Introduction:
India has a long list of strict laws to combat corruption. But it is a widely accepted notion that the practice of corruption is normal and accepted in the public sector. Rising awareness and protests against corruption by the public has pushed the government to make certain significant changes in the country’s anti-corruption laws. Numerous cases of extreme corruption on the part of high-profile public officials has led to an uproar in different classes of the society against corruption since 2011.
Since then, a number of measures were introduced and adopted to counter corruption in the system. One of the most recognized measures was the introduction of the Lokpal. The purpose of the Lokpal is to look into the affairs of corrupt officials and prosecute them irrespective of their post. The introduction of Lokpal has helped in building a strong anti-corruption structure in India. Apart from strengthening laws, officials have also begun to follow and implement strict anti-corruption practices and are supervised by the courts.[1]
The chief legislation responsible for ensuring the absence of corruption in the country is the anti-corruption Act, 1988. The Prevention of Corruption Act, 1988 aims to penalize the offense of giving or taking unjustified advantage to and by public officials in their normal course of duty. The act aims to penalize both individuals as well as organizations.
The anti-corruption laws in India mainly penalize only public officials for the offense. Public officials can be held for corruption under numerous acts such as the Indian Penal Code, 1860, Benami Transactions (Prohibition) Act, 1988, Prevention of Money Laundering Act, 2002, and most importantly, under the Prevention of Corruption Act, 1988. These legislations criminalize different acts that lead to or indirectly are corrupt.[2]
Origin of Anti-Corruption in India
Corruption is not a new issue in the administrative bodies of India. The prevention of the Corruption Act was introduced in 1988 but the concept of anti-corruption existed way before this legislation came into existence. India’s battle against corruption has led to the introduction, amendment, and striking out of a number of legislations.
The presence of the offense of corruption seems to exist in texts as old as the Rig Veda, a very sacred Hindu text. Corruption during the British Rule was dealt with by several measures that ensured that public servants or public officials don’t receive or accept gifts or bribes from the public in return of them performing their duties.
The second world war led to a lot of chaos due to a shortage of necessities in the country. This shortage gave rise to a giant wave of corruption among public officials. This large-scale corruption continued to exist even after the second world war. This led to the legislative officials to come up and enact a statute to curb the corruption menace. During the British rule, corruption was kept in check mainly through the provisions of the Indian Penal Code, 1860.
The very first law specifically attending to matters relating to corruption was passed in 1947. Numerous factors gave rise to the problem of corruption among Indian public officials. Some of these factors included low salaries of the officials, rigid and complicated taxing systems, discretionary powers, and opaque laws with very little transparency. These factors only aggravated the corruption in the system and to an extent, helped in normalizing it.[3]
Since then numerous legislations have come into existence to abolish corruption such as the Benami Transactions (Prevention) Act, 1988, and the Prevention of Money Laundering Act, 2002.
Prevention of Corruption Act, 1947
The introduction of the Prevention of Corruption Act, 1947 was the first step taken by the legislative to counter corruption. But this law did not attempt to redefine the offenses but rather adopted the definitions provided in the Indian Penal Code, 1860. It also adopted the definition of the term “public servant” from the Indian Penal Code, 1860.[4]
Although, this act did actually redefine a new offense relating to corruption namely, Criminal Misconduct in Discharge of Official Duty. The punishment for this offense was also increased to imprisonment for a period of one to seven years. The act also shifted the burden of proof to the defendant, leaving the public officials guilty until proven innocent.
This act was then replaced by the Prevention of Corruption Act, 1988 which aimed at creating more effective laws to regulate and curb corruption in the system.
Indian Penal Code, 1860
The Indian Penal Code, 1860 can be considered as one of the primary legislation for the prohibition and regulation of corruption in the country. During British rule, all offenses relating to corruption were dealt with by the Indian Penal Code, 1860. The IPC provided the definitions to a number of important terms in the context of anti-corruption such as “Public servant”[5] and also defines other offenses relating to the same.
A few of the provisions of the Indian Penal Code criminalizing activities related to corruption are mentioned in Sections 169 and 409, etc. Section 169 elaborates on the unlawful purchase or bidding on a property by a public official. If a public servant is charged with the commission of this offense, he can be sentenced to imprisonment up to a period of two years or fine or both and any property bought by such public official ought to be seized.
Section 409 of the Indian Penal Code, 1860 provides for the offense of Criminal Breach of Trust by a Public Servant.[6] Any public official charged with offense could be sentenced to life imprisonment or imprisonment for a period of up to ten years along with fine.
The provisions relating to corruption in the IPC have been through numerous amendments throughout the years but still hold a significant position in the anti-corruption laws of India.
Prevention of Corruption Act, 1988
The Prevention of Corruption Act, 1988 received the assent of the President on 9/9/1998. This legislation forbade corruption in the forms of bribing, money laundering, accepting or giving bribes to foreign officials, extortion, and other ways of abuse of position and power.[7]
The Prevention of Corruption Act, 1988 was enacted mainly to deal with the following offenses by public officials:
- Accepting money or things of monetary value in exchange of performance of their official duty
- Criminal Misconduct by public officials by repeatedly taking bribes in exchange for providing an advantage to a party through their power or post.
- Accepting gifts or monetary gifts from parties who are in business with the public official without any consideration.
- Accepting gifts from the public officials obtained through the abuse of power by the public official.
- Helping the public official or any other party indulge in the above-mentioned activities.
The Act also expanded the definition and scope of the term “Public Servant” against that provided in the IPC. The term “Public Servant” also includes heads/members of cooperative societies and receives funds from the government, banks[8] , and even universities receiving aids from the government.
In addition to the categories included in the IPC, the definition of “public servant” includes office bearers of cooperative societies receiving financial aid from the government, employees of universities, Public Service Commission, and banks. In a famous case concerning banks and their CEOs, the Hon’ble Court held that these officials did come under the purview of “Public Servant” as per the Prevention of Corruption Act, 1988 and thus, were liable for corruption.[9]
According to this Act, if a public official receives and accepts anything other than his salary for the providing the services he is bound to provide while holding his post, he will be sentenced to imprisonment for a period of 6 months to 5 years along with fine. This Act also criminalizes the act of accepting money or any other gratification to influence public opinion and the other party for them
It is essential to obtain prior permission from the government before proceeding with the prosecution of the concerned public official. The actual giving or receiving of a bribe is immaterial.
The attempt at bribing or receiving a bribe is enough for conviction under the Prevention of Corruption Act, 1988. This act also provides for a limitation in terms of time within which the courts are required to complete the trial. This time period is for two years which can be extended up to four years.
All offenses punishable under the Prevention of Corruption Act, 1988 are to be investigated by the Central Bureau of Investigation (known as the CBI) if the action to be taken is against an official of the central government or the anti-corruption branches of the police of every state of committed by a state official.[10]
On 24th July 2018, the parliament passed the Prevention of Corruption (Amendment) Bill 2018 to increase transparency in the operations of the government to hold the government more accountable for the consequences of their actions.
Prevention of Money Laundering Act, 2002
The Prevention of Money Laundering Act was introduced in 2002 to counter corruption in India. According to the Prevention of Money Laundering Act, 2002, a person commits the offense of money laundering if they are a party to any crime and obtain a portion of the proceeds of such crime. This crime could be related to a lot of things and has a wide scope.
The Prevention of Money Laundering Act, 2002 provides for the punishment for such offenses to be rigorous imprisonment for a period between three years to seven years along with a fine of up to five Lakhs. The Adjudicating Authority, which is appointed by the central government or any other authority appointed thereof, shall decide whether any of the property attached or seized is involved in money laundering. An Appellate Tribunal shall hear appeals against the orders of the Adjudicating Authority and any other authority under the Act.
This act requires all financial institutions of all kinds to maintain records containing details of all monetary exchanges and transactions meticulously. These records must include all details of the said transactions including the amount and nature of the transactions and must include all customers. These records must be communicated to the concerned supervisors or authorities from time to time.[11]
The Benami Transactions (Prohibition) Act, 1988
The concept of Benami Transaction has existed for a long time. But by the 1960s, Benami Transactions had earned a bad name in the Indian Society. This is because a significant number of people tried avoiding tax through such transactions and were benefitted unlawfully. The Law Commission report which was set up in the 1970s, suddenly suggested the enactment of the Benami Transactions Prohibition Act in the year 1988.
This gave rise to the current legislation, The Benami Transactions (Prohibition) Act, 1988 which was later renamed as the Prohibition of Benami Property Transactions Act by Section 3 of the amendment of 2016.[12] This act was passed by the parliament for the purpose of criminalizing some types of transactions that led to a rise in corruption in India. According to the act, a Benami transaction refers to a transaction by one person where the consideration for the said transaction is paid by another person.[13] These transactions usually occurred in the case of purchasing properties and in a way backed the black market in India. According to the Act, all transactions of Benami Nature are illegal and the government has the power to confiscate and withhold the concerned property without any reimbursement to the convict.[14] The punishment for entering into a Benami transaction can be imprisonment of a period up to three years along with fine.
Important Cases
Despite the existence of such stringent laws, corruption in India continues to exist and grow, even. Some of these cases have made international headlines bringing the country to shame. Some of the High-Profile money laundering and corruption cases in India are mentioned below:
- The 2G Spectrum Case
The 2G scam can be called one of the most famous cases under the Prevention of Corruption Act. The UPA govt allegedly allotted telecom spectrum through corrupt and unlawful measures for a price that was lower than the market value. This involved a huge sum of 1,76,000 Crore Rupees. Eventually, a case was filed and charges were framed under the Prevention of Corruption Act, 1988.
- The Common Wealth Games Scam
In 2010, It was found that less than half the amount allotted for the organization and hosting of the Common Wealth Games (70,000 Crores) was actually spent on Indian Participants. The government was held for money laundering and misappropriation of funds by showing payment done to non-existent parties, increased rates, etc.
- Indian Coal Allocation Scam
The Indian Coal Allocation Scam, famously known as the Coalgate Scam involved the laundering of about 1,85,591 Crores. It was found that Coal Blocks were allotted to Private Companies through corrupt means. Later, the Hon’ble Supreme Court canceled all the allocations to have the Coal Blocks re-allotted.
- The Telgi Scam
This infamous scam involved the laundering of around 20,000 Crore rupees. Abdul Karim Telgi, the man behind the scam had printed fake stamp papers and traded them with banks and other organizations. It was clear that such a big scam operation could not be carried out without the help and support from government officials and departments as it involved the forgery of very high-security stamps.
- The Bihar Fodder Scam
This scandal, also known as the 24-year-old “Chara Ghotala” case, involved extensive embezzlement of money meant for providing fodder for animals in farms. In this corruption scandal involving more than Rs.900 crore, it was found that fake bills and evidence showing that fodder and medicine were provided to fake livestock were made to cover up for payments that were never made.
Conclusion and Suggestions
There are more than enough stringent laws in India to counter corruption. Yet, the country suffers due to corruption at all levels and all departments of the government and poses to be one of the biggest threats to the development of the country since this offense affects poor people the most who are unable to take any action against powerful public officials.
But it is fair to say that previous measures to curb corruption in the country have had a major impact but not sufficient for a significant drop in the cases of corruption. The Indian Legal system also faces numerous issues while dealing with cases related to corruption by public officials. But there seem to be no laws that provide for or even criminalize corruption in the private sector. Delays in the justice system, lack of witness protection leading to hostile witnesses against public officials, and delayed and ineffective system of asset recovery are some aspects that require immediate attention and reforms by the lawmakers of the country.[15]
The issue of corruption in India and its administrative system has seen a lot of improvement and progress in the past few decades. The trend needs to continue. Stricter laws, better officials, and better professionals to prosecute corrupt officials need to continue to strive to make India an anti-corruption nation and for this, development in a variety of areas needs to keep intensifying.
References:
[1] India – The Anti-Bribery and Anti-Corruption Review – Edition 8 – TLR – The Law Reviews Thelawreviews.co.uk, https://thelawreviews.co.uk/edition/the-anti-bribery-and-anti-corruption-review-edition-8/1210819/india#:~:text=i%20Regulation%20of%20public%20bribery,an%20offence%20under%20the%20PCA.
[2]Prsindia.org, Https://www.prsindia.org/sites/default/files/parliament_or_policy_pdfs/1302844978_PRS%20Note%20on%20corruption%20laws.pdf
[3] Using history to understand corruption in India | Country pages | Relocate magazine Relocatemagazine.com, https://www.relocatemagazine.com/news/enterprise-using-history-to-understand-corruption-in-india
[4] Section 2, The Prevention of Corruption Act. 1947.
[5] Section 21, Indian Penal Code, 1860.
[6] Section 409, Indian Penal Code, 1860.
[7] U4.no, https://www.u4.no/publications/overview-of-corruption-and-anti-corruption-efforts-in-india.pdf
[8]Central Bureau of Investigation Vs. Ramesh Gelli and others, (2016) 3 SCC 788.
[9] Id.
[10] India – The Anti-Bribery and Anti-Corruption Review – Edition 8 – TLR – The Law Reviews Thelawreviews.co.uk, https://thelawreviews.co.uk/edition/the-anti-bribery-and-anti-corruption-review-edition-8/1210819/india#:~:text=i%20Regulation%20of%20public%20bribery,an%20offence%20under%20the%20PCA.
[11] Supra Note 2.
[12] The Benami Transactions (Prohibition) Amendment Act, 2016
[13] Wayback Machine Web.archive.org, https://web.archive.org/web/20130812221150/http://finmin.nic.in/law/Benami%20Transaction_Prohibition_%20Act1988.pdf
[14] Benami Act provisions to come into force from 1 November Livemint, https://www.livemint.com/Politics/kl34fv6i685B7r5u0NkEQK/Benami-Act-provisions-to-come-into-force-from-1-November.htm
[15] Unafei.or.jp, https://www.unafei.or.jp/publications/pdf/RS_No77/No77_12PA_Jain.pdf
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