DR.

RAM MANOHAR LOHIYA NATIONAL LAW

UNIVERSITY LUCKNOW
SESSION 2016-17

Final Draft
Criminal Procedure Code
Trial of special offences under Prevention of Corruption Act, 1988
Submitted for the project work undertaken in the partial fulfillment of B.A. LL.B. (Hons.) 5
years integrated course of Dr. Ram Manohar Lohiya NLU, Lucknow.

SUBMITTED TO: SUBMITTED BY:

.
(Asst. Prof.) Roll No.
Dr. RMLNLU, Lucknow 5th Semester
ACKNOWLEDGEMENT

I would hereby extend a bouquet of thanks to my CrPC teacher,Lecturer in law who encouraged
me to make a project on such a comprehensive topic. This was really a tedious job but speaking
truth, this truly enlightened my mind and provided me with great knowledge about the subject.

I would also like to extend my gratitude towards my friends and seniors who supported me
through thick and thin. They were always ready for any kind of help I needed in the hardest
times.

I also wish to acknowledge that this project couldn’t be completed without the help of my
university Library Dr. Madhu Limaye library and through university’s internet.

Thanking all.
TABLE OF CONTENT

1. Hypothesis

2. Introduction

3. Law and provisions to tackle corruption

4. Offences punishable under the Prevention of Corruption Act, 1988

4. Trial of offences under Prevention of Corruption, 1988

5. Recent judgments

6. Problems and flaws in the present criminal law system

7. Conclusion

8. Present Scenario

9. References
HYPOTHESIS

The research proceeds with the stand point that there is a need for a different procedure for
prevention of corruption activities in the country in order to curb such white collar crimes.

INTRODUCTION

India is a large country with a population of over a billion people. It is the second most populous
country in the world after China. It is one of the fastest growing economies in the world and is
attracting huge investments from developed countries. In spite of the healthy growth indices, a
vast population still lives in poverty and does not have access to basic sanitation, healthcare and
education. The country’s progress is seriously hampered by all pervasive corruption. In India,
even in 4th century B.C. ‘Corruption’ had been a key theme as reflected in Kautilya’s
Arthashastra, an ancient Hindu treatise on statecraft, economic policy and military strategy
penned during the time. General Assembly Resolution 58/4 defines ‘Corruption is an insidious
plague that has a wide range of corrosive effects on societies. It undermines democracy and the
rule of law, leads to violations of human rights, distorts markets, erodes the quality of life and
allows organised crime, terrorism and other threats to human security to flourish’.

The lawmakers of India have always been conscious of this problem. It is preventing the benefits
of development from reaching the deprived sections of society. Weeding out corruption today is
a major challenge before Indian society.

The cause of the community deserves better treatment at the hands of the Court in the discharge
of its judicial functions. The Community or the State is not a persona non grata whose cause may
be treated with disdain. The entire community is aggrieved if economic offenders who ruin the
economy of the State are not brought to book. A murder may be committed in the heat of
moment upon passions being aroused. An economic offence is committed with cool calculation
and deliberate design with an eye on personal profit regardless of the consequence to the
Community. A disregard for the interest of the Community can be manifested only at the cost of
forfeiting the trust and faith of the community in the system to administer justice in an even
handed manner without fear of criticism from the quarters which view white collar crimes with a
permissive eye, unmindful of the damage; done to the National Economy and National Interest.1

LAW AND PROVISIONS TO TACKLE CORRUPTION

The British enacted the first codified law, The IPC, in 1860. It had a chapter dealing with
offences committed by public servants involving corruption and corrupt practices. Later, a
special piece of legislation was enacted, i.e. The Prevention of Corruption Act(PCA) 1947, to
deal specifically with the problem of corruption in public life. Amendments were made from
time to time to keep pace with the changing times. Later on, in 1988, it was replaced by a more
comprehensive and broad piece of legislation - The Prevention of Corruption Act 1988.

Apart from this Act, India is a signatory to the United Nations Convention against Corruption
(UNCAC). It has signed Extradition and Mutual Legal Assistance Treaties in Criminal Matters
with a number of countries to ensure mutual co-operation in matters pertaining to investigation
of corruption and other criminal cases. Co-operation is sought from other countries under these
treaties through the instrument of Letters Rogatory (LRs)

The government has put in place a well-developed legal and institutional framework, with
institutions including the Central Bureau of Investigation, the Office of the Comptroller and the
Auditor General, and the Central Vigilance Commission. The Supreme Court, in particular, has
taken a firm stance against corruption in recent years and made several important rulings.
Another achievement has been the enactment of the Right to Information (RTI) Act in 2005,
which grants citizens access to government information and a mechanism to control public
spending. In spite of progress, however, law enforcement remains weak and reforms have a long
way to go.

1. The Prevention of Corruption Act, 1988 - The Prevention of Corruption Act 1947 to deal
specifically with the problem of corruption in public life. Amendments were made from time to
time to keep pace with the changing times. Later on, in 1988, it was replaced by a more
comprehensive and broad piece of legislation – The Prevention of Corruption Act 1988.

1
Gujarat v. Mohanlal Jitamalji Porwal AIR (1987) 1321
The Prevention of Corruption Act 1988 (hereinafter referred to as The Act), was enacted to
consolidate different anti-corruption provisions from various pieces of legislation under one
umbrella and to make them more effective. The Corruption Act is the main law for dealing with
offences pertaining to corruption in India, however many avenues of corruption cannot be dealt
with under the Prevention of Corruption Act, 1988.

2. Right to Information Act, 2005 – We all are aware about the fact that too much secrecy in
public administration breeds corruption. This RTI Act helps in ensuring efficiency, transparency
and accountability in public life. This Act requires all public authorities, except the ones that
handle work relating to national security, to publish all information about their functioning at
regular intervals through various means of communication, including the Internet.

3. India and the United Nations Convention against Corruption 2003 (UNCAC) - India has
welcomed the UNCAC, which provides for international co-operation and mutual legal
assistance in investigating cases of corruption and recovery of assets. India signed the UNCAC
in December 2005. By signing the Convention India has reiterated its resolve to strengthen
international co-operation as envisaged in the Convention.

OFFENCES PUNISHABLE UNDER THE ACT

Meaning of word Public Servant – The definition of “public servant” in sec. 2 of this Act even
covers certain categories of people who are not employed by the government. The Corruption
Act does not only cover persons employed by the government or in the regular pay of the
government but also persons remunerated by fees or commission for the performance of any
public duty by the Government but not employed by it. The latter category is very important in
my opinion because, by virtue of their position, such persons enjoy considerable power and can
abuse the same to indulge in corrupt activities.

Meaning of word Gratification – The term ‘gratification’ included in section 7 is not only
restricted to pecuniary gratifications or to gratifications estimable in money but any other kind of
help that makes him any illegal gain.
 1. Bribery of Public Servants: punishable by Sect. 7, 10, 11 & 12 of the Corruption Act –

Sec. 7 punishes a public servant or a person expecting to be a public servant, who accepts or
obtains or agrees to accept or attempts to obtain from any person, for himself or for any other
person, any gratification, other than legal remuneration, as a motive or reward for doing or
forbearing to do any official act. Actual exchange of a bribe is not an essential requirement to be
prosecuted under this law. A willing bribe giver is also punishable under sec. 12 of the
Corruption Act.

All these offences are punishable with a minimum imprisonment of six months, extendable up to
five years, and also with a fine.

2. Embezzlement, Misappropriation of Property by Public Servants punishable u/s 13 (1) (c)

of the Corruption Act -

Sec. 13 (1) (c) punishes public servants who dishonestly or fraudulently misappropriate or
convert to their own use any property entrusted to them as a public servant. This offence is
punishable with a minimum imprisonment of one year, extendable up to seven years, and also
with a fine.

3. Trading in Influence: punishable u/s. 8 & 9 of the Corruption Act –

Section 8 & 9 punish middlemen or touts who accept or obtain or agree to accept or attempt to
obtain, gratification as a motive or reward for inducing by corrupt or illegal means, (sec. 8) or by
exercise of personal influence (sec. 9), any public servant, to do or forbear to do any official act.

These offences are punishable with a minimum imprisonment of six months, extendable up to
five years, and also with a fine.

4. Abuse of Functions by Public Servants: punishable by sec. 13 (1) (d) of the Corruption
Act -

Sec. 13 (1) (d) punishes public servants who abuse their official position to obtain for themselves
or any other person, any valuable thing or pecuniary advantage (quid pro quo is not an essential
requirement). This offence is also punishable with a minimum imprisonment of one year,
extendable up to seven years, and also with a fine.
TRIAL OF OFFENCES UNDER PCA, 1988

“The sanction contemplated in Section 197 of the Code concerns a public servant who “is
accused of any offence alleged to have been committed by him while acting or purporting to act
in the discharge of his official duty”, whereas the offences contemplated in Section 19 of the Act
are those which cannot be treated as acts either directly or even purportedly done in the discharge
of his official duties.”2 That means “Section 197 of the Code and Section 19 of the Act operate in
conceptually different fields”.3

“To start a prosecution under section 19 of the Act, where the offence has been committed by a
public servant who is holding the office and by misusing or abusing the powers of the office, he
has committed the offence. A sanction is to be given by the Government or the authority which
would have been competent to remove the public servant from his office at the time when the
offence was alleged to have been committed.”4

“Time-limit of three months for grant of sanction for prosecution must be strictly adhered to.
However, additional time of one month may be allowed where consultation is required with the
Attorney General (AG) or any other law officer in the AG's office.”5

The special judge, who will be appointed under section 3 of the Act, has the power to take into
cognizance of the corruption offences without the accused being commissioned to him for trial.
Except as for S. 2(1), the provisions of CrPC shall apply to the proceedings before a Special
Judge. Hence, the court of the Special Judge shall be deemed to be a Court of Session and the
person conducting a prosecution before a Special Judge shall be deemed to be a public
prosecutor. The provisions of section 326 and section 475 of the CrPC shall apply to the
proceedings before a Special Judge and for purpose of the said provisions, a Special Judge shall
be deemed to be a magistrate.

2
Dr. Subramanian Swamy vs. Dr. Manmohan Singh and Anr AIR 2012 SC 1185
3
Lalu Prasad vs. State of Bihar 2007 (1) SCC 49
4
A.R. Antulay vs R.S. Naik & Ors 1987 AIR 1140
5
Vineet Narain and Ors. v. Union of India (UOI) and Anr. AIR 1998 SC 889
A Special Judge may pass a sentence authorized by law for the punishment of the offence of
which a person is convicted. A Special Judge, while trying any offence punishable under the Act,
shall exercise all powers and functions exercised by a District Judge under the Criminal Law
Amendment Ordinance, 1944.

Where a Special Judge tries any offence specified in Sec. 3(1), alleged to have been committed
by a public servant, he shall try the offence in a summarily way and the provisions of s. 262 to
265 (both inclusive) of the said code shall as far as may be apply to such trial. Provided that in
the case of any conviction in a summary trial under this section this shall be lawful for the
Special Judge to pass a sentence of imprisonment for a term not exceeding one year. However,
when at the commencement of or in the course of a summary trial it appears to the Special Judge
that the nature of the case is such that a sentence of imprisonment for a term exceeding one year
may have to be passed or it is undesirable to try the case summarily, the Special judge shall
record all order to that effect and thereafter recall any witnesses who may have been examined
and proceed to hear and re-hear the case in accordance with the procedure prescribed by the said
code for the trial of warrant cases by Magistrates.

RECENT JUDGMENTS

1. C.K. Jaffer Sharief v. State (Through CBI)6

In the instant case, the appellant besides working as the Minister of Railways was the Head of
the two PSUs. The record indicates that the four persons while in London had performed certain
tasks to assist the Minister in the discharge of his public duties. Therefore, the appellant cannot
be construed to have adopted corrupt or illegal means or to have abused his position as public
servant to obtain any valuable thing or pecuniary advantage either for him or for any of the said
four persons. The said decision cannot be said to be actuated by a dishonest intention to obtain an
undue pecuniary advantage. If we performs a bare reading or the provision of Section 13 (i) (d)
the Act, it would go to show that the offence contemplated therein is committed, if a public
servant obtains for himself or any other person any valuable thing or pecuniary advantage by
corrupt or illegal means: by aiming his position as public servant or without any public interest.
6
(2012) 39 SCD 721
That dishonest intention is the gist of the offence under section 13(1) (d) is implicit in the words
used i.e. corrupt or illegal means and abuse of position as a public servant.

2. Anup Kumar Srivastava & Anr. v. CBI7

The essential ingredients of Section 7 are that:

(i) The person who accept gratification should be a public servant,

(ii) He should have accepted the gratification for himself and the gratification should be as a
motive or reward for doing or forbearing to do any official act or for showing, or forbearing to
show, in the exercise or his official function, favour or disfavour to any person or for rendering
or attempting to render any service or disservice to any person.

In so far sec.13 (1) (d) of the Act is concerned, the essential ingredients are

(i) He should be a public servant,

(ii) He should have used corrupt or illegal means or otherwise abused his position as such public
servant and,

(iii) He should have obtained a valuable things or pecuniary advantage for himself or for any
other person, without any public interest.

3. 2g Spectrum Scam8

The 2G spectrum scandal was an Indian telecommunications scam and political scandal in which
politicians and government officials under the Indian National Congress(Congress) coalition
government undercharged mobile telephone companies for frequency allocation licenses, which
they then used to create 2G spectrum subscriptions for cell phones. The Government chose NM
Rothschild & Sons to design a first-of-its-kind e-auction mechanism in the world, a US$2.27
billion landmark deal, in which they got atleast Rs 30.5 crore in commission. The difference
between the money collected and that mandated to be collected was estimated by
the Comptroller and Auditor General of India at 1.76 trillion (US$26 billion), based on 2010 3G
and BWA spectrum-auction prices. In a charge sheet filed on 2 April 2011 by the Central Bureau
7
2012 (11) TMI 953
8
https://en.wikipedia.org/wiki/2G_spectrum_scam
of Investigation (CBI, the investigating agency), the loss was pegged at 309,845.5
million (US$4.6 billion). In a 19 August 2011 reply to the CBI, the Telecom Regulatory
Authority of India (TRAI) said that the government had gained over 30 billion (US$450 million)
by selling 2G spectrum. Minister of Communications & IT Kapil Sibal said in a 2011 press
conference that "zero loss" was incurred by distributing 2G licenses on a first-come-first-
served basis.

On 2 February 2012, the Supreme Court of India ruled on a public interest litigation (PIL) related
to the 2G spectrum scam. The court declared the allotment of spectrum "unconstitutional and
arbitrary", cancelling the 122 licenses issued in 2008 under A. Raja(Minister of Communications
& IT from 2007 to 2009), the primary official accused. According to the court, Raja "wanted to
favor some companies at the cost of the public exchequer" and "virtually gifted away important
national asset." The zero-loss theory was discredited on 3 August 2012 when, after a Supreme
Court directive, the government of India revised the base price for 5-MHz 2G spectrum auctions
to 140 billion(US$2.1 billion), raising its value to about 28 billion (US$420 million) per MHz
(near the Comptroller and Auditor General estimate of 33.5 billion (US$500 million) per MHz).

Although the policy for awarding licences was first-come, first-served, Raja changed the rules so
it applied to compliance with conditions instead of the application itself. On 10 January 2008,
companies were given only a few hours to supply Letters of Intent and payments; some
executives were allegedly tipped off by Raja, and they (and the minister) were imprisoned. In
2011 Time ranked the scam second on their "Top 10 Abuses of Power" list, behind the Watergate
scandal.9

4. Gujarat v. Mohanlal Jitamalji Porwal10

Hon’ble Supreme Court of India in this case observed as under

"To deny the opportunity to remove the formal defect was to abort a case against an alleged
economic offender. Ends of justice are not satisfied only when the accused in a criminal case is
acquitted. The community acting through the State and the Public Prosecutor is also entitled to
justice. The cause of the community deserves equal treatment at the hands of the court in the
discharge of its judicial functions. The community or the State is not a persona-non-grata whose
9
2G trial begins today, ADAG faces court first". The Times Of India. 11 November 2011
10
Gujarat v. Mohanlal Jitamalji Porwal AIR (1987) 1321
cause may be treated with disdain. The entire community is aggrieved if the economic offenders
who ruin the economy of the State are not brought to book. A murder may be committed in the
heat of moment upon passions being aroused. An economic offence is committed with cool
calculation and deliberate design with an eye on personal profit regardless of the consequence to
the community. A disregard for the interest of the community can be manifested only at the cost
of forfeiting the trust and faith of the community in the system to administer justice in an even-
handed manner without fear of criticism from the quarters which view white collar crimes with a
permissive eye unmindful of the damage done to the national economy and national interest"11

5. Dr. Subramanian Swamy vs. Dr. Manmohan Singh and Anr 12

S. 19 of the PCA bars the Court from taking cognizance of cases of Corruption against Public
Servant under S. 7, 10, 11, 13 and 15 of the Act, unless the Central or State Government has
accorded sanction. This provision, in effect, imposes fetters on the private citizens as well as
prosecutors. The provision which has been enacted to provide protection to public servants from
malicious prosecution cannot be used as a shield to protect corrupt Police Officials. The
provision being an exception to the equality provision under Article 14 should be couched with
the Rule of Law. There are instances where the delay in granting sanction to prosecute the public
servant under S.19 of the PCA has resulted in quashing of the prosecution. Out of the 319
requests of the sanction for prosecution against the public servants, sanction is awaited in respect
of 126 of such requests, which amount to 1/3rd of the total requests. Most often, such delay in
grant of sanction is to evade criminal prosecution. These instances show a blatant subversion of
Rule of Law. The S. 19 of the PCA is not in consonance with the due process of law which was
read into our Constitution vide Meneka Gandhi Vs Union of India. Hence, the ‘due process of
Law’ was read into the section by the Court by introducing a time limit in S. 19 of the Prevention
of Corruption Act

11
http://shortnotesonlaw.blogspot.in/2011/05/state-of-gujarat-vs-mohanlal-jitamalji.html

12
Dr. Subramanian Swamy vs. Dr. Manmohan Singh and Anr AIR 2012 SC 1185
PROBLEMS AND FLAWS IN THE PRESENT CRIMINAL LAW SYSTEM

1. Lack of Effect –

Despite the fact that the Act has established a legal framework to punish the corruption of public
servants with fines and up to three years in prison, actual punishment for these offenses rarely
occurs. Not only are the laws frequently ignored by those perpetrating the corruption, but they
are also ignored by those who are charged with the duty of penalizing this conduct. The
weaknesses of law enforcement in India, compounded with the lack of effort on the part of the
criminal justice system, has resulted in weak enforcement of the Act, which in turn has severely
limited the Act’s ability to reduce political corruption.

2. The Act fails the International Standard of Fighting Corruption -

While the language of the Act addresses the corruption of Indian public authorities, the Act is
silent on the major problem of foreign corruption. That is, the Act does not provide for the
penalization of corruption by Indian citizens or corporations in international business
transactions, nor does it provide for punishment of foreign perpetrators of corruption. India
signed the UNCAC in December of 2005, but has not yet ratified the treaty. By signing but not
ratifying the treaty, India is not legally bound to follow its terms. India has been encouraged to
endorse and ratify the treaty to demonstrate its commitment to the fight against corruption, and to
receive the benefits of the treaty, namely the cooperation of other member states in recovering
assets that were taken from India by corrupt means.

3. No Law to tackle Corruption in the Private Sector -

The Act is the existing law in India dealing with offences relating to corruption. This law,
however, was essentially enacted to take care of corruption cases in the public sector and by
public servants, whereas in fact, there is widespread corruption in the private sector also which
seriously hampers the overall growth and development of the country.

4. Inherent Delays in the Criminal Justice System –

The system is painfully slow and punishments are not swift. As explained earlier, sec. 19 of the
Corruption Act requires prior permission of the authority competent to remove a public servant
from his or her post before launching prosecution against him or her in court. This often delays
the launch of a prosecution. Upon receiving reports from the investigating agencies seeking
approval for a prosecution, the concerned authorities often take considerable time to grant such
permission. Also, permission is sometimes denied on political and other grounds.

5. Ineffective Asset Recovery –

Though there are legal provisions for confiscation and recovery of property acquired as proceeds
of crime, such recovery is not easy. Corrupt public servants often acquire properties with the
proceeds of crime in the names of their friends, relatives, family members and other
acquaintances. Therefore, it is not easy to prove in court that such properties are the proceeds of
crime. Such properties are quite often held offshore under strict privacy laws and it is not easy to
trace and recover them, especially in the absence of desired international co-operation.

PRESENT SCENARIO:

“The Government is committed to ensuring probity among public servants and to protect them
from frivolous allegations.

the achievements of his government in tackling the menace of corruption in bureaucracy, he said
several steps have been taken to make the bureaucracy more efficient, performance-oriented and
accountable

The Prime Minister said India has entered into agreements with many countries for exchanging
real time information on black money besides signing an Inter Government Agreement with the
US to implement the Foreign Account Tax Compliance Act (FATCA).
Besides this, a comprehensive and deterrent law, the Black Money Undisclosed Foreign Income
and Assets and Imposition of Tax Act, has been enacted which provides for stringent penalties
and prosecution.
The Prime Minister said “We have also introduced a provision under the Prevention of Money
Laundering Act for restitution of assets. This will enable millions of poor investors who have lost
money in ponzi schemes to recover a part of their hard earned money,” .13
Refering to the newly-introduced scheme of directly paying the subsidy on cooking gas to the
user's bank account, he said: "We are sending the LPG (cooking gas) subsidy directly to the bank
account. This is the biggest subsidy across the globe which is benefiting over 12 crore Indians.
By adopting this mean, we have been able to plug hundreds of crores of monetary leakages."

CONCLUSION

Corruption is found to be one of the most damaging consequences of poor governance and
poverty, classified by lack of efficiency, transparency and accountability. Corruption diminishes
investment and suppresses economic growth and development and also reduces the effectiveness
of public administration. In the last three decades, Indian leaders have begun the complicated
procedure of rooting out corrupt practices using various legal treatments. The enactment of the
Act created a set of guidelines instructive on the punishment of corrupt public officials.

But still the Act is not implemented in such a way to curb all the corruption practices completely,
and in the near future where there is a strict need to form such laws which can deter the
corruption activities. The legislature need to make some amendments also and laid down some
guidelines to punish the person in such activities and take some strict decisions to stop people
from taking part in such activities. And the punishment should be the same for every individual
either he is a minister or a person in any government office. They should not be discriminated on
the basis of the position they hold in the administration.

Also the government has to look into the recovery of the amount embezzled in the corruption
activity. As that money belongs to our country and it will be really helpful in the development of
the country.

13
http://indianexpress.com/article/india/india-news-india/govt-unsparing-in-punishing-the-corrupt-pm-narendra-
modi/
REFERENCES

RESEARCH PAPER

1. Effective legal and practical measures for combating corruption: a criminal justice response –
an Indian perspective; by Dharam Chand Jain.

2. The Current State of India's Anti-Corruption Reform: The RTI and PCA; by Christina E.
Humphreys

CASE LAWS

1. Gujarat v. Mohanlal Jitamalji Porwal AIR (1987) 1321

2. Dr. Subramanian Swamy vs. Dr. Manmohan Singh and Anr AIR 2012 SC 1185

3. Lalu Prasad vs. State of Bihar 2007 (1) SCC 49

4. A.R. Antulay vs R.S. Naik & Ors 1987 AIR 1140

5. Vineet Narain and Ors. v. Union of India (UOI) and Anr. AIR 1998 SC 889

6. C.K. Jaffer Sharief v. State (Through CBI) (2012) 39 SCD 721

7. Anup Kumar Srivastava & Anr. v. CBI 2012 (11) TMI 953

WEB SOURCES:

http://www.manupatrafast.in/

http://supremecourtofindia.nic.in/

http://www.arabnews.com/news/449902

http://www.indiankanoon.org/