India is no stranger to hunger strikes being used as a form of non-violent resistance. Perhaps the most famous example of this is that of Gandhi during his protest against British rule in India. More recently, as reported by The Telegraph, we see fasting being used by the Indian yoga guru, Swami Ramdev, to object to corrupt practices in India. This protest follows on the heels of the five day hunger strike by Anna Hazare earlier this year which led to India finally ratifying the United Nations Convention against Corruption six years after signing it.
Legislation designed to enshrine various principals of the UN Convention in Indian law remains outstanding. Similarly, a longstanding bill to establish an ombudsman with jurisdiction over corrupt practices and grievances is still out to consultation. At present, there are no laws applying to the bribery of foreign officials, although a bill has been tabled in the Indian parliament that would criminalise such acts. In addition, private commercial bribery is not yet outlawed by statute.
Currently, the primary legislation in India dealing with anti-corruption is the Prevention of Corruption Act 1988 (PCA) (PDF/127KB/17 pages). The PCA prohibits the receipt of illegal gratification by ‘public servants’ and gratification is not limited to pecuniary gratifications or to gratifications estimable in money.
Chapter III of the PCA contains the relevant offences and penalties and of particular note:
- section 7 of the PCA provides that if a public servant accepts or obtains or agrees to accept or attempts to obtain from any person, for himself or for any other person, any gratification (other than legal remuneration), as a motive for doing or forbearing to do any official act or for showing or forbearing to show, in the exercise of his official functions, any favour or disfavour to any person or for rendering or attempting to render any service or disservice to any person specified in the section, he would be punished with imprisonment which shall not be less than six months but may extend to five years along with a fine; and
- section 11 of the PCA provides that, where a public servant receives any valuable thing (without consideration, or for a consideration, which he knows to be inadequate), from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceedings or business transacted or to be transacted by such public servant or having any connection with the official functions of himself, he may be punished with imprisonment for a term which shall not be less than 6 months but may extend to five years, along with a fine.
Whilst the PCA’s focus is on the bribe taker, the bribe giver may be caught through the offence of abetment. In respect of offences under sections 7 and 11 of the PCA, the payer of the illegal gratification is liable as an ‘abettor’ under section 12 of the PCA. Sections 107 to 116 of the Indian Penal Code 1860 provide that ‘instigation’ is considered as the key element of abetment.
In terms of record keeping, Indian companies are required to maintain their books of accounts and other business records under, as is typical, various company and tax legislation laws including the Companies Act 1956 and the Income Tax Act 1961.
Certain regulated companies are also subject to requirements to maintain records under the Prevention of Money Laundering Act 2002 (PML). It is worth noting that Part B of the Schedule to the PML treats the proceeds of offences under sections 7 to 10 of the PCA as ‘proceeds of crime’.
In addition, we are seeing piecemeal legislation that is expected to have the effect of reducing corrupt behaviours and practices. In this regard, the Foreign Contribution (Regulation) Act 2010 (FCRA), which came into force in May, is intended to consolidate the law regulating the acceptance and utilisation of foreign contributions in India. Whilst any step to try and eradicate bribery is welcome, TrustLaw reports that, in a country where corruption is part of the tapestry, enforcement of the FCRA could pose a problem.