LEGISLATIVE NOTE

No.12/LN/Ref./January/2017

For the use of Members of Parliament NOT FOR PUBLICATION1

THE PREVENTION OF CORRUPTION

(AMENDMENT)BILL, 2013

Prepared by Shri B. Phani Kumar, Additional Director (23034536) and Smt. Bela Routh, Joint Director of

Lok Sabha Secretariat under the supervision of Smt. Kalpana Sharma, Joint Secretary and Shri C.N.

Sathyanathan, Director.

The reference material is for personal use of the Members in the discharge of their Parliamentary duties, and is not for publication. This Service is not to be quoted as the source of information as it is based on the sources indicated at the end/in the text.

MEMBERS' REFERENCE SERVICE

LARRDIS

LOK SABHA SECRETARIAT, NEW DELHI

THE PREVENTION OF CORRUPTION (AMENDMENT) BILL, 20132

The Prevention of Corruption (Amendment) Bill, 2013 mainly seeks to

amend the Prevention of Corruption Act, 1988. These changes have been

necessitated due to ratification of the United Nations Convention Against

Corruption (UNCAC) in May, 2011 by India and Judicial pronouncements in

corruption cases to fill in gaps in description and coverage of offence of bribery so

as to bring it in line with the current international practice.

As many as 19 Sections of Prevention of Corruption Act, 1988 are proposed

to be amended through the Bill as well as official amendments3 proposed thereto.

Besides that, amendment to the Prevention of Money Laundering Act, 2002 has

also been proposed. In the Principal Act, various amendments by way of

substitution of Sections 7, 8, 9, 10, 12, 13, 14, 19 and 20 ; omission of Section 11

and 24; insertion in Sections 2, 4 and 32 and new Sections i.e., 17A and 18A and;

consequential amendment to Sections 1, 15, 16 and 23 have been proposed.

The major provisions of the proposed official amendments of 20154 are:-

Providing for more stringent punishment for the offences of bribery, both for

the bribe giver and the bribe taker.

2 The Prevention of Corruption (Amendment) Bill, 2013 was introduced in the Rajya Sabha on 19

th

August, 2013. The Bill was referred to the Department-related Standing Committee on Personnel, Public

Grievances, Law and Justice on 23rd

August, 2013 which presented its Sixty-ninth Report on the Bill to

the Parliament on 6th

February, 2014. The Ministry had also sought the views of the Law Commission on the amendments and the Law Commission made several recommendations in its Two Hundred and

Fifty Fourth Report in 2015. In the light of the recommendations made in those Reports, the Government

proposed as many as thirty-one official amendments to the Bill in 2015, which were substantive in nature

and had far reaching impact on the Bill. The Select Committee of Rajya Sabha on the Prevention of Corruption (Amendment) Bill, 2013 was constituted on 11th December, 2015 to examine the Bill and the

amendments proposed by the Government. The Select Committee presented its Report on 12th August,

2016. 3 Report of the Select Committee of Rajya Sabha on 'The Prevention of Corruption (Amendment) Bill, 2013'

presented on 12 August 2016. 4 PIB Release dated 29 April 2015.

2

Penal provisions being enhanced from minimum 6 months to 3 years and

from maximum 5 years to 7 years (The seven year imprisonment brings

corruption to the heinous crime category).

To contain gain of benefits from profits of corruption, the powers of

attachment are proposed to be conferred upon the trial Court (Special Judge)

instead of the District Court.

Expanding the ambit of provision for containing inducement of public

servant from individuals to commercial entities is being added to contain

supply side of corruption.

Providing for issue of guidelines for commercial organizations to prevent

persons associated with them from bribing a public servant.

The average trial period of cases under PC Act in the last 4 years has been

above 8 years. It is proposed to ensure speedy trial by providing a trial

completion within 2 years.

Intentional enriching by public servants will be construed as criminal

misconduct and possession of disproportionate assets as proof of such illicit

enrichment.

Non-monetary gratification has been covered within the definition of the

word gratification.

By way of explanation 2 to section 7(2), the obligation of a public servant

has been explicitly delineated so that the public servant deters from violating a

statutory duty or any set of rules, government policies, executive instructions and

procedures.

It is also proposed to extend the protection of prior sanction for prosecution

to public servants who cease to hold office due to retirement, resignation etc.

Further, prior sanction for inquiry and investigation shall be required from the

Lokpal or Lokayukta, as the case may be, for investigation of offences relatable to

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recommendations made or decision taken by a public servant in discharge of

official functions or duties.

Salient features of the 2013

Amendment Bill (Government Bill)

Salient Features of the Bill as

modified by the official Amendments

(2015)

The 2013 Bill inter alia seeks to provide

for

Widening of description of both

demand and supply sides of

corruption by providing

criminalization of

(i) bribe giving by any person/

organization to public servant;

(ii) bribe taking by public servant by

direct or indirect manner; and

(iii) corporate liability in bribe

giving.

Protection of honest public servants.

Laying down of criteria and

procedure for sanction of prosecution.

Confiscation of proceeds of

corruption.

– Definition of “undue advantage” –

(Section 2(d) inserted through official

amendment).

– Laying down time line for speedy trial

of corruption cases –Section 4(5)

(inserted through official amendments).

– Restructuring all provisions of

acceptance of bribe by a public servant

under single Section – (Section 7

substituted by official amendment).

– Criminalization of the act of giving of

bribe (Section 8 substituted by official

amendment.)

– Criminal liability for commercial

organisations for bribing public servant.

– Section 9 [Rule making power

provided under new Section 32

substituted by official amendment].

– Liability of senior management of

commercial entity in case of consent or

connivance (Section 10 substituted by

official amendment.)

– Intentional enriching and possession

of disproportionate assets proof of such

illicit enrichment. (Section 13 amended

by the Bill.)

– Sanction for initiating investigation

against a public servant to be granted by

Lokpal or Lokayukta - Section 17A

inserted by official amendments.

However, the Select Committee of

Rajya Sabha suggested amendment to

the proposed new Section 17A that

power of granting sanction for

4

prosecution shall be with the appropriate

Government.

Attachment and forfeiture of property –

Insertion of new Section 18A by the Bill

and subsequent official amendment.

– Extending protection of prior sanction

of the Competent Authority of

appropriate Government to retired

government servant and providing for

timeline for granting sanction by that

Competent Authority – Section 19 to be

amended by the Bill.

Main Provisions of the Principal Act/Amendment Bill, 2013 and official

amendments proposed and reported by the Select Committee

Provisions of the Principal Act 1988/

Amendment Bill 2013.

Amendment Bill (including the

official amendments proposed and as

reported by the Select Committee).

Section 2 of the Principal Act deals with

definitions

The expression 'Undue advantage' has

been inserted vide Clause (d) in Section

2 (through official amendment) to mean

any gratification whatever, other than

legal remuneration.

Section 4 of the Principal Act provides

for trial of an offence by the Special

Judge on day-to-day basis.

Time bound trial of cases: Through an

official Amendment, an obligation has

been cast upon the Special Judge to

ensure the completion of the trail of

corruption cases within a period of two

years from the date of filing of cases and

extendable to four years by the Special

Judge by six months at a time. (vide

proposed amendment by insertion of

sub-section 5 in Section 4 of the

Principal Act)

5

Offences by or relating to Public

servants: Sections 7, 8, 9, 10 of the

Principal Act provide for offences by or

relating to public servants. The 2013

Amendment Bill seeks to substitute

these Sections by providing a new

comprehensive definition which covers

all aspects of passive bribery,

consensual bribery and bribing a public

servant by a commercial organisation

and the punishment therefor.

Bribe giving has been made explicitly

an offence and prescribes similar

punishment to bribe giver and bribe

taker being equal partners of the offence

of corruption. However, exceptions

have been made to provide that if the

bribe giver reports the matter to the law

enforcement authority or the

investigative agency.

Provision has been made (vide official

amendment) for prescribing of

necessary guidelines by the Central

Government for compliance by the

commercial organisations to prevent

persons associated with them from

bribing a public servant and holds the

person in charge of such commercial

organisation to be guilty of offence.

Section 12 of the Principal Act has been

substituted to provide for punishment

for abetment of offences under the

Principal Act: vide the Amendment

Bill, 2013, punishment has been

enhanced to a term of imprisonment of

not less than 3 years extending upto 7

years and also with fine. (i.e. the

proposed Section prescribes enhanced

minimum and maximum punishment to

the abettor as prescribed for bribe

giver/taker.)

The Select Committee endorsed the

amendment made by way of substitution

of Section 12 of the Principal Act for

enhancement of punishment for abettor

at par with bribe giver/taker.

The Select Committee, however, added

the words "other than any offence under

Section 15".

Section 13: of the Principal Act relating

to 'Criminal misconduct by a Public

Servant' has been substituted 'to inter

alia provide for intentionally enriching

himself by a public servant."

Vide the official amendment, the

expression "intentionally enriching" has

been amplified.

6

Section 14 of the Principal Act deals

with habitual offenders.

Vide the 2013 Amendment Act, the

punishment was prescribed as

imprisonment for a term not less than

three years but extendable upto ten years

and also with fine.

The official amendment proposes

enhanced imprisonment of 5 years (from

3 years) and 10 years minimum and

maximum punishment, respectively for

habitual offenders.

-- Prior sanction: New Section 17A as

recommended by the Select Committee

makes it obligatory on the police/probe

agency to obtain prior sanction in cases

of corruption involving the employees

of the Union/State before initiating any

inquiry/investigation. The competent

authority shall convey its decision

within 3 months, which is extendable by

another month. No such approval is

necessary if a person is arrested on the

spot on the charge of accepting or

attempting to accept any undue

advantage.

The official amendment (2015) provided

for approval of Lokpal/Lok Ayuktas.

-- Attachment and Forfeiture of Property:

New Section 18A has been proposed to

be inserted. It inter alia provides that

except as provided under the Money

Laundering Act 2002, the provisions of

the Criminal Law Amendment

Ordinance, 1944 shall apply in respect

of attachment and forfeiture of property

or confiscation of money obtained

through corrupt practices.

The references to the District Judge (in

the above Ordinance) shall be construed

as references to Special Judge.

7

Section 20 of the Principal Act provides

for presumption where public servant

accepts gratification other than legal

remuneration.

Section 20 proposed to be substituted

(by way of official amendment) to

specify that during a trial of offences

mentioned under Section 7, if it is

proved that the public servant has

obtained an undue advantage, it shall be

presumed that the advantage was taken

by the public servant in order to perform

a public duty improperly.

The words 'Public duty' has been

recommended by the Select Committee

for the words "Public function or

activity".

-- Power to make Rules: The newly

proposed Section 32 (by the official

amendments) empowers the Central

Government to make rules for carrying

out the provisions of the Act, in

particular, prescribing guidelines about

the adequate procedures for compliance

by commercial organisations to prevent

the persons associated with them from

bribing any Public Servant (vide Section

9(5)). Rules so made, shall be laid

before each House of Parliament.

-- Vide proposed Amendment of Part A of

the Schedule of the Money Laundering

Act, 2002 (by official amendment and

recommended by the Select Committee)

certain new offences are proposed to be

covered under that Act. (These

amendments are necessitated in view of

the proposed insertion of new Section

18A in the Prevention of Corruption Act

1988, vide the official amendment).