Prevention of Corruption Act, 1988

Evolution of the Act

Initially, the Indian Penal Code, of 1860 dealt with bribery and corruption in
situations involving public servants inside the Indian Justice System.
However, it was seen throughout the 1945s that the then-existing law was
insufficient to handle the exigencies, and an issue was felt to establish unique
laws with bribery and corruption, so the Prevention of Corruption Act, of
1947 was adopted impressively. The 1947 Act was later amended twice, first
by the Criminal Law Amendment Act of 1952 and then by the Anti-Corruption
Laws (Amendment) Act of 1964, both of which were based on the
recommendations of the Santhanam Committee.

As a result, the 1947 Act served as a model for the 1988 Prevention of
Corruption Act, which went into effect on September 9, 1988. It was aimed at
making anti-corruption legislation more effective by broadening their
inclusion and strengthening the requirements to make the general resolution
more realistic and to eliminate corruption in government offices and public
sector organisations in India. The purpose of the Prevention of Corruption Act
aims to combat corruption in different government organisations and public
sector entities in India

Distinctive features of the Act

The following are some of the key features of the Act:

1. It has broadened the definition’s application to include terms like

“public duty” and “public servant” under Section 2 of the Act’s
definition clause.
2. According to the Code of Criminal Procedure, 1973, it has transferred
the burden of proof from the prosecution to the person accused of the
crime.
3. The Act’s requirements are very clear: an officer with at least the rank
of Deputy Superintendent of Police must conduct the inquiry.
4. The 1988 Act broadened the definition of “public servant” to include
Central Government personnel, union territories, nationalised
banks, University Grants Commission (UGC), vice-chancellors,
academics, and others.
5. The Act criminalizes corrupt conduct like bribery, misappropriation,
acquiring a monetary advantage, having assets disproportionate to
income, and so on.

Appointment of Special Judges

Section 3 - Appointment of Special Judges:
The Central Government or State Government can appoint special judges
through an official notification in the Gazette for specific areas or cases.
 1. Any offense punishable under this Act.
2. Any conspiracy, attempt, or abetment related to the offenses
mentioned in (a).

To be eligible for appointment as a special judge under this Act, a person

must have served as a Sessions Judge, Additional Sessions Judge, or Assistant
Sessions Judge under the Code of Criminal Procedure, 1973.
Section 4 - Cases Triable by Special Judges:
1. Special Judges, designated under the Prevention of Corruption Act, are
the only ones allowed to handle corruption cases mentioned in Section
3(1) of the Act. Regular courts can't handle these cases.
2. The Special Judge responsible for a specific area handles cases related
to corruption that occur within that area. If there are multiple Special
Judges in an area, the Central Government can specify which one
should handle a particular case.
3. Special Judges can also try other related offenses not specifically listed
in Section 3. For instance, if a person is accused of corruption and
other crimes under regular criminal law, these can be tried together in
one trial.

Speedy Trial:
The Act stresses the need for a quick trial. Ideally, a corruption case should
be completed within two years. If it takes longer, the Special Judge must
provide reasons for the delay. Extensions, up to six months at a time, are
allowed, but the total trial duration should not typically exceed four years.
CO4 - Students shall also learn about the Prevention of Corruption
Act

Offences and Penalties under the Act (Sec. 7-16)

Accepting rewards, influencing public officials, and accepting gifts

Sections 7 to 11 of the POCA define cases of receiving gratification,

influencing public officials, or accepting gifts. The Act categorises offences
according to the severity of their effects. Similarly, actions of abetment,
conspiracy, agreement, and attempt to commit these offences have been
made criminal since it is more vital to nip bribery and corruption in the bud.
Various actions have been classified and rendered punishable under various
Sections.

It is crucial to note that these parts are currently being requested to be

significantly changed in light of India’s duties under the UNCAC. The
provisions of the Prevention of Corruption Act as they currently exist are
detailed below. The Act’s provisions for offending transactions always include
a public servant and illicit remuneration in conjunction with obtaining a
favour from the public servant or as an incentive or reward for the public
servant.
Section 7 allows public workers to receive rewards other than lawful pay in
exchange for doing an official act. According to the explanation for Section 7,
gratification is not limited to monetary or monetary-equivalent gratifications.
However, it is equally crucial that such a demand be made by the public
servant, and the mere possession of the valuable property, in the absence of
proof of such a demand, may not result in guilt under Section 7 of this Act.

When a public servant takes or gets illicit gratification for himself or another
person, the act is criminal. The term gratification has also been used
extensively, and it refers to a variety of things. Within itself, there are
instances and transactions. The term “gratification” is not just limited to
monetary or monetary-equivalent gratifications

Section 8 prohibits obtaining gratification by corrupt or criminal means to

influence a public worker. The phrase “whoever accepts or acquires, or
agrees to accept, or seeks to obtain” is used throughout the provision and
has been determined to apply to both public workers and non-public
servants.

The main distinction between Sections 8 and 9 is that Section 8 allows the
use of “personal influence” to secure favour or disfavour, whereas Section 9
contemplates the use of “corrupt or criminal methods.” Although Section 8
uses the term “corrupt,” it is not defined in the Prevention of Corruption Act.

A public servant who receives a valuable object from a person who is

involved in any business or transaction involving that public official might be
prosecuted under Section 11. The mechanism of this provision requires public
employees to acquire something of value while doing their official duties, and
these advantages must primarily benefit the employee or any other person.

According to Section 12, whoever aids any crime defined under Sections 7
to Section 11 regardless of whether the crime is committed as a result of the
aid shall be punished with imprisonment for a term that shall not be less than
three years but which may extend to seven years, as well as being subject to
a further five years in prison.

Section 13 of the Act enables the prosecution of a repeat offender and more
significantly, makes a public employee who:

1. Gets any valuable item or financial gain by corrupt or criminal means,

2. Acquires said item by abusing his position as a public official or,
3. While serving as a public servant, obtaining something of value or a
financial benefit for someone else without serving the public interest.

Without evidence of demand, the mere possession and seizure of cash from a
subject of an inquiry do not constitute a violation of Section 7 or Section
13(1)(d) of this Act. In P. Satyanarayana Murthy vs The District Inspector of
Police (2015), the Supreme Court ruled that the use of corrupt or illegal
means or abusing one’s position as a public servant to obtain any valuable
item or financial advantage cannot be deemed to have been proven in the
absence of any proof of a demand for illegal gratification.
Is this Act applicable to private individuals as well

As previously stated, the Prevention of Corruption Act of 1988 applies to

public workers. To some extent, it also applies to a segment of private
individuals. Though the Prevention of Corruption Act of 1988 punishes
violations committed by public workers, there are a few occasions where it
also applies to private individuals.

Section 8 describes the circumstances in which a person seeks illicit

gratification in order to influence a public worker. Thus, anytime an illegal
payment is received by a person other than a public worker under the criteria
specified in Section 8 of the Act (which are the same as those specified in
Section 7), that person is equally responsible for the violation. The Act
provides for penalties ranging from six months to five years in jail, as well as
a fine. Similarly, activities undertaken by individuals who utilise their personal
influence with public workers to obtain illicit gratification are likewise
prohibited by the Act.

Thus, this Section 8 applies to anyone who has a connection to public workers
who are engaging in corrupt actions. Given our country’s V.I.P. mentality, this
is a critical provision. There are a lot of people who are relatives,
acquaintances, or friends of public workers who brag about their relationship
with such public servants and try to obtain illicit advantages in a variety of
areas. Furthermore, this regulation inhibits public officials from obtaining
illicit advantages by concealing their identities behind the identity of another
individual.

Whether it is illegal to abate some offences

If a public employee who has been charged with an offence under Sections 8
or 9 aids and abets the actions of those other people, the act of aiding is
itself criminal under the Act, Whether the crime was done as a result of the
abetment, in this case, is irrelevant. The abettor will be subject to a fine in
addition to a sentence of imprisonment that must be at least six months long
but may not exceed five years.

As a result, the abettor will face the same form of penalty. It is a positive
feature when it comes to preventing people from assisting others to commit
crimes under the Act, as it provides the same level of penalty for the abettor
regardless of whether the offence aided is committed or not. Similarly,
Section 12 makes it a crime to aid and abet an offence described in Sections
7 and 11. Section 7 makes it a crime for a public officer to accept a reward
other than lawful pay in exchange for performing an official act.

Section 11 makes criminal acts of a public officer getting valuable things

without compensation from the person involved in the proceeding or
transaction undertaken by such a public servant.

Section 13: ‘Criminal misconduct by a public servant’

Offence: A public servant who, by corrupt or illegal means, obtains any
pecuniary advantage for himself or any other person or possesses assets
disproportionate to his known sources of income. Section 13 states that “A
public servant is said to commit the offence of criminal misconduct, (a) if he
dishonestly or fraudulently misappropriates or otherwise converts for his own
use any property entrusted to him or any property under his control as a
public servant or allows any other person so to do; or (b) if he intentionally
enriches himself illicitly during the period of his office.”

Penalty: Imprisonment for a term not less than four years, which may extend
to ten years, and a fine.

Apart from this, Section 12 of the Prevention of Corruption Act, 1988, states
that “Whoever abets any offence punishable under this Act, whether or not
that offence is committed in consequence of that abetment, shall be
punishable with imprisonment for a term which shall not be less than three
years, but which may extend to seven years and shall also be liable to fine.”
Also, in Section 14 of the Prevention of Corruption Act, 1988, habitual
offenders are punished with imprisonment for a term not less than 5 years,
which may extend to 10 years, and are liable to fine.

Investigation into the offences (Sec 17-18)

Persons authorized to investigate
An investigation of the offence is critical in the criminal justice system.
Generally, the police conduct the investigation. It is their primary obligation
to gather evidence and try to identify the true perpetrators of the crime. The
police have been granted extensive powers for this reason. However, the
police can abuse their broad powers at times. Because this is a question of
administration and governance by public workers, these powers should be
thoroughly reviewed. Not all police officers are permitted to conduct
investigations for this reason. Only police personnel of a certain rank are
permitted to investigate the matter.

Section 17 of the Act addresses those who are authorised to conduct

investigations under the Act. The following individuals have been authorised:

1. In the case of the Delhi Special Police Establishment: An officer with the
rank of Inspector of Police or higher (CBI).
2. In metropolitan locations such as Bombay, Madras, and Calcutta: An
official with the rank of Assistant Commissioner of Police or above.
3. Elsewhere: An officer with the rank of Deputy Superintendent of Police
or higher is authorised.

No approved official may conduct investigations or make arrests until an

order from the Metropolitan Magistrate or Magistrate of First Class is
obtained. Furthermore, as previously indicated, he may arrest the accused
without a warrant from such Metropolitan Magistrate or a Magistrate of First
Class. In this approach, we can see that under the Prevention of Corruption
Act of 1988, not all police officers are permitted to investigate accusations of
corruption. Only the designated police personnel are authorised to conduct
investigations into the offences.
Thus, an effective arrangement has been created in context, and a good
balance has been struck between the two sides, namely, the accused and the
prosecution, to ensure that no public worker is harassed unduly by the police.
It is an effective structure for controlling the evil of corruption and
establishing the rule of law in order to achieve the lofty goal of natural
justice.

Restriction on the investigation in certain cases

Section 17A of the Amendment Act 2018 stipulates that no one may
investigate an alleged offence if it involves a recommendation/decision made
by a public worker in the course of his official responsibilities. If such an
inquiry is to be performed, the following approvals are required:

1. Approval of the Central Government is required for offences involving

Union matters.
2. For offences involving the conduct of state affairs, state government
approval is required.

However, if an arrest is conducted on the scene and the offender admits to

committing an offence, no such clearance is necessary.

The authority to examine bankers’ books

Section 18 of the Act stipulates that if the investigation officer believes that
the bankers’ records need to be examined for the purpose of inquiry, the
officer may examine them. This power of inspection extends beyond the
offender’s bank accounts and includes the authority to search the bank
accounts of anybody whom the officer suspects of holding money on behalf
of the criminal.

Process followed to investigate and prosecute corrupt public

servants
1. The three main authorities involved in inquiring, investigating and
prosecuting corruption cases are the Central Vigilance Commission (CVC), the
Central Bureau of Investigation (CBI) and the state Anti-Corruption Bureau
(ACB). Cases related to money laundering by public servants are
investigated and prosecuted by the Directorate of Enforcement and the
Financial Intelligence Unit, which are under the Ministry of Finance.

2. The CBI and state ACBs investigate cases related to corruption under the
Prevention of Corruption Act, 1988 and the Indian Penal Code, 1860. The
CBI’s jurisdiction is the central government and Union Territories while the
state ACBs investigates cases within the states. States can refer cases to the
CBI.

3. The CVC is a statutory body that supervises corruption cases in

government departments. The CBI is under its supervision. The CVC can
refer cases either to the Central Vigilance Officer (CVO) in each department
or to the CBI. The CVC or the CVO recommends the action to be taken
against a public servant but the decision to take any disciplinary action
against a civil servant rests on the department authority.
4. Prosecution can be initiated by an investigating agency only after it has
the prior sanction of the central or state government. Government
appointed prosecutors undertake the prosecution proceeding in the
courts.

5. All cases under the Prevention of Corruption Act, 1988 are tried by
Special Judges who are appointed by the central or state government.

In Vinod Kumar Garg v. State (Government of National Capital

Territory of Delhi), (2020) 2 SCC 88, Apex Court has held that if an
investigation was not conducted by a police officer of the requisite rank and
status required Under Section 17 of the Act, such lapse would be an
irregularity, however unless such irregularity results in causing prejudice,
conviction will not be vitiated or be bad in law. Therefore, the lack of sanction
was found not to be a ground for quashing of the proceedings.

Sanction and Prosecution (Sec 19-26)

The procedure used to investigate and prosecute

corrupt public officials
1. The Central Vigilance Commission (CVC), the Central Bureau of
Investigation (CBI), and the state Anti-Corruption Bureau are the three
primary bodies involved in enquiring, investigating, and prosecuting
corruption matters. The Directorate of Enforcement and the Financial
Intelligence Unit, both of which fall under the Ministry of Finance, look
into and prosecute cases involving money laundering by public
employees.
2. Under the Prevention of Corruption Act of 1988 and the Indian Penal
Code of 1860, the CBI and state ACBs investigate charges of
corruption. The CBI investigates cases inside the federal government
and Union Territories, whilst state ACBs investigate crimes within the
states. Cases can be referred to the CBI by states.
3. The CVC is a statutory agency that oversees corruption investigations
in government agencies. It is in charge of the CBI. The CVC has the
authority to recommend matters to the Central Vigilance Officer (CVO)
in each department or to the CBI. The CVC or CVO advises disciplinary
action against a public worker, but the decision to take such action
against a civil servant remains with the department authorities.
4. An investigative agency may commence a prosecution only with the
prior approval of the national or state government. Prosecutors chosen
by the government handle the prosecution process in the courts.
5. Under the Prevention of Corruption Act of 1988, all matters are heard
by Special Judges chosen by the national or state governments.

The function of the bribe provider and the

presumption of taint
According to Section 20 of the POCA, there is a presumption that any
expensive item or pleasure discovered in the hands of a person under
investigation was obtained for the reasons described in Section 7 of the Act.
This is a rebuttable presumption, and the individual under investigation
would have the burden of proving that the valued item or gratification was
not obtained in connection with the Act’s violation. Accordingly, a person
under investigation would be found guilty if no evidence was presented to
refute the assumption, as was decided in the case of M. Narsinga Rao vs
State of Andhra Pradesh (2001).

Section 24 of the POCA grants immunity to the bribe giver and states that the
bribe giver’s confession will not expose him to prosecution. The immunity
granted to bribe providers under this rule has been seen as a fundamental
weakness as well as contradictory with international norms.

Amendments to the Act

The Prevention of Corruption Act of 1988 was recently updated because no
further improvements were made to the Act, resulting in its limited success.
With this Act’s limited success, a new Act was required. As a result, The
Prevention of Corruption Act, 2018 went into effect (the “Amendment Act”).
The majority of the revisions are targeted at tightening up the Act’s current
provisions and broadening the scope of the offences.

The significant changes to the Act are as follows:

1. The word “Prescribed” has been adopted to refer to rules that the
Central Government may create under the Act. As a result, we predict
the following rules: Rules requiring organisations and businesses to
develop internal policies and procedures to prevent their personnel
from giving undue benefit to public officials and rules governing the
prosecution of a public servant under the Act.
2. “Undue advantage” after this amendment is defined as any reward
other than legal payment. Similarly, the term “gratification” has been
defined to embrace all types of monetary gratification other than
economic gratification.
3. The phrase “Legal remuneration” under this amended Act has been
defined to cover all pay that a public worker is authorised by the
relevant body to receive.
4. Under Section 4(4), the courts no longer have to finish trials for Act-
related offences within two years, failing which the judges must record
the necessity for a time extension. A trial can now be prolonged for six
months at a time up to a maximum of four years.
5. The amended Section 8 lays out the consequences for anybody who
aids in the payment of a bribe or attempts to engage in corruption
alongside a public official. The Amendment Act exempts actions taken
under duress as long as the person who was forced to take them files a
complaint with the police or an investigative agency within seven days
after paying a bribe.
6. For business organisations, Section 9 now clearly addresses business
organisations and the people connected to them. The phrase “persons
affiliated with the commercial organisation” is broad enough to cover
workers and suppliers, while the word “commercial organisation” is
defined to include all types of corporate organisations.
7. For the penalty section under this Act, provides that where the
commercial organisation’s directors, officers in default, or a person with
power over the organisation has consented to the corrupt act breaking
the Act’s requirements, Section 10 now sets specific periods for
imprisonment and a fine.
8. When Sections 10 and 9 are amended together, it may be helpful to
keep in mind that the amended Act appears to punish both commercial
organisations for violating the Act by levying a fine and the officers in
charge of such commercial organisations under Section 10 by
subjecting them to criminal liability.
9. For provisions related to public servant corruption, it appears that the
Amendment Act has reduced the circumstances in which a public
employee may be charged with suspected criminal misbehaviour. Only
the misappropriation of property and unjust enrichment are included as
reasons for misconduct in the modified Section 13 of the Act, which is
assessed by disproportionate assets. In the past, Section 13 included
broad propensities to engage in corrupt behaviour or seek bribes as
grounds for criminal wrongdoing.
10. The Amendment Act seems to make it more challenging to bring
charges against government personnel. According to the change made
under Section 19, to prosecute a public employee under Sections 7, 11,
13, and 15 of the Act, a sanction must first be acquired from a body
that has the power to fire them. Second, an authorization request must
be made by the investigating authority such as a police officer or else
other complaints must be satisfied before the court may declare an
offence to have occurred.
11. Neeraj Dutta v. State (Govt. of NCT of Delhi) (2022)
12. Is circumstantial evidence sufficient to convict public
officials in bribery cases?
13. CASE DESCRIPTION
14.
15. On April 17th, 2000, Ms. Neeraj Dutta, a Lower Divisional Clerk at
the Delhi Vidyut Board demanded a bribe of ₹10,000 from Mr. Rajvit
Singh Sethi for the installation of an electricity metre at his shop. She
agreed to receive the amount the same day at Mr. Sethi’s shop
between 03.00 PM and 04.00 PM. Mr. Sethi registered an FIR against
Ms. Dutta that morning and got the police to undertake a sting
operation to catch Ms. Dutta in the act.
16. After successfully executing the sting operation and finding that
Ms. Dutta had in fact received the bribe, the police filed a charge
sheet. Ms. Dutta was charged under Sections 7 and 13 of
the Prevention of Corruption Act, 1988 (PCA) which punishes public
officials for taking bribes or ‘illegal gratification’, and for misconduct.
Further, it prescribes a punishment of three to seven years
imprisonment and a fine.
17. Mr. Sethi, who made the complaint against Ms. Dutta, passed
away before the trial began. As a result, the case no longer had a
primary witness. Primary witnesses are crucial in proving the facts of a
case as they provide oral evidence of the events, which is considered
direct evidence under the Indian Evidence Act, 1872.
18. In the past, the SC has held that in case the person to whom the
demand was made is either dead or unavailable for providing direct
evidence, the accused is acquitted. However, in this case, the Trial
Court relied on evidence based on other circumstances surrounding the
event such as the police statements to convict Ms. Dutta.
19. Ms. Dutta appealed the Trial Court’s decision at the Delhi High
Court. She stated that circumstantial evidence was not enough to
convict her under the PCA. The Delhi HC however, upheld the decision
of the Trial Court to convict her on April 2nd, 2009. A few days later, on
April 15th, 2009, Ms. Dutt, appealed this decision at the Supreme
Court.
20. At the SC, a 2-Judge Bench comprising Justices R.
Banumathi and Subhash Reddy heard her appeal. They examined
previous judgments relying on circumstantial evidence when the
primary evidence of the complainant is unavailable. In P.
Satyanarayana Murthy v District Inspector of Police, State of Andhra
Pradesh, (2015) the court held that relying on circumstantial evidence,
was not permissible under the law. The Bench viewed that this
conflicted with the SC’s previous judgements in B. Jayaraj v State of
Andhra Pradesh (2014) and M. Narsinga Rao v State of A.P. (2001).
21. The Bench concluded that there was a conflict in these decisions
on the nature and quality of proof necessary to convict a person under
the PCA when the primary evidence of the complainant is unavailable.
Seeing that a significant question of law was raised in the case, the
Bench referred it to a 5-Judge Constitution Bench.
22. The Constitution Bench comprising Justices Abdul Nazeer, B. R.
Gavai, A. S. Bopanna, V. Ramasubramanian and B. V.
Nagarathna heard the matter. The primary question before them was
whether a public official could be held guilty for the crime of
demanding a bribe or an illegal gratification under Sections 7 and 13 of
the PCA based on circumstantial evidence. The Bench also had to
decide whether the three decisions of the SC in P.Satyanarayana
Murthy (2015), B. Jayaraj (2014) and M. Narsinga Rao (2001) were in
conflict with each other.
23. The Bench unanimously held that a person could be convicted
based on circumstantial evidence for the crime of demanding a bribe or
illegal gratification under the PCA, 1988. In the Judgment delivered by
Justice Nagarathna, the Bench also clarified that the three judgments
were not in conflict with each other.
24. On the question of conflict in the judgments of P. Satyanarayana
Murthy, B. Jayaraj and M. Narsinga Rao, the Bench held that the facts
in each case were slightly different from each other which resulted in
differing decisions.
25. Justice Nagarathna wrote that Courts have the discretion to
make ‘presumptions’ of facts based on the evidence available when
considering a demand for a bribe, as long as this presumption is not
 directly rebutted. Additionally, the Bench also stated that the death of
a complainant does not directly result in an acquittal of the accused.
26. This Judgment has significantly reduced the high degree of proof
that was previously required to convict an official for seeking illegal
gratification.