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Corruption In India: Legislative Reforms, Judicial Insights, And Institutional Challenges

Corruption in India continues to hinder governance and economic progress. This paper analyses key legislative and institutional efforts to combat corruption, focusing on the Prevention of Corruption Act, 1988 and its 2018 amendments, which expanded the definition of public servants and introduced stricter penalties.

It also examines the role of anti-corruption bodies like the Lokpal, established under the Lokpal and Lokayukta Act, 2013, and the Central Vigilance Commission (CVC), set up to monitor vigilance activities across central government bodies. Critical judicial rulings, such as Vineet Narain v. Union of India and B. Jayaraj v. State of A.P., have further shaped the anti-corruption landscape by clarifying the legal definition of "public servant" and mandating stricter evidence requirements for corruption cases.

Despite these efforts, India's declining ranking in global corruption indices highlights persistent challenges. The paper concludes that too effectively curb corruption, India requires tougher enforcement of anti-corruption laws, less governmental control over investigative agencies, and greater accountability for public servants involved in corrupt practices.

Introduction
"Power does not corrupt men; fools, however, if they get into a position of power, corrupt power" -George Bernard Shaw

Corruption in India is a major issue that adversely affects its economy. Corruption is considered to be one of the greatest impediments on the way towards progress for developing country like India. Corruption has been defined in many ways. As per Oxford dictionary, Corruption means misuse of public power for private purpose' as per the world development of report, the problem of corruption lies at the intersection of the public and the private sector, it implies politico-bureaucratic strangulation of society by the government under the shield of law and democracy. Its fallout adversely affects development.

The Indian penal code has defined Corruption in legal terms as whoever being or expecting to be 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 whatever other than legal remuneration as a motive or reward for doing or for bearing to do any official act or for showing person or for rendering or attempting to render any service, disservice to any person with the central or any state government or parliament or legislature or any state or with any public servant as such shall be punished with imprisonment of either description for a term which may extend to three years or with fine or with both.

Public servants in India can be penalized for corruption under the Indian Penal Code, 1860 and the Prevention of Corruption Act, 1988. The Benami Transactions (Prohibition) Act, 1988 prohibits benami transactions. The Prevention of Money Laundering Act, 2002 penalizes public servants for the offence of money laundering. India is also a signatory to the UN Convention against Corruption since 2005. The Convention covers a broad range of acts of corruption and also proposes certain preventive policies on a time-to-time basis."[1]

Indian Legislation Against Corruption:

The existing laws including the provisions of the Indian Penal Code (IPC) were found not adequate to compact the growing pest of corruption. A specific legislation to fight corruption was the need of the hour. Consequently, the Prevention of Corruption Act 1947 was brought into force. The Preamble of the Act clearly stated that "the Act has been passed for more effective control and prevention of bribery and corruption." Bribery has been addressed as that form of corruption which is found extensive among public servants.

On the other hand, the Act did not define the term 'public servant'. For the purpose of the interpretation of the term "public servant" the definition given under Section 21 of IPC was taken into consideration. In State of M.P. vs. M.V. Narasimhan, after considering the object of the legislation the Supreme Court had observed certain differences between the Indian Penal Code and the Prevention of Corruption Act, 1947. It was held that the Prevention of Corruption Act 1947 was not in pari materia with IPC.

Prevention of Corruption Act, 1947 was an independent legislation which created a specific offence of criminal misconduct, an offence which was different from bribery defined in the Indian Penal Code. The PC Act served as a specific legislation intended to eliminate corruption among public servants. On the other hand, IPC is a penal law wider in its ambit and is generally applicable.

The PC Act 1947 was particularly enacted to prevent corrupt activities among public servants; nevertheless it failed in its purpose. Though the legislation existed, the pest of corruption kept on increasing. The demand for a new legislation with more harsh provisions was raised across the country. Consequently, the Government of India in the year 1962 appointed a committee under the chairmanship of Sri. K. Santhanam to examine the functioning of the 1947 Act and propose recommendations for better implementation. The Committee found serious drawbacks and proposed number of changes in the Act. "Based on the recommendations of the Santhanam Committee the present legislation Prevention of Corruption Act, 1988 was enacted."

Hence, the Santhanam Committee report was a turning point in the history of anti-corruption laws in India. The Act incorporated the PC Act 1947, the Criminal law Amendment Act 1952 and Sections 161-to 165-A of the Indian Penal Code with necessary modifications. Moreover, it enlarged the scope of the definition of 'public servant' and also amended the Criminal Law Amendment Ordinance, 1944. Legislative intent behind the Act was to make anti-corruption laws more effective by extending the scope of the definition of 'public servant' and bringing each and every person under its ambit, who hold an office by virtue of which he is required to perform any "public duty". Hence, the underlying idea was to eradicate the menace of corruption.
The true test in order to determine whether a person is an officer of the Government, is:
  • Whether he is in the service or pay of the Government
  • Whether he is entrusted with the performance of any public duty
PC Act imposes penalties on public servants under Chapter III of the statute. A public servant commits an offence bailable or non-bailable when:
  1. He or she takes gratification other than legal remuneration with respect to the official act.
  2. He or she takes gratification, in order by illegal means to influence a public servant other than himself.
  3. He or she takes gratification for exercising personal influence with a public servant.
  4. He obtains a valuable thing, without consideration from persons concerned in proceedings or business transacted by the public servant.
According to Section 13 of PC Act, a public servant is said to have committed "criminal misconduct" when:
  1. He or she habitually accepts gratification other than legal remuneration as a reward or motive (as discussed in section 7).
  2. He or she habitually accepts or agrees or attempts to obtain for himself or any other person any valuable thing without consideration.
  3. He or she fraudulently misappropriates or converts for himself or any other person any valuable property entrusted to him or in his or her control.
  4. He or she obtains for himself or any person, a valuable thing or monetary advantage by illegal means.
  5. He or she abuses the position to obtain for himself or any person, a valuable thing or monetary advantage.
Moreover, section 13(2) of the Act provides minimum one year imprisonment as punishment for criminal misconduct committed by public servants.

The Lokpal And Lokayukta Act, 2013:

The Lokpal and the Lokayukta Act intends to check corruption through the setting-up of an independent institution at the national level, called the Lokpal which would be empowered to address complaints involving corruption against public servants specified in clauses (a) to (h) of Section 14(1) of the Act. Also, it would make sure that these complaints are duly investigated, and initiate prosecution against the felonious public servants, wherever found necessary. The processing of complaints, investigation and initiation of prosecution etc. are included under the Act. As per the Act, they must be completed in a fixed span of time. Further, the Act provides for the establishment of special courts with trials to be completed within one year (extendable up to 2 years for reasons to be recorded in writing) and provides for Lokayuktas to be established at the State level by the respective states within a period of one year.

Features of The Lokpal and Lokayukta Act, 2013:

  1. The Lokpal (National Level Anti-Corruption Institution):
    • Structure:
      1. The Lokpal is a multi-member body consisting of a Chairperson and up to eight members.
      2. Of the members, 50% must be judicial members, and 50% of the total members must belong to SC/ST/OBCs, minorities, or women.
      3. The Chairperson must be a current or former Chief Justice of India, or a Supreme Court judge, or an eminent person with integrity and expertise in anti-corruption, law, or public administration.
      4. The non-judicial members should have a minimum of 25 years of experience in areas like anti-corruption policy, law, public administration, or finance.

Central Vigilance Commission Act, 2003:

The Central Vigilance Commission was set up by the Union Government in February, 1964 on the recommendations of K. Santhanam committee. The main aim was to advise and guide Central Government agencies in the field of vigilance. CVC consists of a Central Vigilance Commissioner- as the Chairperson; and not more than two Vigilance Commissioners – as members. CVC is regarded as the apex vigilance institution, free of control from any executive authority. CVC monitors all vigilance activities carried under the Central Government and advises various authorities in Central Government organizations in planning, executing, reviewing and reforming their vigilance mechanism.

Structure and Composition of CVC Committee:The CVC operates as an autonomous body, free from executive control, and plays a pivotal role in the vigilance ecosystem of India.
It consists of:
  • Central Vigilance Commissioner (Chairperson): The head of the commission, responsible for overseeing its functioning.
  • Two Vigilance Commissioners (Members): Assisting the Chairperson, they collectively work to ensure vigilance measures are effective across all central government institutions.
The President of India appoints the Central Vigilance Commissioner and the Vigilance Commissioners, based on recommendations made by a committee consisting of:
  • The Prime Minister (as the Chairperson)
  • The Union Minister of Home Affairs
  • The Leader of the Opposition in the Lok Sabha
Functions and responsibilities of the CVC committee: The CVC plays a vital role in maintaining the integrity of the government machinery by performing the following functions:
  1. Supervision of Vigilance: The CVC supervises vigilance activities within central government departments, public sector enterprises, and other entities that are under the purview of the central government.
  2. Advisory Role: It advises government agencies on planning and executing their vigilance-related activities. This includes detecting and preventing corruption in government offices.
  3. Investigation Oversight: The CVC has supervisory powers over investigations conducted by the Central Bureau of Investigation (CBI) in cases related to corruption and misconduct by public servants. It has the authority to direct the CBI to initiate inquiries and can also review the progress of such investigations.
  4. Handling Complaints: The CVC is responsible for receiving complaints related to corruption in government institutions. It can investigate or refer these complaints to other agencies like the CBI or departmental authorities for further inquiry.
  5. Punitive Actions: Based on investigations, the CVC can recommend penalties or disciplinary action against public officials found guilty of corruption or misconduct.
  6. Systemic Reforms: In addition to punitive measures, the CVC focuses on institutional reforms. It reviews and proposes improvements to the vigilance setup in various central government agencies and public sector undertakings to enhance transparency, accountability, and efficiency.
  7. Whistle-blower Protection: Under the Public Interest Disclosure and Protection of Informers Resolution, 2004, the CVC is designated as the authority to receive complaints of corruption from whistle-blowers and to protect their identity.
  8. Conducting Awareness Programs: The CVC also works to spread awareness about corruption and vigilance-related issues among the public and within government institutions.
Role in Preventing Corruption:
  • The CVC is a pivotal institution in the fight against corruption, acting as a watchdog over the executive branch of the government.
  • It plays a proactive role in detecting, investigating, and advising on matters of corruption, while also ensuring whistle-blower protection and enforcing disciplinary measures.
  • Through its recommendations, the CVC encourages government organizations to adopt transparent and fair practices, thus ensuring a corruption-free administration.

Judicial Analysis:
  • Vineet Narain & Others v. Union of India, (1998) 1 SCC 226: Also known as the Hawala case, in which the investigation revealed possible bribery payments to several high-ranking Indian politicians and bureaucrats from a funding source linked to terrorists. It was alleged that the Central Bureau of Investigation (CBI) had failed to investigate the case with the clear intent to shield certain implicated individuals who were influential in government and politics. The Supreme Court acceded that the Central Bureau of Investigation had failed in its responsibility to investigate the allegations of public corruption. The court thus laid down guidelines to ensure the independence and autonomy of the CBI and ordered that the CBI be placed under the supervision of the Central Vigilance Commission (CVC), an autonomous governmental agency intended to be free from executive control or interference. This directive removed the CBI from the control of the Central Government. The CVC was attributed with the responsibility for ensuring that allegations of corruption against public officials were thoroughly investigated regardless of the identity of the accused and without interference from the Government.
     
  • Central Bureau of Investigation v. Gelli, (2016) 3 SCC 788: The main issue before the Court was whether the Chairman/Managing Director or Executive Director of a private bank operating under licence issued by RBI under the Banking Regulation Act, 1949, held/holds an office and performed/performs public duty so as to attract the definition of "public servant"? The Court held that "there can be no manner of doubt that in the Objects and Reasons stated for enactment of the Prevention of Corruption Act, 1988, it has been made more than clear that the Act visualises widening of the scope of the definition of 'public servant'. Nonetheless, the court specified that "mere performance of public duties by the holder of any office cannot bring the incumbent within the meaning of the expression 'public servant' as contained in Section 2(c) of the Prevention of Corruption Act, 1988." Further, the Court observed the enlarged definition of "public duty" provided in Section 2(b) of the Act is "capable of surrounding any duty attached to any office inasmuch as in the contemporary scenario there is hardly any office whose duties cannot, in the last resort, be traced to having a bearing on public interest or the interest of the community at large. Therefore, such a wide understanding of the definition of 'public servant' may obliterate all distinctions between the holder of a private office or a public office which ought to be maintained. It would be more reasonable to understand the expression 'public servant' by reference to the office and the duties performed in connection therewith to be of a public character."
     
  • State through Central Bureau of Investigation v. Dr. Anup Kumar Srivastava, 2017 (4) BLJ 10 (SC): In this case, the Supreme Court while dealing with the issue of taking illegal gratification, observed that "for raising the presumption of taking illegal gratification one needs to wholly displace the presumption of innocence by proving demand and acceptance." The Court further stated that – "what constitutes illegal gratification is a question of law; whether on the evidence that crime has been committed is a question of fact. If, therefore, the evidence regarding the demand and acceptance of a bribe leaves room for doubt and does not displace wholly the presumption of innocence, the charge cannot be said to have been established. Hence, the proof of demand has been held to be an indispensable essentiality and of permeating mandate for an offence under Sections 7 and 13 of the PC Act."
     
  • B. Jayaraj v. State of A.P, (2014) 13 SCC 55:
    In this case, the issue was whether demand of illegal gratification is sine qua non to constitute the offence under Section 7. The Court held that: "In so far as the offence under Section 7 is concerned, it is a settled position in law that demand of illegal gratification is sine qua non to constitute the said offence and mere recovery of currency notes cannot constitute the offence under Section 7 unless it is proved beyond all reasonable doubt that the accused voluntarily accepted the money knowing it to be a bribe." Consequently, it also held that "Mere possession and recovery of the currency notes from the accused without proof of demand will not bring home the offence under Section 7. The above also will be conclusive in so far as the offence under Section 13(1)(d)(i)(ii) is concerned as in the absence of any proof of demand for illegal gratification, the use of corrupt or illegal means or abuse of position as a public servant to obtain any valuable thing or pecuniary advantage cannot be held to be established."

Recent Amendment In Prevention Of Corruption Act, 1988 With Special Reference To Public Servant:

The Act of 1947 was replaced by Prevention of Corruption Act 1988 which led to the wider scope of definition of Public Servant. The amendment that received the assent of the President on 26th July 2018 was brought in the line of India's ratification of the 'United Nations Convention Against Corruption (UNCAC) in May 2011.'

The present amendment has been brought akin to the UK Bribery Act, 2010 and Foreign Corrupt Practices Act, 1977, and the private sector entities/enterprises which are carrying 'business activities' has also been brought under the purview of this act. Section 9 and 10 of the Prevention of Corruption Act, 1988 states that a commercial organisation and its representative namely chairman, secretary or any other employee shall be liable under the Act if the offence defined under section 8 is committed by a commercial organisation.

The most crucial aspect to be taken note is the wide ambit of the concept of "person associated with a commercial organisation" in section 9 which includes any person who performs services for or on behalf of the commercial organisation. Consequently, a commercial organisation shall be liable for the actions of not only its employees but also of various third parties such as agents, consultants and intermediaries, to visualise a few possible instances.

Corruption Ranking Of India In The World:

Transparency International conducts an annual research into the corruption perception of different countries, and as per the 2020 report released. There is not good news for India as we have declined our ranking by 6 in comparison with previous year 2019. The lowest corruption rank of India in the world was 35 in1995 whereas highest corruption rank of India in the world was in 95 in 2011. We can see from the data that corruption rank was on very high level in 2011, 2012 and 2013 when the UPA government was in power. But in 2014 when Modi's Government become into the power for the first time, there was a tremendous decline in the corruption rank of India in the whole world. But after second time, when Modi's Government come again into the power in 2019, corruption rate started climbing once again.

Conclusion
Corruption is a social evil, which has eroded the applicability of just and fairness in the society. Probity in governance is must for the effective functioning of the government. The concept of minimum government and maximum governance can only be realized if the public servants are held accountable to their acts and omissions. It is high time to make anti-corruption laws more stringent and those public servants/officials who cause loss to the state should be held liable to make good to the loss of public exchequers.

Anti-corruption institutions such as Lok Pal, Central Vigilance Commission and Central Bureau of Investigation should be made more effective to check corruption in government institutions and this can only be possible when there is minimum government interference in these institutions. As the Apex Court has observed in Vineet Narain v. Union of India, that anti-corruption institutions should be free from executive interference and control to check corruption in the Country.

Corruption is opposed to the democracy and antithetical to the economic and social structure to any country, therefore it is very necessary that public corruption should be fairly addressed and eliminated from the society.

Bibliography

Case Laws:
  • Vineet Narain & Others v. Union of India & Another, (1998) 1 SCC 226
  • Central Bureau of Investigation v. Gelli, (2016) 3 SCC 788
  • B. Jayaraj v. State of A.P, (2014) 13 SCC 55
  • Central Bureau of Investigation v. Gelli, (2016) 3 SCC 788
  • CBI v. Dr. Anup Kumar Srivastava, 2017 (4) BLJ 10 (SC)
Statutes:
  • Lokpal and Lokayuktas Act, 2013
  • Central Vigilance Commission Act, 2003
Books:
  • Krishan Pal Malik - Lokpal and Lokayuktas Act, 2013: Critical Commentary
  • C.K. Takwani – Law Relating to Prevention of Corruption in India
Articles:
  • A Study on Corruption in India Dr. Gulshan Kumar
  • CORRUPTION AND CRIMINAL LIABILITY OF PUBLIC SERVANTS: Prevention of Corruption Act, 1988 Mayank Purohit
Websites:
  • http://www.irdindia.in/journal_ijrdmr/pdf/vol6_iss3/18.pdf
  • https://www.imf.org/EXTERNAL/PUBS/FT/ISSUES6/INDEX.HTM
End Notes:
  1. http://www.irdindia.in/journal_ijrdmr/pdf/vol6_iss3/18.pdf

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