How effective are our laws to combat corruption?

THE SANTHANAM Committee Report 1964 defines corruption as a complex problem having roots and ramifications in society as a whole. In its widest connotation, corruption includes improper or selfish exercise of power and influence attached to a public office.

During the last one decade, several cases of corruption have come to public notice due to the vigilant press, efforts of public spirited persons and a proactive judiciary. The Bofors gun, Airbus deal, ABB loco deal, Jain hawala racket, sugar scam, telecom scam, securities scam, urea scam and fodder scam in Bihar are a few instances. The scams which surfaced are only the tip of the iceberg. A majority of the scams relate to ``public expenditure'' by the Central and State Governments. The basic criteria in detecting corruption in public expenditure is the prevalent market value of the item of purchase, though such a yardstick presents certain difficulties in detecting corruption in defence purchases. The cases of corruption in the collection of ``public revenues'' and arrears thereof are not detected on a significant scale. It is not anybody's case that there is no corruption in the realisation of ``public revenues,'' the direct and indirect taxes.

Income tax arrears in 1993 stood at Rs. 6,000 crores. This is in respect of assessed tax. Under-assessed tax accounts for some thousands of crores of tax losses. So is the case in relation to indirect taxes - central excise duties. Another angle of revenue loss relates to non-recovery of bank loans from the industrialists accounting for nearly Rs. 50,000 crores. Defaulting on bank loans should be made a penal offence with additional provision of attachment of properties. Yet another angle is corruption and money laundering in the banking sector. The securities scam alone involved a loss of Rs. 1,28,534 crores according to the JPC which probed the matter.

The sources to unearth corruption in ``public revenue'' losses are the various audit reports, the remarks of the Public Accounts Committee of Parliament and also the reports of the Director General, Vigilance and Enforcement. The Bofors, the Kao oil scam, the case of Justice Ramaswamy of the Supreme Court originated from audit reports. Provisions of section 13(1) (d) of the Prevention of Corruption Act 1988 are applicable in cases of deliberate loss in ``public revenues'' as much as it is in the case of similar loss in ``public expenditure.'' The anti- corruption agencies should probe this angle of abuse of office.

Impact on economy

Corruption in public life and administration is fatal to economic growth. Corruption also erodes the authority of the state, promotes crime and violence, undermines the rule of law and the very foundations of a democratic polity. Unchecked corruption in medical and health services, in the agencies in charge of controlling pollution and implementation of the Drugs and Cosmetics Act, 1940, will endanger the public health and safety. Since poor public revenues result in inadequate defence outlay, national defence will be jeopardised.

The issue of corruption in India merits consideration as a national issue at least on a par with secularism, stability, reservation in services, political empowerment of women, etc. Not a single leader, since the late Jaya Prakash Narayan championed the fight against corruption as a national and priority issue. Wrong priorities focusing non-issues, sometimes divisive, on the national agenda lead to negative consequences.

Sections 161 to 165 of the Indian Penal Code dealing with corruption are the first step in the evolution of law on the subject. S. 161 deals with public servants taking gratification other than legal remuneration in respect of an official act. S.165 deals with public servants obtaining a valuable thing without consideration in respect of an official act. S. 162 and 163 deal with corruption by private persons influencing the public servant. S. 21 IPC defines the category of public servants. The words `gratification' occurring in S. 161 and `valuable thing' occurring in S. 165 have a broader meaning than mere acceptances of money. They include a) pecuniary gratification; b) gratification which is not pecuniary but estimable in money including train or air tickets; c) all forms of entertainment; and d) all forms of employment for reward. Till 1946, these offences were non-cognizable and were investigated by the local police after obtaining the permission of a magistrate. In 1946 the Delhi Special Police Establishment Act was passed pursuant to which a specialised agency, the Delhi Special Police Establishment (now called CBI), was created to investigate corruption cases. In 1947, a special enactment, the PC Act 1947 was passed.

According to the preamble of the Act, the law is intended to eradicate corruption in public life and administration more effectively. According to S. 5(3) of the Act, the hitherto non- cognizable offences were made cognizable. S 4(1) of the Act enacted a new rule of presumptive evidence (rebuttal presumption) against the accused contrary to the well-known principles of criminal jurisprudence. The Act also created a new offence of `criminal misconduct' in S.5(1) whose scope and ambit is wider than S. 161 & 165 IPC, though to some extent it overlaps on the pre-existing provisions. A public servant who by abusing his office causes wrongful loss to the government and benefits third party without himself receiving pecuniary gain is liable u/s 5(1) (d) (M. Narayana vs. State of Kerala AIR 1963 S.C. 116 (V. 50, C. 168). `Criminal misconduct' by public servant need not be in connection with the discharge of his own duty. A senior or any public servant who by taking money influences ``selection committee,'' to select a particular candidate to a post cannot claim that it was not part of his duty to select candidates and escape the legal consequences (Dhaneswar vs. Delhi Administraton AIR 1962 S.C.P. 195).

After the country gained independence, the Bakshi Tekchand Committee, which was appointed in 1949 on the subject, suggested certain amendments to procedural law. The Criminal Law Amendment Act, 1952 was passed. This is progressive legislation. It conferred power on the State Government to appoint special judges to try the cases speedily. S. 6(1) conferred power on the special judge to take cognizance of the offence on a private complaint or upon a police report or upon his coming to know in some manner of the offence having been committed. In the same year, the Commission of Enquiry Act 1952 was passed. Several Commissions of Enquiry headed by SC judges were appointed since then to inquire into the charges of corruption against certain CMs and Union Ministers. The findings of the commissions led to the public men quitting their office. In 1956 the Vivian Bose Commission's recommendations led to the Criminal (Law Amendment) Act 1958. This enlarged the list of ``public servants.'' And in 1962, when Lal Bahadur Sastri was H.M., the Santhanam Committee was appointed. Pursuant to the Santhanam Committee's recommendations, a new offence of ``possession of disproportionate assets to one's known sources of income'' was incorporated as S. 5(1) (e) in the PC Act 1947. The office of ``Minister'' was suggested for inclusion in the list of public servants by amendment to S.21 IPC. But even before that, the necessary amendment to include Minister in the definition of public servant was made by the government in pursuance of the S.C. judgment in Siv Bahadur Singh case in which it held that a `Minister' is a public servant within the existing framework of law under the sub-clause 12 of S.21 of the IPC. MPs, MLAs were left out. The CVC was also set up in the year 1964. In 1985 another Committee went into the working of the PC Act 1947 and its recommendation led to the PC Act 1988. The list of `public servants' was further enlarged by including MPs and MLAs among others. Presumption u/s. 7, 11, 131(A) and (B) was raised. S.161 to 165 IPC were deleted from IPC 1860. The Criminal Law Amendment Act 1952 was repealed and its provision incorporated in the new Act.

Lok Pal and Lok Ayukta

In pursuance of the recommendaitons of the ARC 1966, headed by Morarji Desai, it was proposed to set up the institution of Lok Pal and Lok Ayukta to fight corruption in administration and public life. As many as five Bills (Bills of 1971, 1977, 1985, 1989, 1991) were introduced. There is no success in passing the Lok Pal Bills even after 30 years of the ARC recommendations. There was no agreement on (a) the inclusion of the office of PM in the definition of ``public servant,'' (b) the definition of ``criminal misconduct,'' and c) the constitutional status of the institution. Meanwhile from 1970 to 1985 as many as 10 States passed the Lok Ayukta laws. Other States do not have Lok Ayukta. There is no uniformity in the law where it exists. Some States like Karnataka and Orissa included CM in the definition of `public servants.' Others excluded it. None of the laws except the Lok Ayukta of Karnataka has power to prosecute the guilty. Its recommendations are not mandatory. In some States, for example in M.P., three ministers who were held guilty of ``abuse of office'' were not even sacked from the Cabinet not to speak of disqualification from holding public office (M.P. Lok Ayukta's 13th annual report 1994-95). The Lok Ayukta laws except that of Karnataka are considered toothless as corruption is not defined a criminal offence, punishable by courts. Finally there is no permanency as Lok Ayukta can be repealed by the State Government concerned if it becomes inconvenient (Recent action of the CM of Harayana to abolish Lok Ayukta).

Public interest litigation

Any citizen can file a writ petition in public interest in the High Court alleging commission of the offence of corruption by political bigwigs. The provisions of the Civil Procedure Code are applicable. The court can summon records, examine and determine after hearing the arguments for and against, whether prima facie a case is made out. The accused can defend himself by filing an affidavit. The court has power to hold the accused guilty of the charges. This does not amount to trial and punishment under the criminal law. The findings are not enforceable. Quitting public office, if the person happens to hold such office at the time of judgment, is left to the standards of public morality of the office-holder. In the Sixties and the Seventies such adverse court findings led to the political bigwigs resigning their posts. One of the former CMs of Andhra Pradesh in 1989-90 refused to quit office, holding that he is answerable only to the people's court. Thus the writ jurisdiction of the High Court in PIL cannot make politicians accountable for their act of corruption. However, these adverse findings of High Courts in PIL as well as the findings of Lok Ayukta arrived after due investigation serve one purpose. They are grounds to approach the court of special judge trying A.C. cases requesting the said court to take cognizance of the offence and commence criminal trial. But the path is not an easy one. It requires enormous guts, energy and money for an ordinary citizen, however public- spirited one may be, to take on the political bigwigs. Fighting corruption, which essentially is a job of the state, cannot be left to be handled by the public-spirited persons.

Administration of law

(a) There are several constraints in the administration of the PC Act 1988. The first constraint is that the heads of the CBI/ACB are appointed by the PM or CM as the case may be. There is no functional autonomy. There is no financial autonomy too. The organisations are understaffed. There is limited talent in the investigating team. A major portion of officers are drawn on deputation from the civil police of the State concerned. It cannot cover even 10 per cent of the prevalent corruption.

(b) There are serious limitations in proceeding against the big fish in administration and public life. No head of CBI or ACB can proceed against the PM or a CM except under court orders. The CBI cannot proceed to ``enquire'' against the CM of a State or a member of his Cabinet , even if the PM wishes to do. U/s 6 of the Delhi Special Police Establishment Act 1946, prior consent of the State concerned is necessary if the CBI wants to step in their jurisdiction. Without the consent, there will be no enquiry. However, a commission of enquiry can be appointed by the PM on any matter of public importance including corruption charges against a CM or a Minister under the Commission of Enquiry Act 1952. The findings of such a commission lead to the dismissal of State Governments but not prosecutions and conviction by a court of law. Since the appointment of such commissions of enquiry and the dismissal of State Governments are selective, they did not help in arresting corruption at higher levels.

(c) The senior officers have protective armour. Both at the Centre and in the States, executive instructions exist requiring the CBI and ACB to take prior permission of the Government if they want to enquire against certain level of senior officials. So much so, no serious enquiry is possible against this creamy layer of bureaucracy. This strikes at the root of the matter. The preamble of the PC Act 1988 as well as its predecessor, the PC Act 1947, states that the legislation is meant to eradicate corruption more effectively. But the executive instructions defeat that purpose. At any rate it is good to know the reasons behind these rules. It is anything but honest. It leads to a straight conclusion that the heads of the governments will protect senior officers from enquiries by the CBI/ACB and they will in turn cover up the dishonest motives/acts of the political executive while building the files in a way that gives no scope for the political executive to write an embarrassing order/decision. So much so, the courts cannot infer mens rea on the part of political executive in a charge of ``abuse of office.'' This arrangement keeps the both safe and above the reach of law. That is the reason why we find so many cases against political executives having been discharged without even framing charges, not to speak of conviction, for want of evidence. As the social laws become innovative, so also the ingenuity of its violators.

(d) Granting that there has been permission from the Government to enquire against a particular senior official, such enquiry reports have to be approved by the government for the registration of an FIR and further investigation and furthermore the government has the final authority in taking a decision on the investigation reports of CBI/ACB. Here the government can modify a recommendation to prosecute, either for departmental action or even drop further action. During the year 1995-96, in one I.A.S. officer's case in A.P., though he was in possession of 12 lakhs of disproportionate assets and was recommended for prosecution, the case was closed by the government. This is only one example.

(e) The government has the power of withdrawal of criminal cases under the relevant provisions of Cr.P.C. 1973 even though they are in the final stages of hearing in a court of law on grounds of `public purpose.' In the case of two former CMs of Bihar and Orissa, the Supreme Court on a challenge by public-spirited persons about the legality of withdrawal of prosecution, upheld the provision by a majority of 3:2. There is no review of the above judgment. So much so, hundreds of cases were withdrawn since 1990 in Andhra Pradesh alone. What is the `public purpose' that the State advances in withdrawing corruption cases is left to the judgment of the reader.

Thus, the government is the final arbiter not only in the matter of enquiry and investigation but also in the case of prosecution and termination of trial of the case. While the power permitting or not permitting prosecution and the termination of trial by way of withdrawal of prosecution, though selectively abused, is derived from the relevant provisions of the PC Act 1988 and the Code of Criminal Procedure, the power of withholding enquiry and investigation is not derived from any legal provision. Understanding this subtle distinction is vital. The whole of anti-corruption work is frustrated by the iron curtain of enquiry and investigation, a function illegally exercised by the government.

Suggestions

1. There should be an amendment to the PC Act 1988

(a) to prescribe higher punishments including life imprisonment in bigger bribery cases involving crores of rupees compared to petty corruption involving hundreds and thousands.

(b) to prescribe minimum punishment for big bribery cases to curtail judicial discretion. S. 13(1)(d) prescribed 7 years punishment but the judge sentenced Ms. Jayalalitha to one year in the Pleasant Stay Hotel case.

(c) The definition of `public servants' should be further enlarged to include the office-bearers of political parties as in the case of Kerala Publicmen (Prevention of Corruption) Act 1983 as they enjoy enormous clout not only in the distribution of party tickets during elections but also in the administration of the State, where the particular party is in power.

(d) The general provision of withdrawal of prosecutions should be exempted from the PC Act 1988.

(e) Ensure autonomy of CBI/ACB for enquiry and investigation by implementing the recommendations of NPC or by placing the above investigating agencies under the proposed Lok Pal. Lok Ayukta institutions.

2. Establishment of Lok Pal and Lok Ayukta through Constitutional amendment. That brings (a) permanency to the institution (b) uniformity in character and working (c) ensures public confidence and (d) more importantly ensures freedom of enquiry and investigation. The Lok Pal cannot be isolated from the Lok Ayukta. The Lok Ayukta should supplement the work of the Lok Pal. The fight against corruption at the State level is the foundation for a similar action at the Central level. Therefore, creation of the Lok Ayukta, as the experience of the last 30 years reveal, cannot be left to the sweet will of CMs. The Lok Pal and the Lok Ayukta should administer the PC Act 1988 which will be a comprehensive legislation once the amendments suggested to it are carried out. Even in the present form it has jurisdiction (a) over the office of PM, CM, MP and MLA (b) authorises prosecutions (c) has defined the offence of criminal misconduct widely and is a good piece of legislation. The CBI should work under the control of the Lok Pal and ACBs of the State under the Lok Ayukta or can have their own administrative and investigating setup thereby ensuring the much sought after autonomy. In that event, the need for separate and ideal Lok Pal legislation will be unnecessary. It is a question of matching the institutions with legislation.

3. The Representation of People Act 1952 should be amended to debar persons against whom court framed charges from contesting elections until the disposal of the criminal case; render ineligible to contest election by persons convicted of offences under the PC Act 1988, even after the expiry of prison sentence; render ineligible to contest elections by persons ``held guilty'' of corruption charges by a High Court on a public interest litigation, and those who were indicted of corruption charges by a commission of enquiry presided by a High Court or Supreme Court judge or by the Lok Ayukta.

4. The Official Secrets Act should be amended to allow public servants in the knowledge of kickbacks to come out openly and reveal the information before the Lok Pal or the Lok Ayukta as the case may be.

5. Right to information should be made legal/fundamental right.

G. RAMACHANDRA REDDY

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