Anti-Corruption Laws
Legal Framework of Anti-Corruption Laws In India
- The Prevention of Corruption Act, 1988 (PCA): This act is the primary legislation in India that penalizes bribery and corruption. This Act specifies certain activities that constitute offences and provides for prosecution for those offences.
- The Foreign Contribution Regulation Act, 2010 (FCRA): This act regulates aspects relating to donations by a foreign source. This legislation plays a crucial role in preventing corruption by regulating the acceptance and utilization of foreign contributions. There are certain disclosure requirements to be followed by the organizations. It also prohibits the receipt of foreign contributions for any activities detrimental to national interest.
- Central Civil Service Conduct Rules, 1964: These rules 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 receiving gifts, dowry, restrictions on acquisition and disposal of immovable property outside India. Violation of these rules can result in major penalties including dismissal from service.
- All India Civil Services Conduct Rules, 1968: These rules specifically apply 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): This Act aims to prevent and control money laundering. By implementing stringent measures and monitoring financial transactions, it aims to disrupt the flow of illicit funds that could be used for corrupt purposes. It also allows for the confiscation and seizure of property obtained from laundered money.
- Bhartiya Nyaya Sanhita, 2023 (BNS): This code 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 has also ratified the United Nations Convention on Transnational Organized Crime in 2011, which is 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, related corruption, and obstruction of justice.
Major Amendments
- The Prevention of Corruption (Amendment) Act, 2018: The Amendment Act defines ‘undue advantage’ as any gratification other than legal remuneration, not limited to monetary terms. This includes non-pecuniary considerations such as gifts and favours that cannot be measured in money terms. The Amendment Act has also specified the timeline for completion of trial by mandating that trials for corruption cases be completed by a special judge within two years from the date of filing the case. The PCA did not have a separate provision for giver of bribe except for the abetment. 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. Punishment provisions were also strengthened by the aforesaid amendment.
- Foreign Contribution Regulation Act, 2010: Some key changes were introduced in the Act in 2020. Under Section 7, Recipients of foreign contributions are now prohibited from transferring the same to any other entity. Under Section 8, 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 Rs 10 lakh annually from their relatives abroad under the FCRA, up from the previous limit of Rs 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, there were amendments related to acceptance of gifts by government servants
- All India Services Conduct Rules, (1968): Some amendments were introduced in 2014. These amendments emphasize ethical conduct, accountability, and professionalism among civil servants, aiming to enhance public trust and efficient governance.
- Prevention of Money Laundering Act, (2002): The Finance Act, 2019 introduced significant amendments to the PMLA. One crucial change was the insertion of an “Explanation” to Section 3 of the Act. This clarification aimed to address ambiguity that 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 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 in order 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. The same penalty applies to a public servant who takes gratification for exercise of personal influence with a public servant.
- Abetment by a public servant of offences defined in Section 8 or 9 of the Act is punishable with imprisonment for a term which shall be not less than six months but which may extend to five years.
- 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 which shall be not less than six months but which may extend to five years.
- Punishment for abetment of offences defined in Section 7 or 11 of the Act is punishable with imprisonment for a term which shall not be less than three years but which may extend to seven years.
- Any public servant who commits ‘criminal misconduct’ can be punished with imprisonment for a term which shall be not less than one year but which may extend to seven years. Habitual committing of offences under Section 8, 9 and 12 of the Act is punishable with imprisonment for a term which shall be not less than two years but which may extend to seven years.
- 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 three to seven years.
- Central Civil Services Conduct Rules, (1964): Dishonesty, untrustworthiness, theft and fraud are instances of criminal misconduct under these rules. The punishment for such misconduct is minimum one to seven years. They may also be liable to fine.
- 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 Rs. 10,000/-. The penalty for defraying foreign contribution beyond twenty percent of the contribution received for administrative expenses is one lakh or five percent of the foreign contribution received, whichever is higher. Similarly, several offences are listed down where the corresponding penalties ranges from 10,000/- to one lakh.
- All India Services (Discipline and Appeal Rules), 1969: These rules are framed in 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 six years imprisonment accompanied with fine. Organized crime includes unlawful activities economic offences and land grabbing. The minimum punishment for which is imprisonment for five years.
How to Report an Illegal Demand for Bribery?
- Every Ministry or department of the government has its own 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 enquiries to be conducted into offences 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 on 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 are displayed on the website. Informant/complainant may lodge written complaint by giving details of corruption practices of a corrupt public servant personally at Anti-Corruption Police Stations at District Level or at ACB Headquarter of the concerned state. Some states have e-mail and WhatsApp provisions for filing the complaints.
How Can Seasoned Advocates Help You?
On the basis of the facts presented by the clients expert lawyers can effectively deal with such cases in the following ways:
- 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.
- Scrutiny of the Recording and Transcript: The recording and transcript on the basis of which the accused was implicated will be carefully analysed with respect to its 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 inquired.
- Examination of Complete Evidence: The documentary evidence, the evidence of the witnesses and reports made by the Anti-Corruption Department, Special Wing will be carefully analysed and examined to find out inconsistencies and variations between them. More often than not, there are some inconsistencies and variations at this stage that invariably 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 hardly visible to the naked eye. Questions pertaining to how was it stored or whether safety measures as mentioned in the ACB Manual were followed need to be analysed and discussed.
- Post-trap Proceedings: There could be several variations in post-trap proceedings. Seasoned lawyers will delve into issues like correspondence with the sanctioning authority before sanction for prosecution was gives. 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, there are several possible loopholes in the investigation that will be used effectively by competent lawyers to substantially weaken the case. In such cases, there are loopholes in investigations like taking statement of witnesses and complainant without verification. Several ways and means could be utilised by seasoned lawyers to jeopardise the prosecution case.
Conclusion
The Prevention of Corruption Act,1988 is the very foundation of anti-corruption law in India. Prosecution and subsequent conviction under this legislation is marred by lengthy step by step documentation and investigations. There are too many nitty-gritties that may not be visible to the layman but could be understood by a competent lawyer. It has to be noted that the conviction rate under this legislation is comparatively lower than the conviction rates for other offences under other laws. To know more, contact us.