The Prevention of Corruption (Amendment) Act, 2018

The amendment that received assent on 26 July 2018 is the most substantial change to the law since 1988. It rewrote the central offences around a new concept, undue advantage; criminalised the giving of a bribe, which the Act had not previously done; created liability for commercial organisations and their officers; narrowed criminal misconduct to two clauses by deleting the abuse of position limb; and inserted Section 17A, which requires prior approval before a police officer may enquire into a decision or recommendation of a public servant. Its stated purposes were to meet India's obligations under the United Nations Convention against Corruption and to protect honest officials from harassment.

1. The Background

1. The Convention. India ratified the United Nations Convention against Corruption in 2011. The Convention requires parties to criminalise the offering and giving of a bribe to a public official, to consider criminalising bribery in the private sector, to provide for the liability of legal persons, and to criminalise illicit enrichment. The Act as it stood met only part of that.
2. The Bill and the reports. A Bill was introduced in 2013 and was examined by a parliamentary standing committee, by the Law Commission in its report of 2015, and by a select committee of the Rajya Sabha in 2016. The successive reports produced the structure finally enacted, including the defence of adequate procedures for commercial organisations.
3. The complaint from within government. Officers and their associations had argued for years that the abuse of position limb of criminal misconduct exposed every administrative decision that later proved unprofitable to a criminal investigation, and that this had produced decision paralysis. That argument accounts for the deletion of Section 13(1)(d) and for Section 17A.

2. Undue Advantage

Section 2(d) now defines undue advantage to mean any gratification whatever, other than legal remuneration. The Explanation makes clear that gratification is not limited to pecuniary gratification or to gratification estimable in money, and that legal remuneration means remuneration which the public servant is permitted by the Government or the organisation he serves to receive. The expression replaces the older language of gratification other than legal remuneration and now runs through Sections 7, 7A, 8, 9, 10 and 12, so that the offences are built on a single defined concept.

3. The Recast Offences

• Section 7A. Whoever accepts or attempts to obtain an undue advantage from another person as a motive or reward to induce a public servant, by corrupt or illegal means or by exercise of personal influence, to perform or forbear from performing a public duty improperly or dishonestly, is punishable with imprisonment of three to seven years and fine. This reaches the middleman and the influence peddler who is not himself a public servant.
• Section 8. Any person who gives or promises to give an undue advantage to another person, intending to induce or reward a public servant to perform a public duty improperly, is punishable with imprisonment which may extend to seven years, or fine, or both. The offence of giving a bribe is thus created in terms for the first time.
• The protection for the coerced giver. A proviso to Section 8 provides that a person compelled to give an undue advantage is not liable if he reports the matter to a law enforcement authority or investigating agency within seven days from the date of giving.
• Section 9. A commercial organisation is liable to fine where a person associated with it gives or promises an undue advantage to a public servant intending to obtain or retain business or an advantage in the conduct of business, with a defence that the organisation had in place adequate procedures designed to prevent such conduct.
• Section 10. Where an offence under Section 9 is committed by a commercial organisation with the consent or connivance of a director, manager, secretary or other officer, that person is liable to imprisonment of three to seven years and fine.
• Section 12, as substituted. Abetment of any offence punishable under the Act, whether or not the offence is committed in consequence of the abetment, is punishable with imprisonment of three to seven years and fine. Before the amendment the section was confined to abetment of the offences under Sections 7 and 11.

4. Criminal Misconduct Narrowed

Section 13(1) as substituted contains two clauses only. Clause (a) covers a public servant who dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or under his control, or allows another person so to do. Clause (b) covers a public servant who intentionally enriches himself illicitly during the period of his office, the Explanation providing that a person is said to enrich himself illicitly if he or any person on his behalf is in possession of, or has at any time during the period of his office been in possession of, pecuniary resources or property disproportionate to his known sources of income which the public servant cannot satisfactorily account for.

5. The New Procedural Safeguards

1. Section 17A, prior approval. No police officer shall conduct any enquiry or inquiry or investigation into an offence alleged to have been committed by a public servant under the Act, where the alleged offence is relatable to any recommendation made or decision taken by the public servant in discharge of his official functions or duties, without the previous approval of the authority competent to remove him from office, or of the appropriate Government where he has ceased to hold office. No approval is necessary for cases involving arrest of a person on the spot on the charge of accepting or attempting to accept an undue advantage. The authority is to convey its decision within three months, extendable by one month for reasons recorded.
2. Section 19, sanction extended. The requirement of previous sanction now applies also in respect of a person who has ceased to hold the office he held when the offence was committed, the sanction being given by the authority which would have been competent to remove him. A court is not to take cognizance on a private complaint without the complainant obtaining permission, and the authority is required to decide within three months, extendable by one month.
3. Section 4(4), a trial timeline. The special judge is to hold the trial on a day to day basis and to endeavour to conclude it within two years, with reasons to be recorded for any extension, and the total period is not to exceed four years.
4. Section 18A, attachment and forfeiture. The provisions of the Criminal Law Amendment Ordinance, 1944 are applied to attachment, administration of attached property and execution of orders of attachment in respect of the offences under this Act, the special judge exercising the powers of the district judge under that Ordinance.

6. The Presumption after 2018

Section 20 was recast to fit the new offences. Where in a trial of an offence punishable under Section 7, or under Section 11, it is proved that a public servant accused of an offence has accepted or attempted to obtain for himself or for any other person any undue advantage from any person, it shall be presumed, unless the contrary is proved, that he accepted or attempted to obtain that undue advantage as a motive or reward for the improper performance of a public duty. The presumption operates only once acceptance is proved, which is why the prosecution's case still turns on proof of demand and acceptance, and it does not apply to the disproportionate assets offence, where the statutory burden is contained in the Explanation to Section 13(1)(b) itself.

7. Related Topics and Provisions