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Anti-Corruption Laws in India with Recent Judicial Pronouncements: A Complete Guide

That corruption has always been a potential threat to the growth and prosperity of any Nation since inception, as it allows the outflow of national resources either to some foreign country in the form of benami transactions and illegal assets or storage of black money in the country itself without the knowledge of government, in both the situations the economy and growth of the country or place is badly hampered.

That according to the Merriam Webster Dictionary the word "Corruption" means 'A dishonest or illegal behavior especially by powerful people such as government officials or police officers'. It is pertinent to note here that special emphasis has been laid down on the corruption by powerful people as it is a settled position that generally a person in power is in a better position to exert his influence, abuse his power to commit the offence of corruption, like any Government Official or Politician as he is having that public exposure and control over public funds so they are in a likely position to commit the corruption, than a common man who works for his bread and butter without any authority.

Corruption In India

That the Corruption and Bribery is a matter of serious concern and threat for the economical stability of India, according to 2022 Report of Transparency International[i], out of 185 countries India is ranked at 85th position in matter of corruption, with a score of 40, in which 0 means highly corrupt and 100 means highly honest.

Our government must seriously review and must do something effective to curb and reduce the corruption in the country, which is making it hallow and will ultimately hamper not only the interests of citizens but also the upcoming generations.

That it is alleged that the several celebs, business tycoons and politicians have their numbered accounts in Swiss Bank in which crores of rupees procured from illegal means and corruption have been kept was continuously denied which was proven later in year 2015-16. That according to the Reply to a RTI Application by CBDT (Central Board of Direct Taxes) in year 2021[ii]it has identified the illegal assets amounting to Rs. 20,078 crores from their recent investigation, which is shockingly an extremely huge amount, however it is must to be noted that it is only a tip of the iceberg, which needs to be investigated to reach the exact figure of the unaccounted money/assets.

That apart from this the Bribery is also one very serious and burning issue for our country to combat. According to the study of Transparency International 2005 about 92% of Indians have first-hand experience of giving bribes at some point of time in their life[iii], also according to the other Report of 2007 and 2009 the main bribery are paid by the truckers while crossing borders which was at that time Rs. 222 crores per annum.

The extent of corruption and it's horrendous effect can be analyzed from the fact that was reveled from the Report of World Bank in year 2007[iv], which stated that the total travel time of Delhi to Mumbai Trip (1412 kms) can be reduced by two days per trip if the corruption and it's associated regulatory stoppages to extract the bribes were eliminated.

There are no official data available till date on the black money in India, however according to a Writ Petition filed in Hon'ble Supreme Court of India in year 2018 on Right to Information, it was stated that criminals of the country have accumulated around Rs. 900 lakh crores as black money till date which is un-accounted further according to an Article published in the Economic Times in year 2018 it was estimated that the total amount of Indian Rupees currently present in the Swiss Bank and Offshore Banks is around 300 Lakh crores, which probably can completely eradicate the poverty from India for decades.

Principal Legislations Governing Corruption In India

  1. Prevention of Corruption Act, 1988:
    The Act mainly aimed to consolidate all the laws relating to Corruption by the Civil Servants in the country, which punishes the offence of bribery and procurement of illegal assets by the public servants. However the primary legislation suffered several adequacies and shortcomings like the bribe-giving was not considered as an offence, there was no provision for attachment of property and the act extended only to public sector and not private dealings even in banking and insurance companies, which had a very adverse impact on the economy of the country, in the absence of any effective mechanism to curb such corrupt practices.

    However now, after the Amendment of 2013 that Act has been upgraded and has been introduced with certain new changes in order to enable the agencies to curtail the hands of the corrupt civil servants of the country, like the private sector units and commercial organizations are bought under the ambit of the act and promising or giving bribe is made a punishable offence, bribe giving and taking both were made a punishable offence with seven years of imprisonment under Section 8 of the Act, the time limit for the trial is fixed upto two years which can be extended maximum to four years with the special reasons to be recorded in writing, further the act has provided for attachment of tainted property of the civil servants which is obtained through illegal means which was not there in the previous act.
     
  2. Foreign Contribution Regulation Act (FCRA), 2010:
    The Act principally aims to prohibit the foreign dealings and regulating the foreign contributions in the country by certain specified persons as enunciated in the Act, which includes Judges, Government Servants, Employees of Government, Members of Legislature of State as well as Parliament and political organizations.

    The territorial jurisdiction of the Act extends to the whole India including all the Indian citizens residing outside India who are receiving foreign contributions on behalf of the aforementioned persons, also the act under Section 6 curbs acceptance of any foreign hospitality by any of the above mentioned persons without the prior permission of the Central Government.

    The act formulates strict punishments for non-compliance of the above provisions, which regulates and forms the basis of anti-corruption legal framework in India, covering in it's the foreign dealings and money in it.
     
  3. Lokpal and Lokayuktas Act, 2013:
    This act has been enacted by our Hon'ble Parliament in year 2013 after the most famous Aandolan by social activist Shri Anna Hazare, which finally received the assent of Hon'ble President and was finally published in the Gazette on 01 January, 2014. The act provides establishment of various officers for curbing the corruption, known as Lokpal at the Central Level and Lokayukta at the State level, however some states have already enacted a legislation prior to it and have already appointed Lokayuktas in their respective states for dealing with the cases of Corruption.

    The Lokpal and Lokayuktas are empowered to inquire regarding the complaints received against the corruption in public functionaries, in which the most charming feature is that the Prime Minister of India has been bought under it's purview except few exceptions like International Relations, Atomic and Space, Public Order, etc. apart from it all the civil servants of Group A B C and D are bought under it's purview.

    That further any public entity receiving foreign donation of more than Rs. 10 Lacks have been bought under the purview of the Lokpal and it is open to the inquiry, apart from it the Lokpal can issue directions to the Central Bureau of Investigation (CBI) without taking any prior permission of Central Government.

    The Lokpal has been vested with the power of a civil court i.e. summoning enforcing and requiring attendance of any witness or person being associated with the case. The Lokpal can order confiscation of assets, proceeds and capital than have been procured by any unlawful or corrupt means by any Minister, Public Servants or otherwise even the Prime Minister of the Country, it purports the notion that everyone is equal in the eyes of law.
     
  4. Prevention of Money Laundering Act, 2002:
    It is regarded as the most effective and powerful statute in the field of Corruption in India. That generally the investigations under PMLA are launched by the Enforcement Directorate of India more commonly known as ED. The Act defines Money Laundering as attempting, abetting or knowing assisting or becoming a party to the crime which is connected with the proceeds of crime i.e. the money procured by the criminal act which is projected as untainted property, however according to the most recent Judgement of Hon'ble Supreme Court of India, the projection of untainted property is not a pre-requisite for booking the accused under PMLA only discovery and establishment of relation of the accused with the property will be the sufficient basis for attracting prosecution under the Act. That the most charming feature of the Act is that it allows the ED to confiscate and attach the properties of the accused persons along-with it's abettors at the preliminary stage of investigation, even before the conviction, which if found rightful and legal will be restored by the Special Court.

    The PMLA lays stringent regulations and obligations on the financial institutions and banks of the country to maintain records and books of the customers along-with complying with the guidelines of KYC (Know Your Customer), also with reporting the suspicious transactions to transactions exceeding a prescribed value to the appropriate authority.

    The Central Bureau of India (CBI) is also empowered to investigate the cases of PMLA under the Act, which places both ED and CBI in the most prominent position with plethora of powers to curb and investigate in the matters of Anti-Corruption in India.
     
  5. Central Vigilance Commission Act, 2003:
    The CVC has been established by the Central Government under the Act to keep a supervision on all the anti-corruption agencies of the country along-with CBI. The CVC is more a think tank of the Central Government and primarily plans, advices and executes the policies to the anti-corruption agencies of the country along-with inquiring into the complaints received against the public servants under the provisions of Prevention of Corruption Act, 1988. The CVC has a general superintendence over the CBI and can refer cases to it, along-with the CVC is empowered with the powers of a civil court under the act, so it can impartially inquire to the corruption cases without any impediments and hurdles.
     
  6. Fugitive Economic Offenders Act, 2018:
    The act principally aims to deal with the cases of fugitive offenders who are the criminals against whom the case for economic offences has been registered and who fled away from India to escape the prosecution. The Act covers under it's ambit all the fugitive economic offenders against whom a case has been registered involving the economic offences of an amount of Rs. 100 crores or more, and who have either left the country permanently or are refusing to come back in India for avoiding the criminal prosecution and legal consequences. The economic offences under the Act covers cases of benami transactions, corporate fraud, evasion of income tax, PCA and PMLA, etc.

    The Act provides stringent measures against the offender, which includes immediate confiscation of all the properties, which deters him from selling it or disposing it away by any means and demoralize him from committing any further crime.
     
  7. Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015:
    The Act primarily levies high penal rates of tax on any undisclosed asset or evasion of any income held abroad by a person who is a resident of India, apart from it also lays down punishment for individual regarding non-disclosure of foreign income, willful concealment to evade tax and failure in furnishing the requisite returns. The act targets the assets been occurred by illegal means and corruption practices by the politicians and civil servants even if they are procured and kept offshore by the offenders.

Anti-Corruption Agencies In India

The anti-corruption agencies established in India are vested with special powers to receive complaints and investigate the matters of corruption, among most prominent and significant anti-corruption agencies in India are as follows:
  1. Central Vigilance Commission of India (CVC):
    The CVC is basically set up in year 1964 by the Central Government after the recommendation of Shri Santharam Committee on Prevention of Corruption, which was to assist the government in cases of corruption in India. The body is the most apex and supreme institution in the country dealing and investigating the cases of corruption, which is free from any kind of executive control, who is only liable to the Central Government.

    The body helps the Government to formulate, guide and executive the policies against the corruption in the country. The Commission shall consist of a Central Vigilance Commissioner and not more than two Vigilance Commissioners, who will be heading the whole Commission for a period of four years.

    That by virtue of Government of India Resolution 2004 on Public Interest Disclosure and Protection of Informer, the CVC is authorized as the "Designated Agency" to receive the written complaints or online complaints on disclosure of any allegation of corruption or misuse of office in India, and it can take the action on it's own motion or refer the case to the CBI. Any person can directly lodge a complaint against corruption to CVC only against the mentioned officers of the Central Government via https://portal.cvc.gov.in
     
  2. Central Bureau of Investigation (CBI):
    That at the early stage of World War II, when the Government of India (British Raj) was spending a huge amount in the war, it felt that there are several anti-socials and corrupt officials and non-officials who are indulging in corrupt practices, and in order to curb it in year 1941, the GOI by an Executive Order (EO) established Special Police Establishment (SPE) under the DIG of the then Department of War to deal with the cases of War and Supply during WW II. This way the CBI was established in India. However officially the CBI is officially established through enacted of Delhi Special Police Establishment Act, 1946.

    That with the passage of time the functions of the CBI had grown up immensely, which began with the investigation of cases only about the corruption against the public servants, is being now have primarily have three wings they are:
    1. Anti-Corruption Division:
      It deals with the with the cases of Corruption committed by the Public Servants employed at Central Government, Central PSU's and Central Financial Institutions.
       
    2. Economic Crimes Division:
      It deals with the cases of bank frauds, financial frauds, import-export violations, large scale smuggling of narcotics, antiques, cultural properties and other smuggling of contraband items.
       
    3. Special Crime Division:
      It deals with the cases of terrorism, bomb blasts, sensational homicides, kidnapping for ransom and other underworld and organized crimes.
    Apart from it the Special Investigation Team (SIT) was established to investigate the sensational and sensitive case, like Rajeev Gandhi Assassination, Demolition of the Disputed Structure of Babri Masjid in Ayodhya and Bomb Blast at Bombay.

    The CBI is the second apex and pioneer body dealing in the cases of corruption and other sensitive matters in India, which enjoys the confidence of the whole country among all the classes of peoples, including Parliament and Judiciary.
     
  3. State Anti Corruption Bureaus (ACB):
    That CBI and CVC are empowered to deal only the cases of corruption against the public servants at Central level, similarly for investigating the cases of corruption at the State level, each state government has their own Anti-Corruption Bureau who deals with the cases under PCA against the public servants at the state level. The inquiries are initiated on basis of the reports/complaints received through CVC, Lokayukta, General Public, etc.

Powers And Punishments For Corruption Under Various Statutes In India

  1. Section 7 of PCA, 1988:
    This section makes any form of acceptance, obtainment or attempt to obtain any undue advantage by the public servant from any person or third party as a punishable offence with imprisonment from three to seven years and fine.
     
  2. Section 7A of PCA, 1988:
    This section makes the bribe-giving a punishable offence, it provides that any kind of acceptance or attempt to obtain from any other person by using your personal influence to induce the public servant to deter from his duty or to perform it dishonestly or improperly is punishable with imprisonment of three years to seven years and fine.
     
  3. Section 8 of PCA, 1988:
    This section also makes any kind of bribery or promise to give undue advantage to any public servant a punishable offence with imprisonment upto seven years or fine or both. That it is provided that this section shall not apply to a person who has been compelled to give such undue advantage on the condition that he informs the law enforcement agencies within seven days from the date of giving such bribe.
     
  4. Section 9 of PCA, 1988:
    That this section makes bribing a public servant by commercial organization a punishable offence with fine, the amount of fine is not mentioned which is to be calculated and imposed by the court of case to case basis considering the gravity and sensitivity of the offence.
     
  5. Section 10 of PCA, 1988:
    This section is an extension to the above section 9, which states that, if the offence U/s. 9 is proved in the court of law that it has been committed with the consent or convenience of the Director, Secretary, Manager or any other officers of the organization, then such persons will be officers in default in the eyes of law and they will liable to be proceeded for the offence under this section, being punishable with imprisonment from three years to seven years and fine.
     
  6. Section 12 of PCA, 1988:
    This section makes abetment of any offence under PCA a punishable offence with imprisonment from three years to seven years and fine, and in this case it is immaterial weather the offence is actually committed or not, mere attempt to commit the offence is punishable under this section.
     
  7. Section 13 of PCA, 1988:
    That this section makes any kind of criminal misconduct by a public servant a punishable offence with imprisonment from four years to ten years and fine, the criminal misconduct includes dishonest conversion of property into his own use which is entrusted to him (also criminal breach of trust) or intentionally enriching himself, i.e. accumulating wealth more than his legal sources of income i.e. through corruption and bribery.
     
  8. Section 14 of PCA, 1988:
    This section provides punishment for habitual offender under this act, which states that any person already convicted under the act if subsequently commits the offence again, then it shall be punishable with imprisonment from five years to ten years and fine.
     
  9. Section 4 of PMLA, 2002:
    That this section provides punishment for money laundering which means directly or indirectly attempt to indulge or knowingly assisting in a process or activity connected with the proceeds of crime and projecting is as an untainted property, an offence punishable with imprisonment from three years to seven years and fine which may extend to Rs. 5 Lacks.
     
  10. Section 5 of PMLA, 2002:
    That this section provides provisional attachment of any property for maximum ninety days by the Director or Deputy Director (agency appointed under this section) if they believe that any person is in the possession of proceeds of crime or is charged of having committed a scheduled offence.
     
  11. Section 17 of PMLA, 2002:
    The section provides the power of search and seizure of articles/properties which the Director believes to be procured via money laundering, or believes to be the proceeds of crime and any record relating to money laundering.
     
  12. Section 19 of PMLA, 2002:
    The section enunciates the powers of arrest vested in the Director/Deputy Director/Assistant if they have believe that any person has committed an offence under this section, and after informing the person regarding the grounds of arrest, the person will be taken to the Judicial Magistrate/Metropolitan Magistrate as the case may be within the period of twenty-four hours excluding the time of journey.
     
  13. Section 20 of PMLA, 2002:
    The section vests powers in the hands of Director or any officer authorized by him, if necessary for the purpose of adjudication to retain the property for a period of 90 days, which will be restituted back if it is found to be not procured through money laundering, back to the owner after the period of retention ceases to operate.
     
  14. Section 50 of PMLA, 2002:
    The section vests the power of civil court in the Director to summon, take oath on attendance, enforcing attendance, compelling the production of records, receiving the evidence of affidavits, issuing commissions, etc. to all the persons who according to his opinion is being connected with the case.
     
  15. Section 70 of PMLA, 2002:
    The act provides that of the offence under PMLA is committed by any company and it is proved that has been committed with the convenience and consent or attributable negligence of the Director, Secretary, Manager, any other officer, than all the persons under this section will be liable to vicariously prosecuted for the commitment of the offence.
     
  16. Section 34 of FCRA, 2010:
    The section makes any kind of payment, delivery, transfer or dealing of any manner of any article or currency whether Indian or Foreign, in contravention to the prohibitory order U/s. 10 of the Act, a punishable offence with imprisonment upto three years or fine or with both.
     
  17. Section 35 of FCRA, 2010:
    The section makes any kind of acceptance or abetment by any person in accepting any foreign contribution including any political party from a foreign source a punishable offence for a term which may extend to five years or with fine or both.
     
  18. Section 39 of FCRA, 2010:
    The section makes the offence committed by the company with the consent, knowledge and convenience of the secretary, manager or director if proved in court of law, a punishable offence.
     
  19. Section 27 of Prohibition of Benami Property Transactions Act, 1988:
    The section provides power of the Adjudicating Authority to confiscate the benami property when an order of recognition U/s. 26 of the Act is passed, for such appropriate period as it thinks fit, and till then the rights and title shall absolutely vest in the Central Government.
     
  20. Section 53 of Prohibition of Benami Property Transactions Act, 1988:
    The section provides that any kind of involvement or abetment into benami transaction which means the procurement of property from some fictious name or held by one person and consideration paid by other subject to the mentioned exceptions, punishable with rigorous imprisonment from one year to seven years along-with fine which may extend to 25% of the Fair Market Value (FMV) of the property.
     
  21. Section 54 of Prohibition of Benami Property Transactions Act, 1988:
    The section provides that if any person gives any false statement or produces any false documents before any authority established under the Act, knowing it to be false, when he is bound to state the true facts, will be punishable from rigorous imprisonment with minimum of six months to seven years and fine which may extend to 10% of Fair Market Value (FMV) of the property.

Landmark Judgements:
  1. Vijay Madanlal Choudhary v. Union of India 2022 SC 633 [v]:
    The Hon'ble Supreme Court of India while interpretating Section 3 of Prevention of Money Laundering Act, 2002 held that mere possession or involvement in deriving the proceeds of crime is sufficient to constitute an offence under PMLA and it is not necessary to show the property as untainted, hence the word "and" for showing the proceeds of crime as untainted property is construed as "or" as it must not defeat the very purpose of the Act.

    The court further contended that for attracting the crime under PMLA mere indulging or assisting in the activity of gaining the proceeds in crime is sufficient and reliable piece of evidence and the property need not to be shown as untainted, otherwise the persons in crime syndicates will keep the proceeds of crime for years and will enjoy it's fruits without any action by the law enforcement agencies.

    Therefore the section has to be read along-with the explanation been inserted by Amendment in year 2019, which sufficiently makes the involvement in activity to procure the proceeds of crime an offence under PMLA, 2002.
     
  2. K. Shanthamma v. State of Telengana SC 192 [vi]:
    The Hon'ble Supreme Court of India held in the case that, for establishing a case under Section 7 of Prevention of Corruption Act, 1988 "Demand for Bribe" and "It's Acceptance by the Public Servant" is the sine-qua-non for establishing a case against him, only recovery of amount from the accused will not entail his conviction under the Act.

    The court noted the fact that the Prosecution Witness (PW)- I in the case has not stated the demand at the time of the trap and since then he had made improvements in his statements while examination-in-chief, which fails to establish that the accused made the demand of the bribe beyond reasonable doubt, henceforth the order of Hon'ble Telengana High Court was set aside and accused was acquitted from all her charges of corruption and bribery.
     
  3. Central Bureau of Investigation (CBI) v. Ramesh Gelli 2016 3 SCC 788 [vii]:
    In this case the Hon'ble Supreme Court of India held that, the term public servant under Section 2 (c) of the PCA, 1988 includes directors and bank managers of a private banks as looking to their functions and nature of work, if they commit the offence of fraud or bribery resulting into financial losses to the society or any individual then for the purposes of prosecution under the statutory provisions of PCA, the private persons/employees of the bank will also be deemed to be public servants and prosecution against them is maintainable before the court of law.

Suggestions
The evil of corruption is extremely deep rooted in our country and it is impossible to eradicate it completely as it is a long process, however few suggestions which I feel should be implemented by the Government of India to reduce corruption in the country are as follows:
  1. The process for granting permission by the competent authority to the anti-corruption agencies is extremely slow and often shows the willful delay by the Department or the Government to hamper the investigation by the agencies in order to save the skin their favorite officers, like under Section 17A of Prevention of Corruption Act, 1988 provides that the agencies have to obtain a prior permission from the competent authority before initiating even an enquiry or investigation against the accused, this provision is grossly misused around the country to linger the cases of corruption against the accused public servants which results in motivating the public servants to practice corruption as they aren't afraid of any disciplinary action by any authority or agency.

    There are instances were the anti-corruption agencies are requesting the Departments for the permission for investigation against the accused public servants which wasn't granted to them for years, henceforth a time limit for initiating the Departmental Enquiry and granting of permission or refusing it should be fixed by the Central Government by a Notification so that, the investigation against the public servants involved in corruption must be launched without any delays and ends of justice must be meet with ease and convenience.
     
  2. That often persons are afraid to report the cases of corruption, due to the intimidation and threatening by the corrupt public servant by misusing their powers to ruin the helpless and downtrodden individual who faces the exploitation in the form of corruption. A helpline or portal should be established at National Level and State Levels.

    And all the citizens should be promoted to report the incident of corruptions (with simple procedure without any complicated steps) with an active assurance for action against the culprit by keeping the name of the complainant confidential, this will reveal the corrupt practices and the will prove a boon for the investigating agencies to catch-up the cases of corruption instantly with reliable and sustainable evidences, also the people will positively be motivated to report such incidents to the government. The similar formula have already been applied recently in the State of Punjab and prior to that in Delhi, which is proving very effective and efficient in curbing the corruption of the place.
     
  3. That everything cannot be reasonably expected from the Government as they have their own limitations, we as a citizen of the country also have our own responsibilities and duties, one must deter from offering or giving any bribe to any public servant of the country, if it happens even for a week, a major decline can be seen in the corruption index of the country.

Conclusion
That from the above analysis one thing is culpably clear that corruption is not only a threat to the country's or world's economy but it is threat to the whole human fraternity, as amid the poverty and sufferings there are thousands of individuals, families in India who even don't have access to the basic facilities for survival, in that case they are made to suffer the harsh consequences of corruption, in the events when they are denied from providing the quality of prescribed ration at the PDS ration shops, they are denied free treatment at government hospitals and many more events showing the vituperative realities of corruption in the country, which must be taken on a serious note both by the Governments and Citizens of the country.

Lastly, on the occasion when the whole Bharat will be celebrating the 75th Amrit Mahotsav of Independence, let us pledge to say no to corruption, report the corruption wherever we observes it and make our country a corruption free country.
Jai Hind, Jai Bharat.

End-Notes:
  1. https://indianexpress.com/article/india/india-ranks-85-in-transparency-internationals-corruption-index-7741760/
  2. https://indianexpress.com/article/india/panama-papers-rs-20000-crore-in-undeclared-assets-identified-7389084/
  3. https://web.archive.org/web/20130811123343/http://www.iri.org.in/related_readings/India%20Corruption%20Study%202005.pdf
  4. https://web.archive.org/web/20120410073806/http://info.worldbank.org/etools/ANTIC/docs/Resources/Sectors/Transport/CorrTruckingIndia.pdf
  5. https://indiankanoon.org/doc/14485072/
  6. https://www.livelaw.in/pdf_upload/192-k-shanthamma-v-state-of-telangana-21-feb-2022-410244.pdf
  7. https://indiankanoon.org/doc/30121571/


Anti-Corruption Laws in India with Recent Judicial Pronouncements: A Complete Guide





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