INTERNAL ASSESSMENT

PREVENTION OF CORRUPTION LAWS

SALIENT FEATURES OF THE PREVENTION OF

CORRUPTION ACT 1988 WITH RELEVANT CASES AND
EXAMPLES

Sudev Singh
Division B
B.A. LLB
17010125169
Introduction

The existence of corruption as a systemically prevalent problem in the State of India naturally
means that the strength of legislation to combat such perversities must also be in place. The
Prevention of Corruption Act 1988 was formed to establish a benchmark for Economic
Crimes and Corruption ensuing from public servants and government officials in positions of
power. By definition, corrupt activity refers to dishonest or underhanded behaviour, and can
range from little gifts to gigantic favouritism in terms of preference for allotted government
contracts or tenders etc. Whenever an official of the State, acting under their professional
capacity does something to benefit themselves personally or an acquaintance/partner, this
fulfils the definition of corruption. It may range from engaging in money laundering and
bribery to manipulating elections, double dealing and embezzlement amongst numerous other
criteria. India ranks amongst the most corrupt countries in the world index, and is notorious
for scandals worth billions of dollars as well as officials of the government not doing their
jobs unless compensated on the side. Corruption thus inhibits business, adversely affects
economic growth as well as bona fide financial assistance projects, notwithstanding the moral
compass of society as a whole.

Historical Development

It was only in 1945 that a Prevention of Corruption Act was introduced as a separate piece of
legislation. Prior to this, corruption was dealt with strictly under the sparse provisions of the
Indian Penal Code which was found to be severely lacking in efficacy to deal with the scale
of corruption in the country. Following the 1945 Act, the Bakshi Tek Chand Committee
acting as a veritable review commission, made changes and formulated the Criminal Law
Amendment Act of 1952. This was then further amended into the Anti-Corruption Law
(Amendment) Act 1964 following a review by the Santhanam Committee, showcasing the
magnitude of subsequent legislative reform required to finally draft the Prevention of
Corruption Act of 1988. The expanse of laws dealing with corruption thus underwent a
complete overhaul in four decades simply to keep up with the sheer magnitude of corrupt
practices in the country, and ironically still seem to fall short.

Prevention of Corruption Act 1988

The Act served the purpose of collating and compiling all preceding legislation from the
Penal Code and previous Review Committees and their amendments into one final document.

 The Act under abetment prohibits bribing a public servant/government official.

Details specific provisions regarding bribes by a commercial organisation for
purposes of obtaining favour or otherwise.

 Criminal misconduct has been redefined under the Act to only cover possession of
assets disproportionate to income alongside misappropriation of property.

 There has been modification in the penalties and definitions regarding offences
relating to engaging in bribery, abetting a punishable offence under the Act and also
when the individual is a habitual offender.

 The Act also covers the procedures for attachment & forfeiture of properties owned
by government officials accused of corruption.

The Act is operational in the entirety of Indian territory except Jammu and Kashmir.

Section 7 of the Prevention of Corruption Act deals with when a Public Servant receives a
bribe.1 They also cover holding the individual giving said bribe accountable u/s 8 of the Act.2

Bribery was made a punishable offence via the 2013 Amendment, whereas the Amendment
in 2018 was a reformation to the already existing document wherein extended clarity was

1
Section 7 of Prevention of Corruption Act 1988
2
Section 8 of Prevention of Corruption Act 1988
brought into the existing legislation. It includes defining Undue Advantage as any advantage
outside the bounds of payment under legal connotations, and says that any public
official/servant found guilty of such is liable to be imprisoned for up to seven years. The
Amendment also crucially opined upon the persons guilty of providing said Undue
Advantage to a public official/servant, while also stating that any organisation for profit may
be held liable while also including companies outside India under their jurisdiction. This
serves as a crucial statute as many of the corrupt industrialists/economic offenders operate
from outside Indian territory through escrow accounts and shell companies in tax havens to
evade jurisdiction and stash illegitimate funds.

Landmark Judgements

Anil Kumar and Ors. Vs. M.K. Aiyappa and Anr3

Wherein appellant before the Supreme Court questioned whether the Special Judge holds
jurisdiction to pass decision on the case under Section 19 of the Prevention of Corruption Act
1988.

Decision: Supreme Court held that the law relating to issue of sanction can be interpreted to
the effect that the question of whether sanction is to be granted or not is of paramount
importance for protecting office of an official who has purportedly acted in good faith while
performing his duty.

C.M. Girish Babu Vs. CBI, Cochin, High Court of Kerala4

Court adjudged that the burden of proof placed upon the accused person against whom the
presumption is made under Section 20 of the Act is not comparable to that placed on the
prosecution upon whom it is incumbent to satisfy maintainability of the case beyond
reasonable doubt.

3
2013 AD SC 386
4
2009 3 SCC 779
C.B.I v. Ashok Kumar Aggarwal5

Observed by the Supreme Court that sanction lifts the bar for prosecution, and it does not
exist as a vexatious exercise but a solemn act which accords protection to Public Officials
protecting them from frivolous prosecution. Court held that power to gift sanction is to be
exercised strictly under the purview of public interest, and remedies available to the accused
against whom the sanction is purported to be exercised.

Abhay Singh Chautala Vs. C.B.I6

The Apex Court held that the High Court was right in placing reliance upon Prakash Singh
Badal Vs. State of Punjab in reaching the decision that the Appellants in both cases abused
the sanctity of the offices or offices they were holding positions in at the time when
cognizance was taken, and thus concluded that there was no question of sanction under
Section 19.

Analysis

Although the laws under the Prevention of Corruption Act 1988 have compiled decades of
drafted statutes, there are many areas which suffer from lack of attention or ambiguity within
the Act. Being a nation that is ranked as suffering from one of the highest amounts of
corruption in the world, efforts to quell the problem must go above and beyond and a
piecemeal initiative is not enough to address the sheer magnitude of the problem. In the
earlier provisions of the Act, when a person who has given a bribe to a public servant
admitted said bribe, his involvement was rendered a nullity. The removal of this provision
may be classified as a double-edged sword, as it discourages those indulging in bribery to
self-implicate, but also initiates a no-tolerance policy to both those who give as well as
receive bribes.

5
AIR 2014 SC 827

6
2011 (2) ACR 2252 SC
The Amendment of 2018 has increased the term of imprisonment as punishment to a
minimum time period of 5 years, and shares roots with the UN Convention for Corruption
2005 while focusing on the establishment of undue advantage in punishing a public official.7

The Amendment has provisions for application of the Prevention of Money Laundering Act
(PMLA) 2002, which investigates economic offenders who embezzle funds or acquire
property in a mala fide and illegal manner amongst other things. The Criminal Law
Amendment Ordinance 1944 is additionally covered, detailing attachment and administration
of property obtained which may constitute an offence under the Act. Section 19 of the Act
accords sanction to public officials so that vexatious litigation or threat thereof may not
hinder their performance of duty in good faith. Section 9 of the Act puts forward the
suggestion that companies include anti-bribery clauses in the contractual agreements with
other parties, which conveys the necessity of self-policing within commercial organisations
when conducting business.

Conclusion

Despite anti-corruption laws having come a long way as chronicled above, corruption in India
is seen as being an easily accessible option to get things done easier or faster rather than a
highly unethical practice that adversely affects millions of other less fortunate citizens as
consequence. The country is infamous for bending rules and regulations to accommodate
either power or monetary influence, and the only people who are actually taxed are low to
moderate earning individuals, rather than the massive conglomerates who can afford it and
choose to circumvent the laws and suppress the extent of their assets. Corruption must attract
much stricter legislation and longer imprisonment terms, as this coupled with a higher
conviction rate is a much-needed changeover. The problem with prosecuting economic
offenders is that their money and influence are usually successful in inhibiting even the due
process of courts in many cases, who as a result of having close to unlimited resources can
afford to prolong and delay proceedings for years and even decades to avoid justice.

7
Convention against corruption. (n.d.). Retrieved October 07, 2021, from
https://www.unodc.org/unodc/en/treaties/CAC/