LEGAL REGULATION OF CORRUPTION IN INDIA

INTRODUCTION
"If we cannot make India corruption-free, then the vision of making the nation developed by
2020 would remain as a dream." - Dr. A.P.J.Abdul Kalam
Corruption is considered to be one of the greatest impediments on the way towards progress
for developing country like India. The economic, social and cultural structure of our country
is very strong; however, due to the menace called- Corruption, it has been adversely affected
and has become defenceless against the forces of anti-social elements.

According to Shri N.Vittal, Former Chief Vigilance Commissioner, the first stage in the
dynamics of the rule of law is the framing of effective rules and laws, which are equipped to
hinder the ever-rising escalation of the corruption graph. It is in this context that the
Prevention of Corruption Act, 1988 becomes highly significant.

The legal regulation of corruption strengthened from the enactment of Prevention of

Corruption Act, 1988. This act majorly contributed in curbing corruption by widening the
definition of “Public Servant”. It is generally observed that corruption cripples the entire
system of governance in a country by infecting the main organs of the government, i.e.
judiciary, executive and legislature.

Corruption is defined as the use of public office for private gains. Scales of corruption can be
Grand, Middling or Petty and payment of bribes can be due to collusion between the bribe
taker and the bribe giver, due to coercion or even anticipatory. Existence of corruption implies
that there are corrupt people, there are also corrupt practices, and there is a corrupt system.
Therefore, all the three have to be fought simultaneously to eliminate the vice of corruption.
The present system provides for taking on the corrupt persons through a legal mechanism,
which has not been found to be very effective. Many corrupt practices fall outside the purview
of existing laws and need to be tackled by people themselves. The responsibility for dealing
with corrupt people, corrupt practices and corrupt systems devolves equally on individuals,
civil society institutions, legislature, executive, and the judiciary.

1
WHO CAN INDULGE INTO CORRUPTION IN INDIA
India is one of the most regulated economies of the world with powers concentrated in few
hands. It is a poor country with scarce resources where demand is always more than supply.
The receivers of the public services are largely poor, ignorant, and illiterate. There is also
absence of transparency and accountability of the public servants. There is no system of
rewards and punishments for the public servants. There is also no right to information. The
license-permit-quota-inspector regime is pervasive in India since independence and continues
even after liberalization and globalization of 1991. In addition, there are 3000 central statutes
and 10 times as many state statutes plus subsidiary and administrative laws (most of them
archaic), with several exemption clauses and discretionary powers sans accountability. All
these conditions are fertile breeding grounds of corruption. At present, 19.5 million people
hold public office with central and state governments, quasi-central and quasi-state
institutions, and rural and urban local bodies spread over 200,000 establishments and offices
all over India.
CONSEQUENCES OF CORRUPTION
Corruption is found to be one of the most damaging consequences of poor governance
characterized by lack of both transparency and accountability. Corruption lowers investment
and hinders economic growth and human development by limiting access to basic social
services as well as increasing the cost of their delivery. It also increases poverty, subverts the
financial system,, and undermines the legitimacy of the state. Thus, corruption is anti-poor,
antidevelopment, anti-growth, anti-investment, and inequitable. The cost of corruption to a
nation is very high.
Adverse effects of corruption on growth have been statistically corroborated from cross-
country data. Based on the corruption rankings data assembled from the business and
international communities in seventy countries finds a significant negative association
between the Corruption Index and the rates of investment and economic growth. A one
standard deviation improvement in the Corruption Index is estimated to be associated with an
increase in the investment rate by about 3 percent of the Gross Domestic Product1.
INTERNATIONAL PERSPECTIVE ON INDIA

1
(Bardhan: Corruption & Development, Journal of Economic Literature, September 1997).

2
India is amongst the most corrupt countries of the world with a score of only 2.7 out of 10 and
ranks 71st amongst 102 countries in 2002. India’s score has declined from 2.9 in 1999 to 2.7
in 2002. TI’s survey of international business’ perceptions ranks India worse than China.
World Competitiveness Year Book 2000 also ranks India amongst those countries where
bribing and corruption is very high.
CORRUPTION PERCEPTION INDEX AND RANK OF INDIA (CPI), 1995-20022
Year No. Of countries CPI Rank
1995 41 2.78 35
1996 54 2.63 46
1997 52 2.75 45
1998 85 2.9 66
1999 99 2.9 72
2000 90 2.8 69
2001 91 2.7 71
2002 102 2.7 71
The corruption perception index is a composite index. In 2002, India with a score of 2.7 ranks
71st among 102 countries covered. Yearly variations in rank, if any do not reflect either
improvement or deterioration in level of corruption.
CPI as the name indicates is a study based on perception of business people and risk analysts.
It neither reveals the level and extent of corruption nor identifies sectors where corruption is
prevalent. It is not based on hard data. Hence CPI though relevant and gives an overall view,
falls short, if its data is to be used for identifying areas that need to be tackled, planning
activities and conducting programs for the specific sectors. Hence the need for national and
state level assessments of the actual experiences of the common man who is the legitimate
recipient of the public services delivered by the government, and bears the brunt of all acts of
faulty governance and corruption.
PEOPLES’ PERSPECTIVE
Indians think that corruption cannot be eliminated in India – at least not in their lifetime. This
pessimistic and cynical perception of the people is largely an outcome of confusing corruption
with all kinds of illegal actions and activities like dishonesty, cheating, duping etc. Most

2
Source: Corruption Perception Index, Transparency International, Berlin.

3
illegal actions, many of which are private actions, are confused with corruption. The
Prevention of Corruption Act 1988 and Indian Penal Code clearly distinguish between
corruption indulged by public servants for private gains and illegal actions by individuals.
There are separate Acts in India for dealing with different kinds of illegal actions of private
individuals. For example, if a public servant amasses wealth disproportionate to his known
sources of income then he can be tried under Prevention of Corruption Act 1988. However, if
a businessperson amasses wealth disproportionate to his known source of income he will be
dealt under Income Tax Act for concealing his income and not under Prevention of
Corruption Act.

LEGAL REGULATION OF CORRUPTION

The Prevention of Corruption Act, 1988 (henceforth referred to as PCA)

To deal with corruption amongst public servants India enacted Prevention of Corruption Act
1988, replacing Prevention of Corruption Act 1947. PCA 1988 incorporates provisions of
chapter IX of the Indian Penal Code to deal with Public servants and those who abet them by
way of criminal misconduct and provides to enable attachment of their ill-gotten wealth
obtained through corrupt means. This act also widens the scope of definition of Public
servants. Public servant means any person in the service, pay of the government, or
remunerated by the government by fees or commission for the performance of any public
duty. Public duty means a duty in the discharge of which the state, the public, or the
community at large has an interest. The ‘State’ includes a corporation established by or under
a central, provincial or state act or an authority or a body owned or controlled or aided by the
government or a government company defined in section 617 of the Company’s Act 1956. In
India in addition to a large number of health and educational institutions, the government also
aids many other kinds of organisations. Hence, the employees of such bodies are also covered
by this act.
Normally corruption is defined as using public office for private gains. In PCA 1988, Public
Servant and Public duty have very wide definitions covering every person who is in the actual
possession of the situation of a public servant and discharging public duty which the state,
public or the community at large has a interest. Persons holding various public offices are
public servants, whether appointed by the government or not.

4
ORIGIN:-
The Prevention of Corruption Act, 1988 came into force on 9th September, 1988. it
incorporated the Prevention of Corruption Act, 1947, the Criminal Law Amendment Act,
1952, and sec. 161 to 165-A of the Indian Penal Code with modifications, enlarged the scope
of the definition of the expression 'Public Servant' and amended the Criminal Law
Amendment Ordinance,1944. The PCA, 1988l, thereby widened the coverage, strengthened
the provisions and made them more effective

PREVENTION OF CORRUPTION ACT, 1988

The most important and revolutionary definitions under the Prevent of Corruption Act, 1988
are-
1) Public Duty: It means a duty that is dined for the benefit of the State, the public or the 
community at a large. In this context, State would mean: 
a) A corporation established by or under a Central, Provincial or State Act.
b) An authority or a body owned controlled or aided by the Government Company as defined
in Sec. 617 of the Companies Act, 1956.

2) Public Servant: It is unique term in Anti-corruption law, being the deciding factor at the
threshold, of one's liability, depending on his being public servant. The term 'Public Servant'
was not defined under the Prevent of Corruption Act, 1947 and the Act adopted the definition
of the term under sec. 21 of the Indian Penal Code. The PCA of 1988 provides a wider
definition in the Act itself under clause (c) of sec. 2. The salient aspects of the new definition
are, firstly, under clause (c) of Sec.2 of the PCA, the emphasis is on public duty and not on
the Authority remunerating and secondly, the definition is enlarged so as to include the
office-bearers of the registered co-operative societies receiving any financial aid from the
Government, or from a Government corporation or company, the employees of universities,
public service commission and banks etc.

Further, the following genres of persons fall within the ambit of 'public servant:
a) Any person who is paid by the government or local authority or remunerated by way of
fees or commission for the performance of or is in the service of a corporation established by
or under a Central, Provincial or State Act, or an authority or body owned or controlled or
aided by the Government company as defined in the Companies Act, 1956. 
b) Any Judge or any person authorized by a court of justice to perform any duty, in

5
connection with the administration of justice or any arbitrator to whom any cause or matter
has been referred for decision or report by a court of justice or report by a court of justice or
by a competent public authority.
c) Any person who holds an office result to which he is empowered to prepare, publish
maintain or revise an electoral roll or to conduct an election or part of an election, or is
authorized or required to perform any public duty. 
d) Any person who is the president, secretary or other office bearer of a registered co
operative society engaged in agriculture, industry, trade or banking, receiving or having
received an financial aid from the Central or State Government or any authority or body
owned, controlled or aided by Government or Government company as defined in Sec. 617 of
the Companies Act, 1956. 
e) Any person who is a chairman, member or employee of any service commission or Board
or a member of any selection committee appointed by such Commission or Board for the
conduct of any examination or making any selection on their behalf. 
f) Any person who is the Vice-Chancellor or member of any governing body, professor,
reader or lecturer of any University and any person whose services have been availed of by a
University. 
g) An office-bearer or an employee of an educational, scientific, social, cultural or other
institution receiving or having received any financial assistance from the Central or State
government or local or other public authority. 
Explanation 1 states that it is immaterial whether the person falling within the periphery of
the above clauses is appointed by Government or not. 
Explanation 2 states that a person who is actually holding the position of the situation of
public servant irrespective of the fact that he might not have the right to hold that situation
shall be deemed to be 'public servant'.
Thus the Act has widened the definition of Public servant and brought a very large category
of persons under its scope which earlier was lacking. Thus the act makes a very large number
of people both employed by government and non-government organisations responsible and
punishable for their unlawful and corrupt acts.
Furthermore Central and the State Government is empowered to appoint Special Judge who
should be or should have been a Session Judge or an Additional Session Judge or Assistant
Session Judge under the Code of Criminal Procedure, 1973. Every offence mentioned in
Section 3(1) shall be tried by the Special Judge for the area within which it was committed.

6
When trying any case, a Special Judge may also try any offence other than what is specified
in Section 3, which the accused may be, under Cr.P.C. be charged at the same trial.

Except as for Section 2(1), the provisions of Cr.P.C. 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. A Special Judge may also pass a sentence authorized by law for the
punishment of the offence of which a person is convicted and exercise all powers and
functions exercised by a District Judge under the Criminal Law Amendment Ordinance,
1944.

OFFENCES AND PENALTIES

The offences under the PCA constitute taking any kind of gratification other than legal
remuneration in respect of an official act, or to influence public servant by corrupt or illegal
means. If a public servant is found guilty he shall be punishable with imprisonment which
shall be not less than 6 months but which may extend to 5 years and shall also be liable to
fine.  Further abetment by public servant of offences as defined in Section 8 or 9, shall be
punishable with imprisonment for a term which shall be not less than six months but which
may extend to five years and shall also be liable to fine. 
Also abetment of offences as defined in Section 7 or 11 shall be punishable with
imprisonment for a term which shall be not less than six months but which may extend to five
years and shall also be liable to fine. 
Moreover criminal misconduct of a public servant shall be punishable with imprisonment for
a term not less than one year but which may extend to 7 years and shall also be liable to fine.  
Most importantly, habitual committing of offences under Section 8, 9 and 12 shall be
punishable with imprisonment for a term not less than two years but which may extend to 7
years and shall also be liable to fine.
It is pertinent to note that where a sentence of fine is imposed under sec. 13(2) and sec. 14,
the court while fixing the amount for the same shall consider the amount or the value of the
property which the accused has obtained by committing the offence or where the conviction
is for an offence referred to in sec. 13(1) (e), the pecuniary resource or property for which the
accused is unable to account satisfactorily.
ACCUSED AS WITNESS

7
Any person charged with an offence punishable under this Act, shall be a competent witness
for the defence and may give evidence on oath in disproof of the charges made against him or
any person charged together with him at the same trial.

This provision has been made by the legislature to facilitate the accused in defending himself
against an allegation. There are number of conditions and restrictions prescribed for
application of this provision Therefore, the provision has to be exercised according to the will
of the accused keeping in mind that his interest is not adversely affected.

JUDICIAL INTERPRETATION OF PROVISIONS PREVENTION OF

CORRUPTION ACT, 1988

The Supreme Court of India through a catena of cases has interpreted the provisions of PCA
with due regard to the intention of the legislature while drafting The Act.

In Meet Singh v. State of Punjab3

The petitioner was convicted for having committed offences under section 161 I.P.C. and
Section 5(2) of PCA and was sentenced to suffer R.I. for one year on each count and on the
second count, also to pay a fine of Rs. 400/-or in default to suffer further R.I. for three
months by the learned Special Judge. Both the substantive sentences of imprisonment were
directed to run concurrently. In appeal the High Court, while maintaining the conviction,
reduced the substantive sentence of rigorous imprisonment for one year to the sentence
undergone till the date of the Judgment of the High Court and increased the fine to Rs.
4,000/-(Rupees four thousand) or in default to suffer further R.I. for one year. The High
Court, while so altering the sentence, took into consideration two facts, namely, (i) that the
petitioner was dismissed from service and (ii) that he is a family man. Dismissing the special
leave petition of the convict against his conviction, there being no appeal by State, the Court

Held: The language of the proviso to Section 5(2) of the Prevention of Corruption Act makes
it abundantly clear that court is under an obligation to impose a minimum punishment once
the conviction is recorded under Section 5(2) and the minimum punishment of imprisonment

3
1980 AIR 1141; 1980 SCR (2)1152; 1980 SCC (3) 291

8
is for a term not less than one year. Undoubtedly the proviso confers power on the Court to
award less than the minimum punishment if the Court convicting and sentencing the accused,
is of the opinion that for any special reasons which the Court is under an obligation to record
in writing, sentence of imprisonment for a term less than the minimum is called for.
Conceding that the quantum of sentence is in the discretion of the trial Court, where the
Legislature stepped in and circumscribed and fettered the discretion by directing imposing of
a minimum sentence, the court can exercise its discretion within the limited spheres left open
by legislature. The Legislature circumscribed the discretion by requiring the Court to impose
minimum sentence but left it open to award less than the minimum statutorily prescribed for
special reasons. The reasons have to be special reasons. The words 'special reasons' in the
context in which they are used could only mean special to the accused on whom sentence is
being imposed. The Court has to weigh reasons advanced in respect of each individual
accused whose case is taken up for awarding sentence. In the instant case, there was no
justification much less special reason statutorily required, for awarding less than the
minimum sentence. In strict sense court exceeded its jurisdiction while interfering with the
quantum of sentence.

In Jagdish Prasad v. West Bengal4

It was observed that the word "special" has to be understood in contradistinction to word
"general" or "ordinary". "Special" means distinguished by some unusual quality, out of the
ordinary. Again "special" means 'particular'; peculiar; different from others; designed for a
particular purpose, occasion, or person; limited in range; confined to a definite field of action.
Thus, anything which is common to a large class governed by the same statute cannot be said
to be special to each of them. And, "special reasons" in the context of sentencing process
must be special to the accused in the case or special to the facts and circumstances of the case
in which the sentence is being awarded.
Here, the only two reasons special according to the High Court for awarding less than the
minimum sentence are-
(i) Appellant before it has lost his job and
(ii) And he is a married man with children.

4
[1972] 2 S.C.R. p. 845 @851,

9
These two reasons would be common to ninety nine percent of cases tried under Prevention
of Corruption Act and if they can be styled as "special reasons" for awarding less than the
minimum sentence the proviso would be rendered wholly nugatory.
Observation: The Court should not be oblivious to the fact that while conferring discretion in
the matter of awarding adequate sentence within limits prescribed by the statute, the
Legislature finding cases of misplaced sympathy in sentencing process fettered the Court's
discretion by prescribing a minimum sentence and making it obligatory to record special
reasons for awarding less than the minimum. If still the notice of encroachments on court's
discretion is not taken, time may not be far when the Legislature out of exasperation may
resort to what it has done in Section 16 of Prevention of Food Adulteration Act where
minimum sentence is prescribed and Court's discretion to award less in any case is wholly
taken away.

Corruption is ablaze topic today. It is a termite that is eating up the pith of our society it not
only hampers the individual's growth but also the collective growth of our Country. Being
one of the greatest challenges before the humanity it lies at the root of several other problems
facing the humanity. Corruption can perhaps be described as the biggest factor responsible
for failure of legal and moral strand of the nations and societies the world over. It undermines
the freedom of an individual, threatens the very existence of the democratic institutions,
weakens the rights of the people, and jeopardises the safety and security of the state.
Development is conceivably the biggest victim of corruption, having suffered adversely due
to its ill-effects. The challenge of corruption must be confronted at any cost as a positive
outcome in the fight against corruption can have remarkable potential for development and
growth of the nation and the people thereby eliminating many of the problems facing them.
Consequently, it stands highly imperative to control and then stop this growing menace and
eventually the Prevention of Corruption Act, 1988 comes to our relieve. In fact, the Act has
been beautifully drafted; nevertheless, vast power has been vested in the hands of the Central
and State Government in form of appointment of Special Judges, providing sanctions etc.
Hence the Act might become oblivious if the matter in question is related to Central or State
Governments. The PCA regardless of this lacuna is a very dominant Act which needs proper
implementation in order to cut back corruption from its grass root-level.

REFERENCES

10
1. Bardhan: Corruption & Development, Journal of Economic Literature, September 1997
2. Corruption Perception Index, Transparency International, Berlin.

3. www.pucl.com.

4. http://indlaw.com/datastore/sdata/reportsandproceedings

5. The Prevention of Corruption Act 1988, Bare Act; Universal Law Publication.

Author- Anamika Ahir, 3rd yr NLIU, Bhopal

Email- anamika.law@gmail.com.

11