India has a Prevention of Corruption Act, 1988, that deals with cases of bribery and corruption. However, this Act has provisions mainly related to bribery and corruption by public servants. Of course, if a private person bribes a public servant, it may also amount to an offence under Section 12 of the Prevention of Corruption Act. Likewise, if a private person accepts bribe for inducing a public servant by corrupt or illegal means or by personal influence, to show some favour etc. in the performance of his duties, such private person may again be committing an offence under Section 8 or 9 of the said Act, respectively. Likewise, a private person who abets a public servant or who is in criminal conspiracy with a public servant, for the commission of an offence under the Prevention of Corruption Act may also be liable himself under the said Act. However, corruption or bribery within the private sector is not made offence under the said Act. Likewise, an act of bribing foreign public servants is also not covered as an offence under the said Prevention of Corruption Act. Now, it is reported that the Government of India is considering to introduce a Bill to make acts of bribing foreign public officers and officers of public international organizations as offences; and, the Government is also considering making amendments in the Indian Penal Code (IPC) to make bribery and corruption within the private sector as offence.
It is noteworthy that India is a signatory to the United Nations Convention against Corruption (UNCAC) (see here). As a State Party to the said Convention, India has certain obligations under the said Convention. For example, Article 16 of the said UNCAC requires every State Party to enact laws to make it an offence an act of bribery of foreign public officials and officials of public international organizations; this Article reads as under:
“Article 16. Bribery of foreign public officials and officials of public international organizations
1. Each State Party shall adopt such legislative and other measures as may be necessary to establish as a criminal offence, when committed intentionally, the promise, offering or giving to a foreign public official or an official of a public international organization, directly or indirectly, of an undue advantage, for the official himself or herself or another person or entity, in order that the official act or refrain from acting in the exercise of his or her official duties, in order to obtain or retain business or other undue advantage in relation to the conduct of international business.
2. Each State Party shall consider adopting such legislative and other measures as may be necessary to establish as a criminal offence, when committed intentionally, the solicitation or acceptance by a foreign public official or an official of a public international organization, directly or indirectly, of an undue advantage, for the official himself or herself or another person or entity, in order that the official act or refrain from acting in the exercise of his or her official duties.”
However, as of today, India does not have any law that makes such acts of bribing foreign public officials and officials of public international organizations as offences. To meet its obligations under the above Article 16, the Government of India had earlier introduced a Bill in Parliament, viz., the “Prevention of Bribery of Foreign Public Officials and Officials of Public International Organizations Bill, 2011” (see a copy of this Bill, here). However, before the said Bill could be passed by the Parliament, it lapsed with the dissolution of the 15th Lok Sabha. Now, the 16th Lok Sabha has been constituted after the 2014 general elections and it has been reported that a proposal for introduction of a new Bill for criminalization of foreign bribery is being considered by the Government.
Likewise, Article 12 of the said United Nations Convention against Corruption required every State Party to make acts bribery in private sector as offences; this Article is reproduced below:
“Article 12. Private sector
1. Each State Party shall take measures, in accordance with the fundamental principles of its domestic law, to prevent corruption involving the private sector, enhance accounting and auditing standards in the private sector and, where appropriate, provide effective, proportionate and dissuasive civil, administrative or criminal penalties for failure to comply with such measures.
2. Measures to achieve these ends may include, inter alia:
(a) Promoting cooperation between law enforcement agencies and relevant private entities;
(b) Promoting the development of standards and procedures designed to safeguard the integrity of relevant private entities, including codes of conduct for the correct, honourable and proper performance of the activities of business and all relevant professions and the prevention of conflicts of interest, and for the promotion of the use of good commercial practices among businesses and in the contractual relations of businesses with the State;
(c) Promoting transparency among private entities, including, where appropriate, measures regarding the identity of legal and natural persons involved in the establishment and management of corporate entities;
(d) Preventing the misuse of procedures regulating private entities, including procedures regarding subsidies and licences granted by public authorities for commercial activities;
(e) Preventing conflicts of interest by imposing restrictions, as appropriate and for a reasonable period of time, on the professional activities of former public officials or on the employment of public officials by the private sector after their resignation or retirement, where such activities or employment relate directly to the functions held or supervised by those public officials during their tenure;
(f) Ensuring that private enterprises, taking into account their structure and size, have sufficient internal auditing controls to assist in preventing and detecting acts of corruption and that the accounts and required financial statements of such private enterprises are subject to appropriate auditing and certification procedures.
3. In order to prevent corruption, each State Party shall take such measures as may be necessary, in accordance with its domestic laws and regulations regarding the maintenance of books and records, financial statement disclosures and accounting and auditing standards, to prohibit the following acts carried out for the purpose of committing any of the offences established in accordance with this Convention:
(a) The establishment of off-the-books accounts;
(b) The making of off-the-books or inadequately identified transactions;
(c) The recording of non-existent expenditure;
(d) The entry of liabilities with incorrect identification of their objects;
(e) The use of false documents; and
(f) The intentional destruction of bookkeeping documents earlier than foreseen by the law.
4. Each State Party shall disallow the tax deductibility of expenses that constitute bribes, the latter being one of the constituent elements of the offences established in accordance with articles 15 and 16 of this Convention and, where appropriate, other expenses incurred in furtherance of corrupt conduct.”
It has been reported that the Ministry of Home Affairs in the Government of India is considering a proposal for amendments in Indian Penal Code for criminalizing acts of bribery in the private sector to meet its obligations under the above Article 12 of UNCAC. A draft amendment Bill has reportedly been circulated among States for their views in this regard.
It goes without saying that the Government of India is very slow in fulfilling its obligations under the aforesaid United Nations Convention against Corruption. Same lethargy is shown in other important laws relating to corruption and bribery, such as the Lokpal and Lokayuktas Act, 2013, which is yet to be implemented long after it was passed by Parliament and was assented to by the President.
