The Prevention Of Corruption (amendment) Act, 2018
To combat corruption in government offices, the Prevention of Corruption Act of 1988 (PCA) was passed. In reality, almost 25 years after the Act's first passage in 1988, there has been little change in public perception of India as a corrupt country, as measured by Transparency International's Corruption Perception Index (CPI).
In the aftermath of the 2G and Commonwealth games scam revelations in 2010, the CPI ranked India at a historic low of ninety-fifth place in 2011.India's rank improved to eighty-first out of 180 countries in 2017 as a result of pro-governance policies, technology, and automation of various government processes with public interface (e.g., passports, train tickets, public procurements such as e-tender/e-procurement/e-payments). Despite the fact that the score has improved over time, the perception of corruption at the state, departmental, and local municipality levels has remained largely unchanged.
Because of PCA's limited success, it was necessary to make changes that would help it become more effective. On July 26, 2018, the Prevention of Corruption (Amendment) Act, 2018 went into effect, with the goal of bringing India's anti-corruption legal framework in line with current international practises laid out by the United Nations Convention Against Corruption (UNCAC).
KEY HIGHLIGHTS OF THE AMENDMENT ACT
• The Amendment Act defines 'undue advantage' as any gratification, other than legal remuneration, that is not limited to gratifications that can be measured in monetary terms.
• All remuneration permissible to be received by a public servant is included in legal remuneration. This means that 'undue advantage' extends to non-monetary or non-pecuniary considerations such as gifts and favours that are not monetary in value.
• The Amendment Act stipulates that a special judge must complete a trial for corruption cases within two years of the case being filed. Extensions of time can be granted for up to six months at a time, with written justifications. However, the trial's total duration should not exceed four years.
• The amendment was passed in the hopes that the judiciary would make all reasonable efforts to complete trials within the two-year time limit.
• The Amendment Act, on the other hand, makes no mention of the consequences if corruption cases are not resolved within the specified time frame.
• While it is expected to be impressed upon the investigation agencies that investigations be completed and charge sheets of offences be filed within a reasonable time frame, there are no punitive provisions to act as a deterrent for non-compliance and to ensure that justice is delivered on time.
• Except for the abetment, the PCA did not have a separate provision for bribe givers.
The supply side of bribery and corruption is addressed in Section 8 of the Amendment Act as follows:
a. Anyone who gives/promises any undue advantage to another person in order to induce/reward a public servant for improper performance of a public duty is punishable by up to seven years in prison or a fine, or both.
b. This section does not apply if the person was forced to give undue advantage and reported it to law enforcement agencies within seven days of the undue advantage being given.
c. It makes no difference whether the undue advantage was received directly or indirectly through a third party, or whether it was received by the same person who is to perform or has performed the relevant public duty.
• The above provisions of Section 8 of the Amendment Act are designed to combat collusive corruption, which occurs when a person bribes another to gain unfair advantages in taxation, regulatory matters, and other areas. However, corruption may not be limited to junior employees in certain government departments where a culture of organised corruption has developed.
• Furthermore, there is concern that Commercial Organizations (CO) that report public officials who demand bribes will be targeted by government agencies.
• The overall institutional capacity and strength of law enforcement, prosecuting authorities, and the judiciary become relevant at this point. In comparison to other developed countries, India still has a long way to go in terms of institutional autonomy, independence, capacity, and skill sets to adequately decide such cases on merit.
• The Amendment Act establishes a definition for CO and introduces the concept of corporate liability, which applies to all types of CO. CO includes both a body or partnership incorporated or formed outside India but carrying on business in India, as well as a company or partnership incorporated or formed in India but carrying on business in India.
• If any person(s) associated with the CO gives/ promises to give any undue advantage with the intent to (I) obtain/retain any business or (ii) obtain/retain an advantage in the conduct of business for such CO, the amended section 9 makes the CO guilty and punishable with a fine. Section 9(4) states that the offence under sections 7A, 8 and 9 is cognisable despite anything in the Code of Criminal Procedure, 1973 (2 of 1974).
• This amendment prohibits a CO from claiming that such bribery and corruption incidents are isolated incidents unless it can demonstrate that it had adequate compliance procedures and safeguards in place to prevent its associated persons from engaging in such behaviour.
• The Amendment Act does not define adequate procedures, but it does require the Central Government to develop and publish guidelines to prevent CO associates from bribing public officials.
• Until the Central Government issues guidelines on appropriate procedures, the CO operating in India may rely on similar guidance/notifications issued by international bodies or law enforcement agencies in countries with more developed anti-corruption legal frameworks, such as the United States and the United Kingdom.
The following are some examples of guiding documents on what might be considered "adequate procedures":
a. Resource Guide issued by the Department of Justice (DoJ) and the Securities Exchange Commission (SEC) in the United States on the Foreign Corrupt Practices Act of 1977 ('FCPA').
b. Six Principles of Adequate Procedures as defined by the Bribery Act of 2010 in the United Kingdom
c. Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions by the Organization for Economic Co-operation and Development (OECD)
d. OECD Internal Controls, Ethics, and Compliance Good Practice Guidance
e. ISO 37001 (International Organization for Standardization)
• For prosecution of serving public officials, the PCA required prior approval from the appropriate government. The Amendment Act extends the requirement of prior approval to any investigation, inquiry, or investigation conducted before a prosecution.
• As a result, no police officer may initiate any investigation, inquiry, or investigation against a current or former public servant for an alleged offence (where the alleged offence relates to recommendations or decisions made in the course of his official duties) without the prior approval of the employer government or, in any other case, by authority competent to remove him/her from such office (concerned authority).
• For arrests of public servants on the spot on charges of accepting or attempting to accept any undue advantage, no such approval is required.
• The Amendment Act requires the concerned authority to convey its decision under this section within three months, which may be extended by one month for reasons to be recorded in writing by such authority. This amendment raises concerns about information being leaked to the suspected offender(s) and evidence being manipulated or destroyed.
• This amendment may have the opposite effect in terms of combating corruption, as it could be used by government departments/competent authorities as a mechanism to shield public servants from the initiation of inquiry/inquiry/investigation proceedings, as well as prosecution. In other words, this provision could lead to the investigation/inquiry/investigation of only those public servants who are caught red-handed accepting or attempting to accept any undue advantage.
• The minimum sentence for public servants has been increased from six months to three years, and the maximum sentence has been increased from five to seven years, with or without a fine. The penalty for aiding and abetting crimes has also been increased by the same amount.
• The minimum sentence for a recurring offence has been increased from two years to five years, and the maximum sentence has been increased from seven to ten years, with or without a fine.
• The Amendment Act, on the other hand, does not specify the amount of fines that could be imposed on a CO who is found guilty of violating the Amendment Act.
• The Criminal Law Amendment Ordinance, 1944, shall apply to the attachment or confiscation of money or property obtained by means of an offence under this Act, except as provided under the Prevention of Money Laundering Act, 2002.
|
Sec |
Offence |
Description |
Penalty/Punishment |
|
S. 7 |
Relating to a public servant being bribed |
Any public servant who takes an undue advantage from any person |
Imprisonment of three years to seven years and also liable to a fine |
|
S. 7A |
Taking undue advantage to influence a public servant |
Whoever accepts any undue advantage to induce a public servant to perform improperly |
Cognisable offence — Imprisonment of three years to seven years and also liable to a fine |
|
S. 8 |
Offence relating to bribing a public servant |
Any person who gives any undue advantage to another person with intention to induce a public servant to perform improperly. |
Cognizable offence — Imprisonment up to seven years or fine or both |
|
S. 9 |
Offence relating to bribing a public servant by a CO |
CO commits any of the offence, if any person associated with such organization gives any undue advantage to a public servant. |
Cognizable offence — CO shall be punished with a fine |
|
S. 10 |
Person in charge of CO to be guilty of offence |
If offence u/s. 9 is proved to have been committed with the consent or connivance of any director |
Such person shall be liable to be proceeded against, and imprisonment of three years to seven years and a fine. |
|
S. 11 |
Public servant obtaining undue advantage without consideration |
If a public servant accepts an undue advantage without consideration from any person concerned in proceedings or business transacted or having connections with the official functions of themselves |
Imprisonment of six months to five years and a fine |
|
S. 12 |
Punishment for abetment of offences |
Whoever abets any offence under this Act, whether or not that offence is committed in consequence of that abetment |
Imprisonment of three years to seven years and a fine |
|
S. 13 |
Criminal misconduct by public servant |
Any public servant who commits criminal misconduct as defined under the Act |
Imprisonment of one year to seven years and a fine |
|
S. 14 |
Punishment for habitual offender |
Whoever convicted of an offence, subsequently commits an offence under this Act |
Imprisonment of five years to 10 years and a fine |
|
S. 15 |
Punishment for attempt |
Whoever attempts to commit an offence under section 13 (1) (a) |
Imprisonment up to three years and a fine |