Author name Hardik Jharkharia, a law student from Lloyd Law College.
Abstract
In this article, we try to understand what corruption is and how Indian law combats it legally, the legal framework that the government applies to address cases of corruption, as well as the state’s legal history regarding corruption. We mention the main laws combating corruption in the country: the Prevention of Corruption Act, 1988; the Foreign Contribution Regulation Act, 2010; the Right to Information Act, 2005; the Companies Act, 2013; and the Prevention of Money Laundering Act, 2002. Additionally, we discuss cases related to corruption and describe the agencies that play an important role in combating corruption in the country. This article is also useful for understanding legal corruption laws in basic and easy language, where we mention some solutions to combat corruption in India. Furthermore, we highlight some famous scams and fraud cases that have made an impact on society.
Prevention of Corruption Act, 1988 The Role of criminal law in combating corruption in India
India has witnessed many financial frauds or scams in its history. With every scam or fraud, there is something new that comes to light through the investigation of the case. Due to the increasing corruption and scams in the country, the government tries to improve the legal system to stop these types of activities. To combat corruption in the country, India has made many strict laws and established agencies to protect money from scammers and corrupt individuals. Corruption is a word that is not new to India; we have seen corruption even before the independence era during the time of the British East India Company, where employees of the company were corrupt. To combat corruption in the company, the British Crown introduced the Regulating Act. Additionally, in the history of the Indian National Congress, Gandhi ji suggested to Nehru that he quit the working of the party because of corruption within the Congress. It is also not necessary that corruption is a particular issue of the public sector or the private sector; both sectors suffer from this inbuilt cancer called corruption. In modern times, corruption is very common in public offices, especially in government organizations like the water department, RTO, police stations, telecom department, and government banks. There is one thing that can commonly be called corruption: taking unwanted advantage of a position from the public. This practice creates a bad impact in society, especially on the young generation, who observe that corruption is common and makes things easy in society. It corrupts the minds of individuals, leading them to see society from a negative perspective. However, it does not mean that only government officials are responsible for the role of corruption. Civil society has a role in corruption by not raising their voices against it, thereby creating the habit of accepting corruption. Elections are the time when corruption is at its peak. Most political parties use corruption as a tool to win elections by funneling money into campaigns and offering bribes to voters or the administration to make things easy in the polls. This is a wrongful practice on the part of political parties. After changes in time and the facts of every case, the government establishes a strong legal framework to fight against corruption. They set up many agencies and departments that directly handle cases of financial fraud or scams, such as the Prevention of Corruption Act, 1988, the Foreign Contribution Regulation Act, 2010, the Right to Information Act, 2005, the Prevention of Money Laundering Act, 2002, and the Companies Act, 2013. Moreover, agencies with strong networks and powers, such as central rescue agencies, the Enforcement Directorate, and the Income Tax Department, monitor these cases.
The Prevention of Corruption Act, 1988
The Prevention of Corruption Act, 1988 is an anti-corruption statute that is enforced in India. The definition defines the law that criminalizes the receipt of any ‘undue advantage’ by ‘public servants’ and the provision of such undue advantage by other persons. So it prevents people from giving undue advantages to public servants for some work-related purposes. It also states that public servants are not to have any business relations with persons in the professional field. To protect society from the unilateral gains obtained by public servants, which helps create a balanced society and prevents the monopoly of public administration, the Prevention of Corruption Act, 1988 is also enforced in any private activity. The Supreme Court of India has also held that employees of banks—public or private—are considered ‘public servants’ under the PCA. This means that any corruption activity does not differentiate between the private or public sector; it falls under the Prevention of Corruption Act, 1988. Under the Prevention of Corruption Act, 1988, not only is the public servant liable for taking undue advantages, but also the person who gives or facilitates bribery is liable under the PCA. This means that the bribe-giver may also be charged with ‘criminal conspiracy’ to commit offenses under the PCA. Furthermore, an attempt to engage in any corrupt activity is sufficient under the PCA; for instance, if there is an agreement or attempt to give or receive a bribe, this in itself is sufficient to constitute an offense. The 2018 amendment states that obtaining, accepting, or attempting to obtain an undue advantage is, in itself, an offense under the PCA. To understand more about this law, we should examine more scenarios in which an offense is committed by a commercial organization. Such a commercial organization shall be liable to a fine, that is, if any person ‘associated with the commercial organization’ provides any illegal gratification to obtain or retain business or an advantage in the conduct of business for such an organization. For example, an employee, agent, or subsidiary of such a commercial organization is liable if there is a similar mindset to commit a crime.
Foreign Contribution Regulation Act, 2010
The Foreign Contribution Regulation Act of 2010 prohibits the acceptance of hospitality or contributions from ‘foreign sources’ or any services taken from foreign organizations for under-advantage or work-related service. The purpose of the act is to protect the country from any foreign corrupt activities that create problems in administration and also regulate foreign contributions to a country. This is only possible when there is consent from the central government to take hospitality or contributions from foreign sources. The violation of the guidelines or the law of this act may result in 5 years of imprisonment or an additional fine.
Right to Information Act, 2005
The Right to Information Act is a right of citizens to ask public services about their work or contributions in society. It also gives the right to citizens to inquire about any unwanted activity occurring in a country. For example, citizens can ask about services related to electricity, water, and roads. Any citizen of India may request information from a ‘public authority’ (a body of government or ‘instrumentality of the State’), which is required to reply expeditiously or within thirty days.
The Companies Act, 2013
The Companies Act, 2013, defines fraud in simple terms, and this could relate to bribery activities in the public or private sector. The Companies Act is also associated with the private bribery functions in corporate industries. Fraud is an offense under the Companies Act that is criminalized and is punishable by imprisonment of six months to ten years, with an additional fine. The Companies Act also established the National Financial Regulatory Authority; it empowers agencies to investigate serious company frauds in order to search or seize documents and files. It also empowers the creation of a committee for very serious crimes
The Prevention of Money Laundering Act
The Prevention of Money Laundering Act is intended to prevent or take action against individuals who create black or illegal money in a country. To understand this Prevention of Money Laundering Act, we first have to understand what money laundering is: it’s a process in which a person tries to convert their illegal or black money into white or legal money. In India, it is also called HAWALA BAZAR, where people invest in shares, banks, or shell companies to protect their black money. They also invest in Swiss banks, where the identity of the investor is protected by the government. After observing many cases of money laundering in different sectors, the government enacted the Prevention of Money Laundering Act of 2002. Under this act, any property derived or obtained, directly or indirectly, by a person as a result of certain underlying identified crimes (which are considered predicate offenses for the application of the PMLA) or any property derived or obtained through fraud is considered ‘proceeds of crime’ under the PMLA. Offenses under the PCA are also predicate offenses under the PMLA. In the case law of Vijay Madanlal Choudhary v. Union of India, the bench of the Supreme Court questioned various provisions of the Money Laundering Act. In the proceedings of the Supreme Court, they asked about the constitutional validity of searching and seizing articles under the PMLA. After hearing both sides, the court, in its judgment, stated that it was valid to search and seize articles under the PMLA because of the serious nature of the cases in which it is compulsory to take serious steps against the accused under the PMLA. The court observed that there are adequate safeguards enshrined in the PMLA to prevent abuse of these powers. The change that came after the enforcement of this act is that agencies can now investigate high-corruption matters without any pressure and can conduct raids on politically backgrounded individuals. There is also a change in the Information Technology Act, wherein companies are no longer allowed to share personal documents like passwords, files, and biodata without the consent of the employee
Role of central agencies in Combating Corruption in India
- Central Bureau of Investigation The Central Bureau of Investigation is a multitasking investigation agency of the Indian government that investigates matters of crime, corruption, and economic offenses. The agency has the power to search and seize in matters of corruption and conduct raids to find evidence against the accused to build a strong case in court.
- Central Vigilance Commission (CVC) The agency examines the civil administration work in the country and exercises control over vigilance activities under the Government of India. It advises the central government of India on matters of corruption, tracks the activities related to financial frauds and scams, and helps the government of India make plans to review cases and suggests laws for the legislature.
- Anti-Corruption Bureau (ACB) The agency functions by collecting information about corruption-related matters and informing the government to take action against scams and frauds. They help the government protect against future financial fraud in the country.
Criminal Law and Corruption Control: A Critical Examination
To understand the term “public servant,” we have to define it as any person who holds an office for which he is authorized or required to perform any public duty. This is a clear definition of a public servant. The public servant has a role during his/her duty; then what does “public duty” mean? It refers to a duty in the discharge of which the State, the public, or the community at large has an interest. In the case of P.V. Narasimha Rao Vs. State (CBI/SPE), the court stated that the meaning of the expression ‘office’ appearing in the relevant provision of the PC Act has been understood as “a position or place to which certain duties are attached, especially one of a more or less public character.” India has a strict and powerful legal system in the fight against corruption, but there is a need for improvement in some areas where loopholes arise. Corruption is a widely accepted practice that has large and strong root causes in India; however, there is a fact that a person who is involved in corruption has a fear of the government. In fact, many political leaders in our country raise their voices against corruption, which creates awareness among Indians about the costs of corruption. The government has to establish a separate administration department that has the sole jurisdiction to handle cases of corruption, making it a fully independent and powerful authority to combat corruption. Additionally, they need to increase judicial power to strengthen their cases in a court of law. India is witnessing many scams occurring in the country, for example, the 2G spectrum scam, the Punjab National Bank scam, and the scam of 1992.
Conclusion
The government of India is empowered to combat corruption in the country with the help of laws and agencies. It only needs to take large steps against this issue. It doesn’t matter that only politics can make a change in society; any organization, sector, group, or citizen of a country has the right to raise their voice against corruption and combat it legally. There is a need to create awareness about the disadvantages of corruption.
