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In the wake of numerous scams being unearthed in India over the past decade, the enforcement agencies have been proactive in terms of monitoring compliance under relevant anti-corruption and bribery laws and taking action against violations thereof. Further, in 2017 the Ministry of Corporate Affairs voluntarily struck off 224,000 shell companies and imposed restrictions on the usage of their bank accounts and transference of company property. Action was taken to disqualify directors who failed to comply with specific requirements under the Companies Act 2013. The ministry also announced that if any director or other authorised signatory of a struck-off company tried to siphon off money from the company’s bank account, he or she will be punished with a prison term of between six months
AuthorNayna Maheshwari
Published on04/10/2018
Last Updates04/10/2018
and 10 years, and where the fraud involved public interest, the minimum prison term will be at least three years and may also involve a fine of up to three times the amount involved. The prime minister's office has also created a special task force to oversee the drive against such defaulting companies with the help of various enforcement agencies. Moreover, the Supreme Court has expanded the ambit of the definition of ‘public servant’ (under the Prevention of Corruption Act 1988) to include all officials of private banks, as their duties are public in nature (Central Bureau of Investigation, Bank Securities and Fraud Cell v Ramesh Gelli, February 23 2016).Over the past couple of years, Parliament has passed many acts and bills to prevent such crimes which include the Lokpal and Lokayukta (Amendment) Act 2016,the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act 2015, the Benami Transactions (Prohibition) Amendment Act 2016,the Companies (Amendment) Act 2017, the Whistleblowers’ Protection (Amendment) Bill 2015 and the Prevention of Corruption (Amendment) Bill 2013, which is pending parliamentary approval, seeks to amend the Prevention of Corruption Act 1988. The key laws pertaining to corruption and bribery in India are the Prevention of Corruption Act 1988 is the principal anti-corruption law. It penalises offences committed by public servants in relation to the acceptance or attempted acceptance of any form of illegal gratification (ie, anything of value other than a legal entitlement). A bribe giver may also be prosecuted if it is proven that he or she was involved in the abetment of the offence committed by the public servant.The Penal Code 1860 is the penal law of India and sets out provisions which are interpreted to cover bribery and fraud matters, including those committed in the private sector. Its provisions include offences relating to cheating and dishonestly inducing delivery of property and criminal breach of trust, and the Companies Act,2013.The anti-corruption laws prescribe various penalties. For instance, the Prevention of Corruption Act 1988 sets out that public servants found guilty of the prescribed offences or any person found to have abetted in the commission of such offences will be subject to a prison term of between three and seven yearsand a fine to be set by the court.Similarly, the commission of fraud under the Companies Act 2013 involving an amount exceeding Rs1 million or 1% of the company turnover or which involves public interest, is subject to a prison term between six months and 10 years and a fine of up to three times the amount involved in the offence.Money laundering, as defined in the Prevention of Money Laundering Act 2002, is subject to a prison term of between three and 10 years and a fine or up to Rs500,000.Commission of relevant offences under the Penal Code is punishable with three to seven years’ imprisonment.Other penalties include confiscation or attachment of the accused’s property, or debarment or blacklisting from dealing with government authorities. Hence, We need role models, campaigns, debates, and many different approaches to educate our people, to inspire our young generations, to change the mindset of corrupt people and to tackle with every cause. Moreover it need willingness, commitment and active participation of media, civic associations, voluntary groups, teachers, students, social workers, etc. In addition to the ongoing initiatives such as Citizens’ Charters, RTI Act, social audit, e-governance, lokayukta, etc., which needs some improvement and harmonized approach across all states? The central government is considering the introduction of a new “Lok Pal Bill” to put in place a mechanism to tackle corruption. Currently, public servants (such as government employees, judges, armed forces, police) can be prosecuted for corruption under the Indian Penal Code, 1860 and the Prevention of Corruption Act, 1988. However, the Code of Criminal Procedure and the Act require the investigating agency (such as CBI) to get prior sanction of the central or state government before it can initiate the prosecution process in a court. The ‘Lok Pal Bill’ was introduced for the first time in 1968 but it lapsed with the dissolution of the Lok Sabha. It was introduced seven more times in Parliament, the last time in 2001. However, the Bill lapsed each time except in 1985 when it was withdrawn. At the state level, so far 18 states have created the institution of the Lokayukta through the Lokayukta Acts but loopholes in the “Lokayukta’ Act and the threat of strong punishment for “frivolous” complaints have discouraged people from stepping forward to report corruption and made these institutions helpless.


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