Anti-Corruption & Bribery

In India, the law relating to corruption is broadly governed by:

• the Indian Penal Code, 1860 (now replaced by the Bharatiya Nyaya Sanhita, 2023); and
• the Prevention of Corruption Act, 1988.

The Prevention of Corruption Act is the principal anti-corruption and anti-bribery statute in India, as it consolidates the laws relating to the prevention of corruption by widening the coverage and imposing liability on both individuals and corporates for engaging in corruption and bribery. It criminalises giving and receiving bribes. However, it is necessary to obtain prior sanction from the government to prosecute a public servant for violation of the Prevention of Corruption Act.

The Indian Penal Code, 1860 and the Bharatiya Nyaya Sanhita, 2023 address bribery pertaining to elections specifically.

Additionally, Indian government officials are subject to strict regulations governed by:

• the Central Civil Services (Conduct) Rules, 1964; and
• the All India Services (Conduct) Rules, 1968.

These restrict a public servant from receiving gifts exceeding specific thresholds. Similarly, the Foreign Contribution Regulation Act, 2010 prohibits the acceptance of foreign hospitality or contributions from foreign sources by public officials such as:

• public servants;
• judges;
• government servants; and
• members of any legislature.

Violations of the act result in criminal prosecution which may lead to imprisonment.

While these laws address bribery and corruption in the public sector, there is a dearth of laws addressing private commercial bribery in India. Acts of private bribery are dealt with under the general penal and corporate laws. Apart from the substantive legislations, anti-corruption measures are also governed by regulations, rules and guidelines issued by the appropriate authorities from time to time.

India has signed and ratified the United Nations Convention Against Corruption (UNCAC) and the United Nations Convention Against Transnational Organized Crime, and associated protocols.

In June 2024, India signed the Indo-Pacific Economic Framework agreements (Pillars III and IV), which aim to:

• catalyse investment;
• strengthen measures for anti-corruption and tax transparency; and
• improve the business environment.

As a G20 nation, India is also a part of the G20 Anti-corruption Working Group, which is guided by the provisions of UNCAC. Similarly, as a member of the BRICS (Brazil, Russia, India, China, South Africa), India is also a participant in the BRICS Working Group on Anti-Corruption Cooperation, which provides a platform for exchanging best practices in the fight against corruption.

As India is not a member of the Organisation for Economic Co-operation and Development (OECD), it is not a signatory to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions. However, India does follow the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct, which set out standards for responsible business practices in areas including:

• anti-bribery;
• labour rights;
• human rights;
• IP rights; and
• taxation.

India is also a member of the Financial Action Task Force, which develops national and international policies to combat financial crimes such as:

• corruption;
• bribery; and
• money laundering.

The Vigilance Manual (updated in 2021) issued by the Central Vigilance Commission (CVC) in India is the most comprehensive guide consisting of rules, instructions and guidelines on vigilance administration. It is a readily available directive that can be accessed by individuals and corporations to obtain hands-on knowledge of the preventive and punitive anti-corruption measures employed in administration. This manual guides the law enforcement agencies in India, including the Central Bureau of Investigation, in investigating and curbing corruption and bribery-related offences.

The Office of the Comptroller and Auditor General of India issued a standing order on the role of audits in relation to fraud and corruption cases in 2006. This is a guideline for statutory auditors in using audits as a preventive mechanism for fraud and corruption. It:

• guides auditors to flag suspicious transactions and report them to appropriate authorities; and
• lays down procedures for auditors to share findings with anti-corruption agencies for further action.

The Department of Personnel and Training, Ministry of Personnel, Public Grievances and Pensions, released a Handbook for Inquiry of Officers and Disciplinary Authorities in 2013, which details procedures for handling misconduct and corruption cases in the civil services.

The Corporate Anti-Bribery Code, 2017 was issued by the Institute of Company Secretaries of India (ICSI). The code, a recommendation from the ICSI, guides private sector entities in tackling corruption. It aims to ensure that neither a company nor any of its employees indulge in bribery.

The key enforcement bodies which operate at the central (federal) and state (provincial) levels in India to enforce anti-corruption laws and regulations are as follows.

CVC: The CVC was set up by the government of India in 1964. Later, it was accorded statutory status in 1998 through an ordinance, which was followed by the CVC Act, 2003. The CVC exercises superintendence over the vigilance administration of various ministries, government departments and governmental organisations. It is empowered to inquire or investigate any complaint received against any public official under its jurisdiction. The CVC further exercises superintendence over the functioning of the Delhi Special Police Establishment (now known as the Central Bureau of Investigation), insofar as it relates to investigation into offences by public servants.

Central Bureau of Investigation (CBI): The CBI was constituted by the government of India in 1963 and was the successor organisation to the Delhi Special Police Establishment. It is a multidisciplinary investigation agency comprised of three divisions:

• Anti-corruption Division: Investigates corruption cases against public officials and employees of:
• • the central government;
  • public sector undertakings; and
  • corporations or bodies owned or controlled by the government of India.
• Economic Offences Division: Investigates major financial scams and serious economic frauds, including crimes relating to:
• • fake currency;
  • bank fraud; and
  • cybercrime.
• Special Crimes Division: This deals with serious, sensational and organised crime under the domestic penal laws and other statutes on:
• • the request of a state (provincial) government; or
  • the orders of the Supreme Court of India and high courts of the states.

Serious Fraud Investigation Office (SFIO): Established under the Companies Act, 2013, the SFIO investigates and prosecutes complex white-collar crimes and corporate fraud. It has extensive powers, including:

• conducting inspections;
• obtaining documents;
• executing search and seizure operations; and
• making arrests when warranted.

Lokpal and Lokayuktas: Constituted under the Lokpal and Lokayuktas Act, 2013, the Lokpal functions as the national anti-corruption ombudsman, while Lokayuktas operate at the state (provincial) level. The Lokpal has jurisdiction to inquire into allegations of corruption against:

• anyone who is or has been:
• • prime minister;
  • a minister in the union government; or
  • a member of Parliament; and
• officials of the central government.

Similarly, Lokayuktas are set up in every state (province) to inquire into the allegations against public functionaries.

Anti-Corruption Bureau(s): An Anti-Corruption Bureau (ACB) is the principal investigative unit of state (provincial) governments in India, which deal with corruption cases. ACBs collect intelligence to detect cases of bribery and corruption falling under the purview of the Prevention of Corruption Act and investigate these offences.

According to statistics released by the National Crime Records Bureau, between 2020–2022, a total of 4,139 cases were registered under the Prevention of Corruption Act and Indian Penal Code across India.

Up until 2022, approximately 30,691 total cases were sent for trial under the Prevention of Corruption Act and related offences of the IPC. Between 2020–2022, there were 722 convictions and 992 acquittals in cases related to corruption. By the end of the year (2022), a total of 28,665 cases were pending trial in India.

India’s anti-corruption legislation has been significantly strengthened over the years. However, several shortcomings remain, impacting the effectiveness of enforcement.

Limited scope and applicability to private entities: While the 2018 amendment to the Prevention of Corruption Act criminalises the act of bribe giving by an individual or a commercial organisation, there is a complete absence of any law criminalising corrupt practices in private sector entities. The private sector has increasingly emerged as a significant locus of corrupt practices. In a rapidly growing economy such as India, where the private sector plays a pivotal role in safeguarding investor confidence, consumer protection and ensuring competitive markets, the absence of adequate regulatory oversight facilitates malfeasance. With increasing private sector influence on public life and the economy, unchecked corruption in the private sector undermines corporate governance and national economic integrity. A robust legal framework to deter private sector corruption would enhance India’s credibility as a secure investment destination.

Limited transparency and delay in prosecution: Corruption cases often face prolonged delays in Indian courts, reducing the deterrent effect. Data from the National Crime Records Bureau shows that, as of 2022, there were over 28,000 pending corruption cases.

Lack of comprehensive legislation on lobbying and political funding: Unlike several OECD member countries, India lacks regulations on lobbying and transparency in political funding, which are significant channels for corruption. The Electoral Bonds Scheme, which allows anonymous donations to political parties, has faced criticism for undermining transparency. Recently, the Supreme Court held the Electoral Bonds Scheme to be unconstitutional, emphasising the need for greater transparency and accountability in political funding.

Non-implementation of OECD recommendations: The OECD has recommended that India provide more explicit guidance on corporate accountability to strengthen enforcement against corporate corruption.

Whistleblower protections: The existing anti-corruption laws (ie, Prevention of Corruption Act and the Bharatiya Nyaya Sanhita) contain no provisions on the protection of whistleblowers. The only law which provides such protection is the Whistleblower Protection Act, 2014. However, as per a press release issued by the Ministry of Personnel, Public Grievances and Pensions on 12 December 2024, the statute has not yet been brought into force. The government has taken the position that certain amendments are necessary to ensure that disclosures under the law do not compromise:

• the sovereignty and integrity of India;
• the security of the state; and
• other related national interests.

Moreover, the existing legal framework is deficient in providing robust safeguards, as it fails to incorporate a comprehensive witness protection mechanism for whistleblowers, instead vesting such matters within the discretionary domain of the executive.

In India, public corruption broadly includes bribery and misconduct by public officials. The Prevention of Corruption Act, 1988 describes corruption basically in terms of taking gratification other than legal remuneration in respect of an official act. The key provisions of the Prevention of Corruption Act, 1988 include the following:

• Section 7: This section penalises the act of a public servant accepting or agreeing to accept a bribe. It includes scenarios where a public servant demands, solicits or receives any form of gratification, either directly or indirectly, for themselves or another, as an inducement or reward for performing or abstaining from any official act.
• Section 7A: This provision penalises any person who accepts or obtains or agrees to accept or attempts to obtain an undue advantage as a motive or reward for inducing, by corrupt or illegal means or by the exercise of personal influence, a public servant to:
• • perform or cause the performance of a public duty improperly or dishonestly; or
  • forbear or cause forbearance in the performance of such public duty.
• Section 8: This section criminalises the act of offering or giving a bribe to a public servant. It encompasses any instance where a person provides or promises gratification to a public official to influence their official conduct.
• Section 9: This section criminalises the offence of bribery by commercial organisations, such as bodies corporate and partnership firms.
• Section 13: This section addresses criminal misconduct by a public servant, including corrupt practices such as:
• • abuse of position;
  • misuse of authority; and
  • receiving illegal gratification.

While there may appear to be a degree of overlap between the offences enumerated under Sections 7 and 13 of the Prevention of Corruption Act, a closer look would indicate that the scope of criminal misconduct under Section 13 is significantly broader. It not only encompasses the acceptance of undue advantage but also extends to acts such as misappropriation of public property and illicit enrichment during their tenure in the office. In contrast, Section 7 is confined to penalising the act of accepting gratification as a quid pro quo for official acts, thereby addressing a more specific facet of corruption.

Additionally, Section 170 of the Bhartiya Nyaya Sanhita deals with bribery specifically in the context of elections. Specifically, this provision criminalises the act of giving and accepting gratification with the object of inducing a person to exercise any electoral right or rewarding the person for having exercised any such right. Under this provision, a person who offers, agrees to give or offers to procure a gratification is also liable, thus extending the liability to any middlemen involved in bribery.

Public officials: In India, the term ‘public servant’ is defined under Section 2(c) of the Prevention of Corruption Act, 1988 to cover a wide range of individuals holding public positions. It expansively includes:

• government employees at all levels;
• officials of local authorities;
• employees of government-owned or controlled corporations;
• judges;
• arbitrators who are appointed by a court of justice or to whom a matter has been referred for decision by a competent public authority;
• election officials;
• university personnel; and
• employees or office bearers of institutions receiving government aid.

This broad definition ensures the applicability of the act’s anti-corruption provisions to various individuals entrusted with public responsibilities and authority.

Under Bhartiya Nyaya Sanhita, ‘public servant’ includes:

• government employees;
• military, navy and air force officers;
• police officers;
• judges;
• officers of courts; and
• local authority officials established by central or state legislation.

Foreign public officials: Currently, there is no legislation governing this area. However, the legislature made an attempt to address bribery involving foreign public officials by introducing the Prevention of Bribery of Foreign Public Officials and Officials of Public International Organizations Bill, 2011. This bill aimed to criminalise bribery of foreign public officials and empowers the central government to enter into international agreements for cooperative investigations and prosecutions. In this bill, ‘foreign public official’ is defined as:

This framework seeks to ensure that anti-corruption measures not only apply to domestic public officials but also address bribery involving foreign public officials in accordance with international standards. However, this bill did not materialise into a statute.

In India, private corruption or bribery in the private sector is not explicitly defined in the core anti-corruption law, the Prevention of Corruption Act, 1988.

In 2019, the Prevention of Bribery in Private Sector Bill was floated in Parliament. The bill aimed to address private sector bribery specifically. Section 2(a) of the bill defines a ‘bribe’ to include “facilitation payments, directly or through third parties, gift, hospitality and expenses which may or perceive to affect the outcomes of business transactions, which are not reasonable and bona fide”. However, this bill did not materialise into a statute.

In Indian anti-corruption law, the term ‘bribe’ is not defined explicitly. It is conceptualised as an ‘undue advantage’ (defined under Section 2(d) of Prevention of Corruption Act) and gratification intended to influence a person in an improper or dishonest manner. In fact, the term ‘undue advantage’ is defined in such broad terms that it not only encompasses pecuniary benefits but also extends to a wide range of non-monetary gains.

Bhartiya Nyaya Sanhita: Under Section 170 of the Bhartiya Nyaya Sanhita, ‘bribery’ is defined as the act of offering, promising, giving or soliciting something of value to influence someone unlawfully or dishonestly. In the electoral context, BNS criminalises both the giving and accepting of any form of gratification intended to induce or reward the exercise of electoral rights. However, public policy declarations or promises of future public action do not constitute bribery under this section.

In the Prevention of Corruption Act, 1988, abetment and attempt of bribery are also punishable. Additionally, criminal misconduct by a public servant is criminalised under Section 13, including:

• dishonest and fraudulent misappropriation of property entrusted to the public servant; and
• unjust enrichment during the period of office.

The act also includes specific provisions on the punishment of habitual offenders.

Yes – under Indian anti-corruption laws, both individuals and companies can be prosecuted for corrupt practices. The Prevention of Corruption Act, 1988 imposes criminal liability on both natural persons (individuals) and legal entities (companies) engaged in corrupt practices.

Insofar as the liability of individuals is concerned:

• Section 7 criminalises the acceptance of bribes by public servants;
• Section 8 targets those who offer or give bribes; and
• Section 13 covers broader instances of criminal misconduct, such as abuse of official position by public servants.

With respect to corporate liability:

• Section 9 criminalises acts where commercial organisations, including companies, bribe public officials; and
• Section 10 extends liability to individuals in charge of, or responsible for, the management of the organisation if its employees or agents engage in bribery.

Yes – as per Section 9(3)(a) of the Prevention of Corruption Act, 1988 the term ‘commercial organisation’ includes foreign companies that conduct their business or part thereof in India. Consequently, such foreign corporations engaging in corrupt practices on Indian soil are subject to the same liabilities as domestic companies.

Specifically, under Section 9, where any person associated with a commercial organisation offers, promises or gives any undue advantage to a public servant with the intent to obtain or retain business or to secure an advantage in the conduct of business, the commercial organisation will be held liable for such conduct. This liability extends to acts constituting bribery, as penalised under Section 8 of the Act, whereby an undue advantage is offered to induce a public servant to improperly perform a public function or to reward such improper performance.

The Prevention of Corruption Act, 1988 has limited extraterritorial reach, as Section 1(2) extends its applicability only to Indian citizens residing outside India. Notably, the scope of applicability of certain provisions – such as Sections 7A, 8 and 9 – is sufficiently broad to encompass any individual who accepts or obtains an undue advantage on behalf of another person, where such acceptance serves as a motive or reward for unlawfully inducing a public servant in relation to the improper discharge of official functions. This would extend the liability to any foreign individual or commercial organisation involved in bribery of a public servant in India.

In addition, the Fugitive Economic Offenders Act, 2018 allows for the classification of individuals as ‘fugitive economic offenders’ if they have an arrest warrant for significant financial crimes – including fraud, corruption or tax evasion – involving amounts over INR 1 billion.

In India, gifts, hospitality and expenses may be treated as bribes if they are given with the intent to influence a public official’s actions or decisions within their official capacity.

While the Prevention of Corruption Act, 1988 does not cover this aspect, the All India Services (Conduct) Rules, 1968 and the Central Civil Services (Conduct) Rules, 1964 address the receipt of gifts, hospitality and expenses by public officials. These rules prohibit a public official from accepting gifts – including free transport, boarding, lodging or other services and pecuniary advantage – exceeding a stipulated value from anyone who has no official dealings with them.

Though the term ‘facilitation payments’ is not explicitly defined, payments of such kind are strictly prohibited under the Prevention of Corruption Act, 1988.

The law makes no exceptions for such payments, regardless of their purpose.

Section 7 of the Prevention of Corruption Act prescribes imprisonment for up to seven years for public servants for obtaining, accepting or attempting to obtain an undue advantage from any person with the intention to:

• perform or cause to perform a public duty improperly or dishonestly; or
• forbear or cause forbearance to perform such duty.

In fact, the law is so stringent that obtaining, accepting or attempting to obtain an undue advantage will itself constitute an offence even if the performance of a public duty by a public servant is not or has not been improper.

Similarly, giving or offering undue advantage to any public servant to induce or reward them to perform a public duty improperly is punishable by imprisonment for up to seven years under Section 8 of the act.

In India, bribery through intermediaries or third parties is treated as a serious offence.

Section 7A of the Prevention of Corruption Act, 1988 criminalises the conduct of any person who accepts, obtains or attempts to obtain an undue advantage – whether for themselves or for another – as a motive or reward for unlawfully inducing a public servant, through personal influence, to improperly or dishonestly perform or abstain from performing a public duty, or to cause another public servant to do so. This extends the liability to third parties involved in bribery.

Similarly, Section 8 also extends the liability to any third party that gives or promises to give an undue advantage to another person with the intention to induce or reward a public servant for improper performance of a public duty.

In addition, Section 7 of the Prevention of Corruption Act, 1988, read with Section 120B of the Indian Penal Code (now Section 61 of the Bharatiya Nyaya Sanhita, 2023), criminalises the act of offering or promising bribes to public servants, including when the bribe is given through an agent, intermediary or third party. Both the bribe-giver and the third party can be held liable for engaging in corrupt practices.

Yes, a company can be held liable for bribery committed by its management or employees. The Prevention of Corruption Act, 1988 includes provisions that specifically address corporate liability for bribery, including actions taken by company management or employees:

• Section 9 – offence relating to bribing a public servant by a commercial organisation: This section prohibits a commercial organisation from giving or promising undue advantages (bribes) to public servants to gain or retain business or business advantages. The company itself can be fined if an associated person (eg, an employee, agent or representative) engages in bribery on behalf of the company. However, a defence is available to the company if it can prove that it had ‘adequate procedures’ in place to prevent bribery. This means that companies are encouraged to implement effective anti-bribery policies and compliance mechanisms to avoid liability.
• Section 10 – person in charge of commercial organisation to be guilty of offence: If a commercial organisation commits an offence under Section 9 and it is proven that a director, manager, secretary or any other officer of the company consented to or connived in the bribery, those individuals will be personally liable for the offence. Such individuals can face imprisonment for three to seven years and a fine if they are found to be directly involved or complicit in the bribery.

Section 9 of the Prevention of Corruption Act, 1988 criminalises the act of bribery by a commercial organisation. Section 3(a) of this provision defines a ‘commercial organisation’ as follows:

1. a body which is incorporated in India and which carries on a business, whether in India or outside India;
2. any other body which is incorporated outside India and which carries on a business, or part of a business, in any part of India;
3. a partnership firm or any association of persons formed in India and which carries on a business whether in India or outside India; or
4. any other partnership or association of persons which is formed outside India and which carries on a business, or part of a business, in any part of India.

Therefore, both domestic and foreign subsidiaries can be held liable for bribery in India.

In India, a successor company is generally not held liable for bribery committed by legacy companies following a merger or acquisition. In Religare Finvest Ltd v State of NCT, the Supreme Court of India clarified that criminal liability does not automatically transfer to the successor entity. The court emphasised that such liability is personal to the corporate offender that ceases to exist and cannot be imposed on the new entity merely due to the merger. This ruling indicates that while individual officers of the dissolved company may still face prosecution, the successor company itself is exempt from inheriting criminal liabilities, thus potentially allowing companies to escape accountability for past misconduct through corporate restructuring.

In India, there is no explicit legal mandate requiring companies to implement a comprehensive anti-corruption compliance programme. However, it is common practice among large corporations and multinational enterprises operating in India to establish comprehensive anti-bribery and anti-corruption policies designed to ensure the implementation of adequate procedures to prevent, detect and respond to acts of bribery and corruption.

Some prominent Indian companies – such as Tata Steel Limited, Reliance Industries Limited and L&T Finance Limited – have formulated their own policies which are accessible in the public domain.

While the Indian government has yet to issue specific guidelines for implementing comprehensive anti-corruption compliance programmes, organisations can adopt a multi-faceted approach to ensure compliance.

Key components of an effective anti-corruption compliance programme include the following:

• Clear and comprehensive policies: Organisations should craft well-defined and straightforward policies – commonly known as anti-bribery and anti-corruption frameworks – that clearly set out what is permitted and what is not in business dealings. These should cover concerns such as:
• • bribery;
  • unethical payments;
  • conflicts of interest; and
  • fraud.
• It is equally important to:
• • communicate these standards to all employees; and
  • reinforce them through regular training and awareness initiatives.
• Thorough due diligence: A sound due diligence system must be in place to evaluate the background and integrity of:
• • vendors;
  • third-party agents; and
  • clients.
• This includes:
• • reviewing their financial stability;
  • verifying regulatory approvals; and
  • understanding their reputation before establishing any business relationship.
• Effective internal controls: Strong governance systems should be established to keep a close check on areas such as finance, procurement and approvals. Key measures include:
• • dividing responsibilities among staff;
  • conducting internal reviews; and
  • ensuring protections for those who report concerns in good faith.
• Ethical training and awareness: Consistent training on ethical conduct and legal obligations should be part of the organisation’s culture. These sessions should educate employees about laws such as the Prevention of Corruption Act and relevant corporate regulations. Staff should feel supported and encouraged to speak up through confidential reporting tools.
• Monitoring and reporting systems: A good compliance programme includes mechanisms for ongoing review and early detection of misconduct. Companies should invest in audit procedures and compliance assessments that can measure how well the policies are working and address any gaps proactively.

The Prevention of Corruption Act, 1988 does not impose specific requirements to keep records and books for maintaining internal accounts of assets. The regulations governing books and records in India are primarily dealt with under the following laws.

Companies Act, 2013: The Companies Act mandates that companies maintain detailed financial records, which must accurately reflect all transactions, expenditures and receipts. Section 128 requires companies to keep proper books of account – including records of sales, purchases, income and expenses – which must be kept at the registered office or other designated locations.

The act also mandates the preservation of records for at least eight financial years, enabling regulators to examine past transactions if necessary.

Furthermore, under Section 134, the directors of the company must affirm in the financial statements that adequate internal financial controls are in place, adding a layer of accountability.

The Companies Act provisions on fraud (Section 447) apply to any falsification of records, which could lead to serious consequences for directors and officers if records conceal corrupt activities.

Income Tax Act, 1961: Under the Income Tax Act, companies must maintain accurate records of all financial transactions. Incorrect records may lead to tax evasion allegations, as they are often closely scrutinised in corruption investigations. The act mandates documentation supporting expenses, deductions and claims, which may be inspected by the tax authorities in the case of audits.

Accurate books are essential to demonstrate that transactions, particularly with third parties, are genuine and not a front for corrupt payments.

Goods and Services Tax (GST) Act, 2017: The GST Act requires companies to maintain detailed records of all taxable supplies, including invoices and receipts. Accurate GST records help to demonstrate compliance in commercial transactions, reducing the likelihood of bribery hidden within inflated invoices or fabricated transactions.

GST records must also be preserved for a specified period, allowing authorities to trace financial flows and identify any irregularities.

Although such records may not be maintained with the express purpose of addressing corrupt practices, they frequently prove instrumental in the investigation and prosecution of socio-economic offences, such as corruption.

Under the Companies Act, 2013, the board of directors is responsible for ensuring the company’s compliance with legal and regulatory obligations. Section 134 requires the board to:

• disclose any material financial irregularities; and
• confirm in the annual report that appropriate internal financial controls are in place.

Section 143(12) mandates that if auditors detect fraud involving an amount exceeding INR 1 billion, they must report it directly to the central government. For smaller amounts, the auditor must notify the company’s board of directors or audit committee. This provision imposes a significant obligation on auditors to ensure that any financial irregularities, including potential anti-corruption violations, are reported.

Additionally, the Companies Act contains strict provisions under Section 447, which classifies fraud as a criminal offence, underscoring the importance of timely and accurate reporting of irregularities.

Publicly listed companies in India have additional reporting obligations under the Securities and Exchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations, 2015. Material events, including instances of fraud or financial irregularities, must be disclosed to the stock exchanges to ensure transparency for shareholders and investors. Failure to disclose such information may result in penalties or other regulatory actions by SEBI.

While Indian law does not currently impose a legal obligation on companies to implement anti-corruption programmes, the absence of such measures does not, in itself, lead to regulatory or criminal consequences. Nevertheless, many organisations choose to adopt anti-corruption policies to:

• safeguard against the risk of being implicated in bribery or corrupt practices; and
• demonstrate a commitment to ethical business conduct.

While India has no formal leniency policy like those found in some jurisdictions (eg, under the UK Bribery Act), there are factors that can influence:

• the severity of penalties; and
• the overall outcome of investigations.

Companies that voluntarily disclose their involvement in corruption can potentially benefit from a more lenient approach. Section 8(2) of the Prevention of Corruption Act, 1988 exempts a person from liability for offering bribes, provided that they:

• inform the law enforcement authority or investigating agency before offering or giving the bribe; and
• assist such authority in the investigation against the person accepting the bribe.

However, the extent of any leniency will depend on various factors, including:

• the severity of the offence;
• the level of cooperation; and
• the overall conduct of the company.

Yes, as per the proviso to Section 9(1) of the Prevention of Corruption Act, 1988, the existence of an anti-corruption compliance programme constitutes a defence for a commercial organisation in cases of violations.

There are no specific defences stipulated with respect to anti-corruption.

In India, companies cannot use plea bargaining as a defence or settlement tool in cases involving corruption and bribery. The concept of plea bargaining was introduced in India in 2005 through an amendment to the Criminal Procedure Code, 1973. Section 265A of the code (now Section 289 of the Bharatiya Nagrik Surakhsa Sanhita, 2023) permits plea bargaining for certain offences, but it excludes:

• serious offences with a maximum punishment of more than seven years;
• offences against women and children; and
• offences affecting ‘socio-economic conditions’. Corruption and bribery fall within the category of socio-economic offences, as they impact public trust and the integrity of governance. Consequently, companies accused of corruption or bribery cannot opt for plea bargaining.

In India, violations of anti-corruption legislation can lead to a range of penalties, including:

• imprisonment;
• fines; and
• other ancillary consequences.

Additionally, there are several non-exhaustive or collateral penalties that may apply to companies and individuals involved in corruption offences.

Imprisonment and fines: The Prevention of Corruption Act, 1988 prescribes strict penalties for public servants and individuals involved in corrupt practices. Public servants convicted of taking or giving bribes may face imprisonment of up to seven years, extendable to life imprisonment in certain cases, along with fines. Private individuals or entities that aid or abet corrupt practices are subject to similar penalties.

Attachment and confiscation of assets: The Prevention of Money Laundering Act, 2002 allows for the attachment and confiscation of assets derived from the proceeds of crime, including corruption. If found guilty of corruption-related offences, individuals and companies may face the seizure of assets and properties linked to the offence, in addition to other penalties.

Exclusion from public procurement and contracts: Under guidelines from the Central Vigilance Commission and other procurement policies, companies found guilty of corruption may be blacklisted or barred from participating in future government tenders and public procurement processes. This debarment acts as a significant deterrent, especially for companies that are reliant on public contracts.

Disqualification from commercial activities and director positions: Under the Companies Act, 2013, directors of a company convicted of offences involving moral turpitude, including corruption, may face disqualification from holding directorships in any company for up to five years. Furthermore, convicted entities may lose certain licences or permits required for specific commercial activities, depending on the sector and regulatory authority.

Judicial winding up: In extreme cases, the Companies Act allows for judicial winding up if a company’s activities are found to be against the public interest, which can include involvement in corrupt practices. This, however, is a rare and severe penalty, typically reserved for cases involving significant harm to the public or national interest.

There is no specific statute of limitations under the Prevention of Corruption Act, 1988 itself. This means that offences under the act – such as bribery, abuse of power by public officials or other corrupt practices – can generally be prosecuted without a time limit.

India’s anti-corruption framework has undergone a notable transformation in recent years, driven by:

• stringent laws;
• increased governmental scrutiny; and
• heightened public vigilance.

Enforcement efforts have been bolstered through legislative reforms and more assertive action by investigative agencies such as:

• the Central Bureau of Investigation; and
• the Directorate of Enforcement.

While sweeping legislative changes may not be formally underway, the legal landscape continues to evolve through judicial developments. The judiciary has played an active role in shaping anti-corruption enforcement, interpreting existing laws to strengthen accountability.

For companies in India, establishing a strong anti-corruption compliance programme is essential in order to:

• navigate India’s regulatory environment; and
• minimise corruption risks.

The following points should be borne in mind to ensure the smooth implementation of anti-corruption compliance programmes:

• Develop and enforce a code of conduct that clearly defines acceptable and unacceptable behaviours regarding gifts, hospitality and interactions with government officials. Ensure that this code is aligned with Indian laws, including the Prevention of Corruption Act, 1988.
• Conduct periodic training sessions for employees, contractors and third parties. In India, where cultural norms can sometimes blur ethical lines, continuous training is crucial to ensure that all stakeholders understand the importance of compliance and ethical practices.
• Given the risks associated with third-party interactions in India, conduct comprehensive due diligence on vendors, agents and joint venture partners. These include background checks, compliance certifications and regular audits to ensure adherence to the company’s anti-corruption policies.
• Conduct regular audits and monitoring – this helps to detect red flags and ensure that compliance policies are followed. Engaging independent auditors or compliance professionals can:
• • provide an objective perspective on adherence; and
  • identify areas for improvement.