India: The Anti-Bribery And Anti-Corruption Regulations In India

Last Updated: 6 August 2019
Article by STA Law Firm

India is a crucial country from a global perspective and is one of the largest economies in the world. The growth is also significant with the nation projected to climb further up the worldwide economic ranks in the coming years. Further, the country is the second most populated in the world, with over 1.3 billion residents. With it being such a vast nation, there are many things which must be taken into account from an economic and political perspective.

One issue which India has unfortunately become known for relates to the level of corruption that occurs. Considering that it is among the most significant of economies in the world, it is ranked at number 78 in the global ranking, though this position is also one which was worse in the years past. Bribery is also a concern, though it generally falls under the branches of corruption.

The issues that this gives rise to are severe and numerous. Corruption significantly impacts the development of the nation and its economy overall. When considering just how rapid the growth currently is, the countries position could have been even higher among the ranking than it is.

Corruption is an issue that many governments have had to combat through the ages; it is something that will likely always exist. However, a vital step to preventing and limiting it is to ensure the legislative structures in place considers the possibilities and provide repercussions which can receive enforcement through the appropriate means.

India has successfully introduced regulations in recent years attempting to achieve just this. When considering its recent climb up the global index, there are certainly improvements which can be felt and calculated. If the nation manages to stem the flow of corruption and bribery significantly enough, the results in terms of economic development will be highly visible. The country will propel forth at a rate unseen before the improvement, which can only be seen as good for India.

The current regulatory structure of India will receive exploration and analysis here, and the potential future of the country will also be looked into and explored.

The Original Preventative Regulation

The original regulation which originally concerned or discussed bribery and corruption was the Indian Penal Code. This law forbade the providing of bribes to individuals and also forbade officials, public servants and those in certain positions of power from accepting valuable gifts.

The Indian Penal Code was enacted initially in 1860, making a significantly old regulation. It was also a regulation which did not adequately manage the concept of bribery and corruption either, as the issue is still prevalent to this day.

The reason the law was this ineffective at tackling the matter was that it was a substantial regulation covering all aspects of criminal law in the country. As such, only a small section related to the topic at hand. To truly tackle the issue head-on, a specific regulation related to anti-corruption and bribery needed to arise. That is where the POCA came in.

Prevention of Corruption Act (POCA)

In 1988, the Prevention of Corruption Act (Act Number 49 of 1988) received its introduction in India to put the brakes on corruption and allow the nation to break free of the shackles. It also aimed to allow for more considerable progress towards more clean and rapid development. To this day, it is the primary law on the matter, though there have occurred amendments during its 31 years of effectiveness. The most recent of these amendments arose in 2018, and all of this shall receive discussion ahead. Further to this, the regulation shall receive a close look from an international perspective, and the effect shall be sifted through thoroughly.

Thus, to begin with, the regulation relates to public servants. These are individuals who are often most approached due to their positions and responsibilities, with bribes. This concept receives a definition under Section 2C of the POCA. However, they are not the only group of people, and as such, it would initially seem as though the regulation is lacking. However, there are certain additions here.

The case of Central Bureau of Investigation, Bank Securities & Fraud Cell v. Ramesh Gelli and Ors, which occurred in 2013, specified a new party which would fall under the umbrella of a public servant. India has a hybrid legal system which is somewhat between the civil and common law types. However, overall, it relates more closely to the common law system, and as such, case laws play a crucial role in deciding court outcomes. This specific case occurred in the Supreme Court, the court of the highest power in India, and as such, its decision is law.

The case itself concerned banks and their CEOs. The decision was reached that such individuals fall under the category of a public servant and therefore are not allowed to receive bribes from any individual or organisation. The case judgement mentions any individual who holds office through which they perform civic duties, should fall under the category bank CEOs do indeed.

The methods that constitute a bribe are as follows:

  • Anything that could give rise to undue advantage for one party over another would constitute as such; this could include financial gain, though;
  • This matter was initially the case. However, any form of undue advantage is now also specified and covered by the law.

A case which relates to this is that of K.M.Subramanian v State of Tamil Nadu Rep in which the defence party was accused of accepting a bribe. They were considered a public servant and received gratification beyond what is allowed. The only type of gratification permitted is remuneration only. As per the POCA regulation, they were found guilty beyond a reasonable doubt. An appeal was attempted, though the idea dismissed.

However, once again, this does not cover the entire picture. The public sector entities feel the effects, though private companies do not fall within the law's boundaries. Compared to many other nations, this is a significant disadvantage as the law only covers a proportion, all be it an essential portion of the overall economy.

Until more recently, the regulation had a further issue. While the receiver of the bribe has and always will receive punishment as per the law, the individual who provides the inducement could only be penalised for the act of abetting the receiver. As such, the act of giving a bribe was not overly risky.

Amendments to the POCA through the Years

2018 brought about some crucial changes to the POCA regulation. One fundamental change relates to the issue as mentioned earlier concerning those individuals who provide bribes. As of the amendment, these individuals can be criminally prosecuted rather than being prosecuted as an abettor to the situation. This change offers significant repercussions for the other side of the bribery situation and will likely reduce the rates of bribery by merely making the risk far greater. If one is found to be guilty, they can receive up to seven years of jail time.

Further, commercial organisations will also be liable in the cases where they or an individual from within is found to provide bribes. Any individual in a position of power in those commercial entities will also be liable to receive prison time and a fine.

Another aspect that has seen an amendment relates to property that is attached to the bribery situation. It is now easy to connect said property to the claim which was not possible in the past though this regulation but rather through the likes of the anti-money laundering law. This change will simplify the processes which are necessary to help optimise the rules and their enforcement.

Finally, the amendment Bill requires that such cases are brought forward as soon as possible and should receive their judgements within a period of two years.

Conclusion

India is not in an ideal place when it comes to corruption and also global perceptions of corruption and bribery. There is certainly an issue in the country, though regulations and changes have arisen in more recent years to combat the problem.

Arguably the biggest concern for India is that they are among the largest and fastest developing nations in the world. Currently the number 6 largest economy and projected to move up the ranks in the coming years, and with one of the most significant global populations, there is, this growth is none the less being severely hindered.

Changes are coming, though, and the regulations that are currently in place have risen because the issues are known. The only matter now is to find the appropriate solutions for which the government is hard at work. There are also definite signs of progression with the global index of corruption ranking on a steady and continuous rise. The recent 2018 amendment Bill also brought about changes as previously mentioned to further the goal of a corruption-free India.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions