Law Commission releases 254th report on Prevention of Corruption Act; Lambasts Legislature for lifting laws from London

The 20th Law Commission chaired by Justice AP Shah recently released its 254th Report on the Prevention of Corruption (Amendment) Bill, 2013. The Report states that some of the amendments proposed to be made by the Bill have been lifted directly from the UK Bribery Act of 2000, paying little attention to the difference in context of the two legislations..One of the fundamental flaws is that the Legislature failed to take into consideration that the Bribery Act applies to any person and is not restricted to public servants, as is the case with India’s corresponding Act. The Report stated,.“…the approach of the 2013 Bill to transplant certain provisions from the UK Bribery Act, while well intended, is misconceived and will serve to create further confusion and ambiguity.”.The amendments were necessitated by India’s ratification of the United Nations Convention Against Corruption (UNCAC) in May 2011. The Bill was introduced in the Rajya Sabha on 19th August 2013 to amend the PC Act, 1988, the Delhi Special Police Establishment Act, 1946 and the 1944 Criminal Law Ordinance. At a Cabinet meeting on 12th November 2014, an informal and improved version of the 2013 Bill (2014 amendment) was circulated and it was decided to have the views of the Law Commission on the issues relating to the proposed amendments..The following are the recommendations made by the Law Commission in its Report:.Deletion of ‘undue financial or other advantage’ and ‘relevant’.Section 7 deals with acts relating to a public servant being bribed. The Report states that the scope of the provision which lays down the ingredients of bribery has been narrowed, rather than broadened, as a consequence borrowing from the UK Act..The phrase “undue financial or other advantage” has been lifted from UK’s Bribery Act without any clear explanation of the distinction attempted to be drawn, if any, between ‘due’ and ‘undue’ financial or other advantage. The Report stated,.“…“financial or other advantage” being interpreted using ejusdem generis, does not seem to cover sexual favours in return for the public servant’s acts or omissions. The proposed amendment is actually narrowing the scope of corruption, instead of the stated intent of expanding it.”.Thus, the Law Commission recommended that the term “undue advantage” be used instead, where,.“(d) undue advantage means any gratification whatever, other than legal remuneration.Explanation 1: The word “gratification” is not limited to pecuniary gratifications or to gratifications estimable in money.Explanation 2: The expression “legal remuneration” is not restricted to remuneration paid to a public servant, but includes all remuneration which he is permitted by the Government or the organisation, which he serves, to receive.”.The Commission also recommended that the word “relevant”, where it appears before “public function or activity” should be dropped from the entire Act. The UK Bribery Act sought to punish private acts of bribery, but wanted to classify only some of them as punishable. This is not relevant in the Indian context because the PC Act only deals with corruption amongst public servants..Revamping of Section 7.Section 7(1) deals with situations where a public servant takes a bribe in return for performing a public function “improperly”. On the face of it, this provision does not seem to cover situations, which are very common in India, where public servants take bribes to perform their functions ‘properly’..This is another result of copying sections 7(1) (a), (b), (c) and (d) from the Bribery Act verbatim. In the words of the Commission,.“Having four sub-sections seem to suggest that section 7(1)(a), (c) and (d) are required because there are certain cases, which are not covered by section 7(1)(b), or where the mere act of asking for a bribe is not a criminal offence. That cannot have been the intention of the Legislative in expanding the scope of the bribery offence under section 7.”.Moreover, the Report stated that the PC Act only deals with corruption by public servants and already defines the terms “public servant” and “public duty” in section 2 of the 1988 Act. For this reason, the definitions under section 7(2) are not relevant or necessary in the Indian context, and in fact, will only create confusion..Another interesting point is that section 7(2)(a)(iii) states that a the person performing a public function or activity is expected to perform it impartially and in good faith. Even though the same provision is contained in the UK Act, the UK Law Commission had stated that “the duty to act in good faith is not the same as a duty to act impartially,” and therefore treats the two as disjunctive conditions. Section 7(2)(a)(iii) places both conditions simultaneously on the public servant..Illustrations to clarify sections 8(a) and (b).Section 8 of the Act aims to hold the person bribing the public official liable. Sections 8(a) and (b) to be amended to provide illustrations in order to bring clarity..“Illustration for section 8 (a): A person, ‘P’ gives a public servant, ‘R’ Rs. 10,000 to ensure that he is granted a license, over all the other bidders. P is guilty of an offence under this subsection.Illustration for section 8 (b): A person ‘P’ goes to a public servant, ‘R’ and offers to give him Rs. 10,000 to process his routine ration card application on time. P is guilty of an offence under this sub-section.”.Guidelines for commercial organisations under section 9.Section 9 holds a commercial organisation liable for failure to prevent persons associated with it from bribing a public servant to obtain/retain business or an advantage..Section 9 of the UK Act, however, creates a mandatory obligation on the Secretary of State to publish guidance about procedures that relevant commercial organisations can put in place to prevent persons associated with them from bribing officials..However, the proposed amendment to section 9 of the 2013 Bill does not require any such guidance and places no obligation on the government in this regard..As stated by the report,.“This provision will lead to an immediate and significant impact on the conduct of business by corporations, especially in light of the fact that they will not have any clarity on what is expected of them and will not even know if the procedures and processes they adopt are in compliance or in possible breach…this might also impede the efficient functioning of small businesses…”.Reduction of liability under Section 10.Section 10 extends the liability of the commercial organisation involved in bribery to every person in charge of and responsible to the organisation for the conduct of its business. The Law Commission stated that Section 10(1) of the 2013 Bill is overbroad and unlike the provisions in the UNCAC or the UK Bribery Act. It is recommended that only such director, manager, secretary or other officer shall be guilty of the offence and shall be liable to be proceeded against with whose consent or connivance the offence was committed..Discrepancies in quantum of punishment.A conjoint reading of the sections 12 and 15 under the 2013 Bill reveals that the minimum punishment for the abetment of any offence, including the attempt to commit an offence is three years, whereas the minimum punishment of actually attempting an offence is two years. There is a clear discrepancy insofar as the punishment given for the principal act (of attempt) is less than the abetment of the act.