Anti-Corruption Laws

Legal Framework of Anti-Corruption Laws In India

• The Prevention of Corruption Act, 1988 (PCA): Primary legislation in India that penalizes bribery and corruption. This Act specifies certain activities that constitute offenses and provides for the prosecution of those offenses.
• The Foreign Contribution Regulation Act, 2010 (FCRA): It regulates aspects relating to donations from foreign sources. This legislation plays a crucial role in preventing corruption by regulating the acceptance and utilization of foreign contributions. Certain disclosure requirements are to be followed by the organizations. It also prohibits the receipt of foreign donations for any activities detrimental to the national interest.
• Central Civil Services (Conduct) Rules, 1964: Apply to every person appointed to a civil service or post in connection with the affairs of the Union. These rules cover various aspects, including the receipt of gifts, dowry, and prior permission for the acquisition and disposal of immovable property, including those that are located outside India. Violation of these rules can result in major penalties, including dismissal from service.
• All India Civil Services (Conduct) Rules, 1968: Specifically applied to members of the All-India Services (IAS, IPS, IFS). The Prevention of Corruption Act, 1988, complements these rules in addressing corruption charges.
• Prevention of Money Laundering Act, 2002 (PMLA): Aims to prevent and control money laundering. By implementing stringent measures and monitoring financial transactions, it aims to disrupt the flow of illicit funds from various sources, including corruption. It also allows for the confiscation and seizure of property obtained from laundered money.
• Bhartiya Nyaya Sanhita, 2023 (BNS): Replaces the Indian Penal Code, 1860. It contains several notable provisions relating to corruption, like dishonest misappropriation of property, organized crime, and corruption in elections. 

International Framework 

• The United Nations Convention against Corruption (UNCAC) is the only legally binding universal anti-corruption instrument.
• India also ratified the United Nations Convention on Transnational Organized Crime in 2011, the first comprehensive and globally binding instrument to fight transnational organized crime. States that ratify it commit to various measures, including criminalizing participation in organized criminal groups, money laundering in transactional organized crimes, including those related to corruption, and obstruction of justice. 

Significant Amendments

• The Prevention of Corruption (Amendment) Act, 2018: Defines ‘undue advantage’ as any gratification other than legal remuneration, not limited to monetary terms. This includes non-pecuniary considerations, such as gifts and favors that cannot be measured in monetary terms. The Amendment Act has also specified a timeline for the completion of trials, mandating that trials for corruption cases be completed by a special judge within two years from the date of filing the case. Section 8 of the amendment addresses the supply side of bribery and corruption. Further, the Amendment Act also defines corporate liability, covering all its categories. The amendment also strengthened punishment provisions.
• Foreign Contribution (Regulation) Act, 2010: Some key changes were introduced in the Act in 2010. Under section 7, Recipients of foreign contributions are now prohibited from transferring the same to any other entity. Under section 8 of the 2020 Amendment Act, the limit for using foreign contributions for administrative expenses was reduced from 50% to 20%. This change aims to ensure that a larger portion of foreign funds is directed toward the intended beneficiaries rather than administrative overhead. Indians can now receive up to ₹ 10 lakh annually from their relatives abroad under the FCRA, up from the previous limit of ₹ 1 lakh. If the amount exceeds this limit, individuals have 90 days to inform the government.
• Central Civil Service (Conduct) Rules, 1964: Over time, there have been amendments to the Central Civil Services (Conduct) Rules. For instance, in 2011, amendments were made related to the acceptance of gifts by government servants.
• The All India Services (Conduct) Rules, 1968: Some amendments were introduced in 2014. These amendments emphasize the importance of ethical conduct, accountability, and professionalism among civil servants, aiming to enhance public trust and promote efficient governance.
• Prevention of Money Laundering Act, 2002: The Finance Act, 2019, introduced significant amendments to the Prevention of Money Laundering Act, 2002. One crucial change was the insertion of an 'Explanation' to section 3 of the Act. This clarification aimed to address the ambiguity that had existed earlier. The Explanation clarified that a person would be guilty of money laundering if they were directly or indirectly involved in any of the processes, like possession, acquisition, use, projecting, and/or claiming as untainted property connected with proceeds of crime. The 2019 Amendment also expanded the scope of the PMLA by including practicing chartered accountants, company secretaries, and cost and works accountants who carry out financial transactions on behalf of their clients. To improve its effectiveness in detecting and preventing money laundering and other financial crimes, the 2019 Act introduced more nuanced reporting obligations for reporting entities. 

Penalties for Violating Anti-Corruption Laws

• The Prevention of Corruption Act, 1988: The penalties for violating the anti-corruption laws in India can be severe. Under the Prevention of Corruption Act, 1988. A public servant who takes gratification to influence a public servant by corrupt or illegal means can be punished with imprisonment for a term which shall be not less than three years but which may extend to seven years and shall also be liable to a fine. The same penalty applies to a public servant who takes gratification for the exercise of personal influence over a public servant.
  
  • Abetment of offenses defined in sections 8 and 9 of the Act is punishable with imprisonment for a term which shall be not less than three years but which may extend to 7 years, and shall also be liable to a fine as per the 2018 Amendment Act.
  • A public servant who obtains a valuable thing without consideration from a person concerned in a proceeding or business transacted by such public servant can be punished with imprisonment for a term that shall be not less than 6 months but which may extend to 5 years, and shall also be liable to a fine.
  • Punishment for abetment of offenses under section 12 defined in Sections 7 and 11 of the Act is punishable with imprisonment for a term which shall not be less than 3 years but which may extend to 7 years, and shall also be liable to a fine.
  • Any public servant who commits ‘criminal misconduct’ can be punished with imprisonment for a term which shall be not less than 4 years but which may extend to 10 years and shall also be liable to a fine.
  • Habitually committing offenses under Sections 8, 9, and 12 of the Act is punishable with imprisonment for a term which shall be not less than 5 years but which may extend to 10 years and shall also be liable to a fine.
• The Prevention of Money Laundering Act, 2002: Prescribes the penalty for money laundering. It states that if someone is found guilty of money laundering, they can be punished with rigorous imprisonment ranging from 3 to 7 years and shall also be liable to a fine.
• Central Civil Services (Conduct) Rules, 1964: Dishonesty, untrustworthiness, theft, and fraud are instances of criminal misconduct under these rules. The penalty for such misconduct is a reduction in pay, demotion, suspension, dismissal, etc.
• Foreign Contribution Regulation Act, 2010: Several penalties can be imposed under the provisions of the Act. The punishment prescribed for accepting any hostility in contravention of the Act is imprisonment for a term that may extend up to 5 years, or a fine, or both. There is a penalty for defraying foreign contributions beyond 20 % of the contribution received for administrative expenses.
• All India Services (Discipline and Appeal) Rules, 1969: These rules are framed in the exercise of powers conferred by the Central Government by the All-India Services Act, 1951. The punishment prescribed for illegal gratification is dismissal from service to the extent of disqualification from future employment.
• Bhartiya Nyaya Sanhita, 2023: The punishment for Dishonest Misappropriation of Property (Section 314) is imprisonment for a minimum of 6 months and up to 2 years, accompanied by a fine. Organized crime includes unlawful activities, economic offenses, and land grabbing. The minimum punishment for this is imprisonment for five years.

How to Report an Illegal Demand for Bribery?

• Every Ministry or department of the government has its vigilance officer, the details of which are given on the website. Complaints can be filed via e-mail. Vigilance Complaints must be brief and contain verifiable facts and factual details. It should not be vague or contain sweeping general statements/absurd allegations.
• The Central Vigilance Commission (CVC) is the primary agency responsible for enquiring into and causing inquiries to be conducted into offenses related to corruption and bribery. The CVC is responsible for advising, planning, executing, reviewing, and reforming vigilance operations in central government organizations. Complaints can be filed directly by logging in to its portal. Complaints can also be lodged with the commission by addressing a written communication/letter to the secretary.
• Every state government has its own Anti-Corruption Bureau, the details of which can be found on the respective state government's website. The informant/complainant may lodge a written complaint by giving details of the corruption practices of a corrupt public servant personally at Anti-Corruption Police Stations at the District Level or ACB Headquarters of the concerned state. Some states have e-mail and WhatsApp provisions for filing complaints.

How Can Seasoned Advocates Help You?

• Legal Advice: Immediate legal opinion can help you to present your defense better before the authorities and help you to deal with the situation.  
• Scrutiny of the Initial Report: The initial complaint filed by the complainant is very likely to contain some inconsistencies, and its scrutiny can help you in your case.
• Scrutiny of the Recording and Transcript: The recording and transcript, based on which the accused was implicated, will be carefully analyzed concerning their preparation and the circumstances under which it was prepared. In this context, the format and the properties of the stored audio file will be carefully examined.
• Examination of Complete Evidence: The documentary evidence, witness testimony, and reports from the Anti-Corruption Department's Special Wing will be carefully analyzed and examined to identify inconsistencies and variations between them. More often than not, some inconsistencies and variations at this stage weaken the case.
• Inconsistencies in Pre-trap Proceedings: In ACB traps, currency notes are treated with phenolphthalein powder. This powder adheres to the notes’ surface but is hardly visible to the naked eye. Questions regarding how it was stored and whether safety measures mentioned in the ACB Manual were followed need to be analyzed and discussed.
• Post-trap Proceedings: There could be several variations in post-trap proceedings. Delve into issues such as correspondence with the sanctioning authority before granting sanction for prosecution. In case the sanctioning authority does not reply to such correspondence, it could be questioned explicitly. Pressure mounting techniques by the ACB will also be highlighted.
• Representation in Court: In addition to the above aspects, several possible loopholes in the investigation may be used effectively to weaken the case substantially. In such cases, there are loopholes in investigations, such as taking the statements of witnesses and complainants without proper verification. Several methods could be employed to undermine the prosecution's case. 

Conclusion

The Prevention of Corruption Act, 1988, is the very foundation of anti-corruption law in India. The laws, rules, and regulations mentioned above are the foundation for preventing corruption in India. Prosecution and subsequent conviction under this legislation are marred by lengthy step-by-step documentation and investigations. There are too many nitty-gritty details that may not be visible to the layman but could be understood by a competent lawyer. Anti-corruption laws work on the principle of 'presumption of law', and special courts hold the trials. A negligent approach in the trial may lead to severe penalties. To know more, contact us.