Anti–Corruption Laws in India

INTRODUCTION

The universal truth is that corruption is a hindrance to upset the system if it is present in any organization. Corruption takes place when a certain party fails to rise to the occasion on a merit basis. Thus, corruption is bad for the swift functioning of any economic system. It distorts the incentive system as people are discouraged in the name of merit as a means to success.

The laws and acts of India were reviewed from various government sites of India and further case studies from secondary data-based empirical studies have been also been utilized. Besides, the chapter also looked at the effectiveness of these laws from the lens of a socio-legal approach. Assessing the legal effectiveness itself is challenging as it looks at the impact of the law on areas of human life outside the immediate legal sphere. However, such verification has to do before introducing a new one. In fact, its usefulness also needs to be assessed.

Types of Laws

• Indian Penal Code, 1860

• The Prevention of Corruption Act, 1988

• The Benami Transactions (Prohibition) Act, 1988

• The Prevention of Money Laundering Act, 2002

Indian Penal Code, 1860:

• In IPC “public servant” define as a government employee, military officers, air force or navy; police, judges, officers of Court of Justice, and any local authority established by a central or state act.

• Section 169 of IPC pertains to a public servant unlawfully buying or bidding for the property. The public servant shall be punished with imprisonment of up to 2 years or with fine or both. If the property is purchased, it shall be confiscated.

• Section 409 of IPC pertains to a criminal breach of trust by a public servant. The public servant shall be punished with life imprisonment or with imprisonment of up to 10 years and a fine.

The Prevention of Corruption Act, 1988

• In the IPC in addition to the categories included, the definition of “public servant” includes Public Service Commission, banks, employees of universities, and office bearers of cooperative societies receiving financial aid from the government.

• If gratification had been taken by a public servant other than his legal remuneration in respect of an official act or to influence public servants is liable to a minimum punishment of 6 months and maximum punishment of 5 years and fine. This Act also penalizes a public servant for taking gratification to influence the public by any illegal means and for exercising his personal influence with a public servant.

• If a valuable thing accepts by a public servant, without paying for it or paying inadequately from a person with whom he is involved in a business transaction in his official capacity, then he shall be penalized with a minimum punishment of 6 months and maximum punishment of 5 years and fine.

• To prosecute a public servant it’s necessary to obtain prior sanction from the central or state government.

The Benami Transactions (Prohibition) Act, 1988

This act was formed to restrict Benami transactions and the right to restore the Benami properties.

A Benami property is one where the property is transferred to another person or property owned by a particular person is paid by another person (nameless property). During these transactions, the person who makes the payment for the property is considered to be the owner of the particular property either directly or indirectly. It is considered to be an illegal activity based on the Benami Transaction (Prohibition) Amendment Bill, 2015. It provides:

b) Repayment of money cannot be made for the acquisition of Benami property

d) the security deposit owned by a registered authority owner under the act of provisions of the depositary in 1996, the agent would not be considered as a Benami.

The Prevention of Money Laundering Act, 2002

The Prevention of Money Laundering Act (PMLA) 2002 is another legal control to prevent money laundering through corruption. Under this Act, the institutions in the target are banks, financial institutions, and intermediaries. An amendment was also brought that led to the inclusion of non-profit organizations which will remain under the scanner of PMLA.

A recent instance where this act was violated involves an action initiated by the Enforcement Directorate to attach properties of DMK-controlled Kalaignar TV under the PMLA for recovering a staggering amount of Rs. 215 crore in connection with the 2G scam.

As per this Act, an offense of money laundering involves a person is involved in criminal proceeds and presents as untainted property. Proceeds of crime here indicate any property obtained by a person using criminal activity and that comes under the purview of this act. A person could be prosecuted for the offense of money laundering, provided he or she has been charged with committing a scheduled offense.

Here the punishment for the offense of money laundering is rigorous imprisonment which could last from a minimum of three years to a maximum of seven years including a fine up to Rs 5 lakh. If a person is found indulged f in an offence under the Narcotics Drugs and Psychotropic Substances Act, 1985, then the imprisonment term could extend up to 10 years. The Adjudicating Authority decides that whether any of the seized property involves money laundering. An Appellate Tribunal will hear appeals against the orders of the Adjudicating Authority including other authorities under this Act. All the institutes related to the finance and banking industry maintains entire transactions and assesses records of all customers and facilitates information to the requisite authorities.