himself if the public servant is in possession of property that is disproportionate to his known sources of income. This creates an obligation on the accused person to lead evidence in relation to the enrichment.
Prior Approval
Section 19 of the PC Act safeguards a public servant from vexatious prosecution for any bona fide omission or commission in the discharge of his official duties by requiring prior sanction to be obtained for prosecution of public servants who are employed with the affairs of the Union or State and who are not removable except by or with their sanction. The Bill seeks to extend the safeguard contained in Section 19 of the PC Act to those persons who were employed as public servants at the time of the commission of the alleged offence.
The Bill has introduced another set of sanctions required before the Police can initiate any investigation against a public servant, where the alleged offence is relatable to any recommendation made or decision taken by such public servant in discharge of his official functions or duties. In such a situation the approval of the relevant authority under the Lokpal and Lokayuktas Act, 2013 would be required to commence investigation.
Trial period
The Bill proposes a time restriction on the trial, i.e. trial has to be completed within two years, extendable to a maximum period of four years.
Conclusion/ Summary
The proposed amendments to the PC Act seek to bring India in line with its international obligations as per the UNCAC and seek to ensure that vital elements of the Foreign Corrupt Practices Act and UK Bribery Act that were hitherto not covered by the PC Act are incorporated in the Indian regime governing prevention of corruption.
The Bill also aims to bring about a strong and effective deterrent to corruption qua not only the bribe taker, i.e. public servants but also the bribe giver, i.e. private bodies including ‘commercial organisations’. The Bill therefore attempts to disincentivise the bribe giver in addition to the public servant receiving the bribe, by bringing commercial organisations specifically within its ambit the Bill actively seeks to discourage luring of public servants with any kind of unlawful gratification.
The Bill attempts to make the PC Act more robust , practical and in touch with international norms and as and when it is finally passed , is likely to have a far reaching impact on Indian civil society and the way business is conducted in India.
Ms. Jasleen K. Oberoi is a Partner with the firm and specialises in Dispute Resolution, Commercial Arbitrations, Corporate Litigation and General Corporate Advisory.
Jasleen has special expertise in Economic Offences, Forensic as well as Internal Investigations, prosecutions, advisory in relation to anti-bribery and anti-corruption issues/allegations. She has also advised extensively on Foreign Corrupt Practices Act (“FCPA”) and the UK Bribery Act.
Jasleen services a wide range of international and domestic clients involved in high profile and appears in a variety of forums across various jurisdictions.
Jasleen can be contacted on + 91 9717098085 or by email at jasleen.oberoi@AMSShardul.com
Mr. Rishabh Sureka specialises in Dispute Resolution and Litigation Practice under the able guidance of Ms. Jasleen K. Oberoi, Partner. Rishabh has experience in handling contractual, corporate and commercial disputes across a range of sectors and across issues such as consumer litigation, writ petitions and white collar crime, among others.
Rishabh can be contacted on + 91 9910014063 or by email at rishabh.sureka@AMSShardul.com
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