The POCA amendments: A clean sweep?

Ease of doing business, fearless decision-making by public officials, and harmonisation with international practices: recent amendments to India’s principal anti-corruption law, the Prevention of Corruption Act, appear far reaching, and attempt a tough juggling act between competing interests.

The recent Nirav Modi case may have struck fear among India’s banking community and led to a re-emergence of policy paralysis concerns. The Indian Parliament, meanwhile, appears to have acted swiftly to nip such concerns in the bud. The Lok Sabha passed the Prevention of Corruption (Amendment) Bill, 2018, on July 24. This paves the way for sweeping amendments to India’s principal anti-corruption law, the Prevention of Corruption Act, 1988 (‘POCA’).

Bribe giving

Previously, bribe givers could only have been prosecuted as an abettor under POCA, and not as the primary accused. The amendments signify a marked departure from this position, and as in the US, and UK, bribe giving is set to be an offence itself in India too. Both, individuals, and companies, may now be held liable for giving bribes. An available defence: that the bribe was given under compulsion, provided the bribe is further reported to law enforcement agencies within 7 days.

Time limits for trials

It may not be widely known, but POCA includes provisions for a speedy trial. The law mandates judges to hold trials on a day-to-day basis, as far as practicable. Of course, this may not have occurred in practice: trials continue for several years, and conviction rates are low. The amendments seek to influence on-ground change. Judges would now be required to conclude trials under POCA within 2 years, and while extensions may be made, their duration should not ordinarily exceed 4 years in aggregate.

Criminal misconduct

Another notable change introduced through the amendments is the redefinition of ‘criminal misconduct’. In this revised form, criminal misconduct may only cover such instances where a public servant, ‘dishonestly or fraudulently misappropriates or otherwise converts for his own use any property entrusted to him or any property under his control as a public servant or allows any other person to so’, or ‘if he intentionally enriches himself illicitly during the period of his office’.

Critics argue that this redefinition would exclude many indirect forms of corruption, especially those involving non-monetary benefits, and favours bestowed on relatives or third parties. As a result, unscrupulous actions by public servants may continue unabated, and significant corruption cases unlikely to emerge.

The defendants argue such fears are unfounded; their view: the inclusion of ‘any other person’ is wide enough to cover such cases, and that POCA’s ambit has actually been broadened after the amendments.

Sanctions

The amendments, which appear to have stoked the most controversy, concern sanctions. Police officers may now be compelled to seek prior sanction, even before commencing investigation against serving, and retired public servants. Such a requirement was previously absent under POCA. The intended objectives of such a move is unimpeachable: ringfence honest public officials in their discharge of official functions, avoid frivolous litigation, and prevent undue harassment. The unintended consequences perhaps not as much: they may potentially impede investigations, and lead to fewer convictions.

Further, given the lack of clarity in the amendments, it is not apparent whose sanctions would be required in practice. Would it be the Lokpal and state Lokayuktas, or alternate public officials? This remains a key pressure point, especially in lieu of the staggered implementation of the Lokpal and Lokayuktas Act, 2013. In either case, expect significant public debate to ensue in the coming months concerning these issues.

For the moment, the far-reaching amendments to POCA, in close tandem with the passage of the Fugitive Economic Offenders Bill, 2018, appear to have re-ignited the debate on anti- corruption reforms. At a broader level, these changes may represent a systematic shift in focus towards the pursuit of bribe givers, as against bribe recipients.

The article is authored by Sajai Singh, partner, J Sagar Associates. Views expressed are personal.