Amendments to the Prevention of Corruption Act: Attachment and Forfeiture

The 2018 amendments to the Prevention of Corruption Act [PC Act] promise to bring major changes to how corruption offences will be prosecuted in India. The previous posts discussed the creation of a new offence under Section 8 for giving bribes, reforms to corporate liability under the PC through a new Section 9, and major changes to how the regime prosecutes public servants. In this post, I take up the insertion of a new chapter to the PC Act, which will make it possible for law enforcement to target the unlawful gains allegedly made from corrupt conduct. Since this is the last post in this stock-taking exercise, some general observations follow the more specific discussion.

Attachment and Forfeiture: The Text and the 1944 Ordinance

The 2018 amendments have added Chapter IV-A to the PC Act titled "Attachment and Forfeiture of Property". The idea being that persons should not be allowed to profit from corrupt acts, making it necessary for law enforcement to have powers to recover all the tainted assets one procured through PC Act offences. The new Chapter IV-A contains only one provision, Section 18-A, which says:

Section 18-A.(1) Save as otherwise provided under the Prevention of Money Laundering Act, 2002, the provisions of the Criminal Law Amendment Ordinance, 1944 shall, as far as may be, apply to the attachment, administration of attached property and execution of order of attachment or confiscation of money or property procured by means of an offence under this Act. 

(2) For purposes of this Act, the provisions of the Criminal Law Amendment Ordinance, 1944 shall have effect, subject to the modification that the references to "District Judge" shall be construed as references to "Special Judge".

As this straightforward provision suggests, all that Section 18-A does is to apply the Criminal Law Amendment Ordinance, 1944 [1944 Ordinance] to "attachment, administration of attached property and execution of order of attachment or confiscation of money or property" which is the result of PC Act offences. So the procedure under the 1944 Ordinance will be used to govern how the government goes after fruits of corrupt acts. What is this 1944 Ordinance? It was part of a wave of anticorruption measures introduced by an irked British Raj at a time when black-marketing and petty corruption were rife during the times of World War II. It mainly sought to recover money / property that persons gained by cheating Her Majesty's government or misappropriating such property. These were not the only kinds of criminal conduct imagined, and a Schedule to the 1944 Ordinance states the offences to which the procedure applies. Since existing criminal procedures did not clearly envisage this kind of action, the colonial regime fashioned a new process to allow for this recovery. Due to some judicial gymnastics by the Indian Supreme Court [discussed previously on this Blog], a colonial Ordinance (not statute) remains valid in independent India and for several years was the main legal basis for any attempts by the Indian government to seize criminal gains.

The broad outlines of that process are as follows. The process is triggered by law enforcement filing an application, which can be filed even before any criminal case is filed in court [Section 3, 1944 Ordinance]. This is filed before a "District Judge", who has powers to attach the allegedly tainted assets, or an amount equal to the criminal gains made, in the manner prescribed under the Civil Procedure Code 1908 [Section 3, 1944 Ordinance]. The attachment order can be made without hearing the accused if the District Judge is convinced there is some merit in the allegations [Section 4, 1944 Ordinance]. But for such an interim order to be made absolute, a chance to be heard must be given, not only to the accused but to other persons interested in the property too [Section 5, 1944 Ordinance]. If the District Judge is convinced that the application was bogus, she can revoke the order, but if she doesn't then the order will continue to run [Section 5, 1944 Ordinance]. For attachment - a temporary arrangement - to result in transfer of property / money, a criminal case must be filed and end in a conviction [Sections 10 and 13, 1944 Ordinance].               

The Problems with Chapter IV-A

Should persons convicted of corruption be permitted to benefit from their corruptly obtained gains? Arguably not. But, that is only the start of the matter. In this part, I argue that Chapter IV-A is hardly free of problems. The procedure applies to money or property procured by means of an offence. But procured is not defined anywhere. How would it work for public servants? Would "procure" target only the immediate gains made by the corrupt public servant in the form of bribes, or could it apply to the offence of being found in possession of assets disproportionate to your salary? And what about private persons. If the government alleges I bribed my way to get a government license, would this provision enable a seizure of my entire business built on that basis? The choice of having "procure" in Section 18-A stems from the fact that it is part of the language under the 1944 Ordinance. Which brings me to the other, broader aspects of problems with Chapter IV-A. The first of these is a problem of sheer redundancy. As mentioned above, the 1944 Ordinance has a Schedule which details the different offences to which this procedure applies. Item 4-A of that Schedule states that the Ordinance already applied to cases under the PC Act. So what was the need for Section 18-A in the 2018 amendments? Frankly, I haven't the faintest idea. There is then the issue of perpetuating the 1944 Ordinance itself: a procedure that is, in fact, the subject of pending legal challenges before the Supreme Court. I find it difficult to accept that India's Parliament still cannot come up with a new statutory process on the subject and is forced to retain a colonial era ordinance, passed during an emergency, based on arguably tenuous judicial reasoning? 

What makes the decision to retain the 1944 Ordinance for PC Act cases all the more puzzling is the proliferation of attachment and forfeiture provisions across recent statutes. Successive governments have become more enchanted with having these powers to enforce laws. Today, similar provisions are part of the Narcotics, Drugs and Psychotropic Substances Act 1985, Prevention of Money Laundering Act 2002, Benami Transactions (Prohibition) Act 1988 (since 2016), Lokpal and Lokayuktas Act 2014, and most recently the Fugitive Economic Offenders Ordinance 2018. Multiplication of such laws means each statute creates a new authority that will hear such cases before which the concerned law enforcement agency must file a claim. This only adds to the confusion, since it is common for a criminal transaction to be prosecuted under different statutes. Why not streamline the entire process and let one authority blossom from that muck, to consider all cases where the government seeks attachment and forfeiture of allegedly criminal gains? Not only does it help reduce government expenditure in creating and staffing more tribunals and bodies, but it will also help reduce potential conflicts of jurisdiction, and of conflicting legal interpretations coming about. Of course, a single authority will make life a lot easier for the accused persons as well.

Conclusions and Summing Up: New Act, Old Problems

These four posts have managed to take stock of the various key features of the 2018 amendments to the PC Act. What does one make of the changes which will soon become law? Media outlets have broadly been discussing whether or not the bribe-giving offence makes sense, and whether the PC Act now stands diluted in respect of cases against public servants. I think those questions have been answered to some degree through the posts. The bribe-giving offence makes sense, but the benevolent exceptions carry far too many loopholes to be effectively implemented without judicial support. The provisions of the PC Act have certainly been diluted - supposedly to protect honest officers - and this dilution is not as serious if we look at the offences, but more so when we look at the new provisions on getting prior sanctions. In addition to these issues, I also discussed the new regime on corporate criminal liability, which I am surprised has not been the subject of greater attention in the media yet.

But all this is what the new statutory regime is going to be on paper. None of which redresses what is a bigger set of problems with anticorruption measures in India: shoddy enforcement. I have talked about this before on this Blog and I apologise for being repetitive, but at the end of the day all these changes will end up as little more than political brownie points unless serious consideration is given on improving enforcement of the law. Can we really expect major changes to the scene if India's main anticorruption agencies - the CBI and the ED - remain subservient to vested political interests? Can we imagine the government winning cases in court if prosecutors have minimal resources, are poorly paid, grossly overworked, and rarely continue with a case from start to finish? Bringing about those changes requires more than printing new copies of statutes. It requires considerable political effort to generate consensus and then invest serious resources in reforming the legal process. But this is effort that no government is willing to bear as it does not translate into guaranteed political gains. If the new PC Act regime continues to operate without any changes on that structural level, the new legislation will continue to be plagued by some very old problems.

Amendments to the Prevention of Corruption Act: Prosecuting Public Servants

The previous posts on this Blog discussed two new additions brought by the 2018 amendments to the Prevention of Corruption Act, 1988 [PC Act], namely a standalone offence punishing bribe givers, and a foundational change in how corporations can be prosecuted on corruption charges. In this post, I discuss changes made by the amendments that affect the traditional concern of Indian anticorruption legislation: prosecuting corrupt public servants.

The Existing Regime

Before moving on to the changes, it is worthwhile to spend a minute on the existing regime. The PC Act carried two main provisions to combat corruption: Sections 7 and 13. To avoid getting entangled in the technicalities, let's take a simpler version of how they worked, focusing only on the more important parts. There was Section 13(1)(e), which punished public servants caught in possession of assets disproportionate to their income. And then there was the muddling overlap between Sections 7 and 13(1)(d). The former targeted public servants accepting / obtaining anything beyond their salary (cash / property etc.) to do their job. Section 13(1)(d) only targeted them obtaining things, by corrupt means or abusing their position as a public official. The differences, then, were two: (i) according to several court decisions, Section 13(1)(d) needed a demand by public servants, and (ii) Section 13(1)(d) did not need the illegal transaction to revolve around performance of public functions. Totally different from this conundrum was the problem of Section 13(1)(d)(iii), which courts read as not requiring any demand or public function. It was seen as a strict liability offence, whose requirements were met as long as the public servant got any "valuable thing or pecuniary advantage" for another person without any public interest. 

2018 Amendments to Substantive Law: The Text

Very little of that existing regime has been left in place by the 2018 amendments. Section 13(1)(d)(iii) no longer exists. The rest of Section 13(1)(d) has been merged with Section 7 to form one composite offence. The new Section 13 only carries two offences - the erstwhile Sections 13(1)(c) and 13(1)(e). Since the bulk of changes are codified in the new Section 7, let's focus on that:

Section 7. Any public servant who, - 

(a) obtains or accepts or attempts to obtain from any person, an undue advantage, with the intention to perform or cause performance of any public duty improperly or dishonestly or to forbear or cause forbearance to perform such duty either by himself or by another public servant; or 

(b) [ditto], as a reward for the improper or dishonest performance of a public duty or for forbearing to perform such duty either by himself or by another public servant; or 

(c) performs or induces another perform to perform improperly or dishonestly a public duty or to forbear performance of such duty in anticipation of or in consequence of accepting an undue advantage from any person, 

shall be punishable, with imprisonment ... not less than three years but which may extend to seven years ... 

Explanation 1. - ... obtaining, accepting, or attempting to obtain an undue advantage shall itself constitute an offence even if the performance of a public duty by public servant, is not or has not been improper.

...

Explanation 2. - ... (i) the expressions "obtains" or "accepts" or "attempts to obtain" shall cover cases where a [public servant], obtains or accepts or attempts to obtain, any undue advantage for himself or for another person, by abusing his position as a public servant, or by using his personal influence over another public servant; or by any other corrupt or illegal means; ... 

I spoke earlier of overlaps between Sections 7 and 13(1)(d) in the PC Act. The legislature has chosen to resolve that issue by deleting half of Section 13(1)(d), and clubbing those parts with the scope of Section 7. This has been done through Explanation 2 to Section 7, which carries forward large chunks of the old Section 13(1)(d) PC Act. What, then, is the conduct prohibited by Section 7 after the amendments? It punishes three kinds of transactions between public servants and others involving an "undue advantage" changing hands / about to change hands:

• Section 7(a) requires that the exchange be accompanied by the public servant intending to perform / cause performance /forbear performance of a public duty either improperly or dishonestly, be it her duty or that of another public servant;      
• Section 7(b) requires that the exchange to be as reward for improper or dishonest performance / forbear performance of a public duty in the past by a public servant;
• Section 7(c) requires the improper or dishonest performance / forbearance of public duty, or inducing such conduct in another public servant, in anticipation or in consequence of accepting an undue advantage.

Substantive Amendments: Hits and Misses

The deletion of Section 13(1)(d)(iii) from the PC Act marks the end of a long saga of a fight between the bureaucracy and the government. Ever since 2010, when the Delhi High Court ruled that the offence did not require proof of any associated mental state, it became possible to prosecute public servants simply for making a bad decision. For instance, if an official in a Public Sector Bank grants a loan to X, who then defaults, technically the public servant obtained a valuable thing or pecuniary advantage for another person without any public interest. Although the Delhi High Court's decision incorporated safeguards against such a broad reading, the bureaucrats were not convinced, and had been lobbying for change. The 2018 amendments mark their victory.

Creating a broad corruption offence and reducing overlaps and resulting confusion between Sections 7 and 13(1)(d) is a good idea. But unfortunately, it suffers from poor execution, as the new Section 7 is still plagued by unnecessarily confusing text, as I illustrate below. 

• First, the confusion with 7(c). It targets two kinds of scenarios: (i) a public servant does her job dishonestly / improperly expecting to get an undue advantage for doing so, (ii) a public servant does her job dishonestly / improperly having accepted an undue advantage for doing so. Scenario (i) can easily be described as the public servant being rewarded for doing her job dishonestly / improperly - which is exactly what Section 7(b) targets. Scenario (ii) can be seen as a public servant intentionally accepting an undue advantage to do her job dishonestly / improperly - which is part of what Section 7(a) covers. Thus, arguably Section 7(c) is not really covering any extra ground. 
• Second, consider Explanation 1, which effectively says that the Section 7 offence is complete as long as a public servant gets an undue advantage, without a need for improper performance of duty. But we already knew this, since Section 7 uses the words improperly or dishonestly to describe the conduct of public servants. Why add an unnecessary explanation? 
• Lastly, consider Explanation 2(i), which makes explicit the links between the new Section 7 and the old Section 13(1)(d). Perhaps this is useful to make it clear to the police and courts that this offence also deals with what the old Section 13(1)(d) covered. But, this is simply not the case. Even though some language is carried forward, the old Section 13(1)(d) does not survive. I say this, because all that the old offence required was a public servant obtaining an undue advantage without any need to draw links between this transaction and the performance of a public duty. Basically, it criminalised a public servant extorting persons into giving bribes. But all three clauses in Section 7 hinge around the performance of a public duty, besides exchange of an undue advantage. Ultimately, Explanation 2(i) is unnecessary: since the means by which a public servant obtains the undue advantage are irrelevant for the offence, why talk about it?      

2018 Amendments to Procedural Law  

Section 19 of the PC Act creates a need for prior sanction to prosecute public servants on corruption charges; i.e., prior government approval before judicial proceedings can begin. This provision has a cousin in the general law on criminal procedure - Section 197 of the Criminal Procedure Code 1973 [Cr.P.C.]. There used to be two points of difference between these provisions. First, Section 19 PC Act only applied to active public servants, while Section 197 Cr.P.C. covered both active and retired public servants. Second, Section 19 PC Act applied in almost all cases under that law, while Section 197 Cr.P.C. applied to all kinds of cases, but only if the allegations concerned acts / omissions of the public servant in discharge / purported discharge of official duties [for a discussion of the judicial treatment of this test, see here]. The 2018 amendments to Section 19 PC Act have eliminated the first distinction; now sanction to prosecute cases under the PC Act will also apply to public servants employed "at the time of commission of the alleged offence". Section 19 PC Act will now also carry different rules on sanction in cases that are not instituted by law enforcement, giving public servants more opportunities to stop proceedings at the outset. While the amendments codify Supreme Court directions for a 3 month time-limit on sanction, there is no rule that failure to comply with that limit will result in sanction being deemed to have been granted.      

Far more significant than this expansion, though, is the insertion of Section 17-A into the PC Act. This provides that investigations regarding "any recommendation made or decision taken by [a] public servant in discharge of his official functions or duties" also need prior government sanction. Thus, police cannot even start corruption investigations without prior approval, a process that can take up to three months, although there is an exception for cases where a public servant is caught red-handed while obtaining / accepting an undue advantage [Provisos to Section 17-A]. Note, though, that while Section 17-A applies to PC Act offences, its structure is akin to Section 197 Cr.P.C. - prior sanction is needed only if allegations concern any recommendation / decision in discharge of official functions or duties. 

Section 17-A And Sanction: Old Wine in New Bottles

While prior sanction for investigations are not as common as prior sanction for prosecution, there is a legacy of laws protecting public servants against investigations too. The most famous being Section 6-A of the Delhi Special Police Establishment Act, 1946 [DSPE], which only shielded senior bureaucrats in cases pursued by the CBI, and was struck down as unconstitutional in 2014 primarily because of this selectivity in scope. In the years since, there have been selective attempts to revive that protection, most recently in the State of Rajasthan. Section 17-A marks a re-introduction of such protections at the federal level, this time without any rank-based logic. Though one suspects that it will be more common for this protections to be claimed in allegations against senior bureaucrats who occupy decision-making roles.

Are such protections for public servants legal? The Supreme Court considered the constitutionality of Section 197 Cr.P.C. in 1956, when one Matajog Dobey argued that this violated the equal protection clause of Article 14. Why, Dobey argued, should public servants not be taken to court like the rest of us? The Court disagreed, finding merit in the colonial logic that public servants needed this rule to protect them against vexatious litigation. As I mentioned above, the Supreme Court took up the issue of requiring prior sanctions for investigations in 2014 when it considered the legality of Section 6-A of the DSPE Act. But it did not rule that such protections from investigations were bad per se, and instead chose to tackle the arbitrariness of only protecting certain kinds of public servants and not the entire set. That is where the law stands today: public servants are certainly in a different class, but the extent of their privileges remains unsettled.

While discussing amendments passed by the State of Rajasthan in 2017 here, which introduced very similar rules for that state, I suggested that this temerity of the Supreme Court might render it difficult for any court to now turn around and say that requiring prior sanction for investigation, when applied to all public servants, is unconstitutional. In that post, I also described how, rather than condemn the idea of sanction outright, the judiciary used the "official duties" language in Section 197 Cr.P.C. to regulate what kinds of conduct could require prior sanction (An entire monograph can be dedicated to the unprincipled way in which it has done this). Since 1997, when the judiciary went beyond mere regulation to hold an earlier avatar of Section 6-A of the DSPE was unconstitutional, there has been a constant tussle between judiciary and executive. Courts would nullify protections from investigations, only for governments to reinstate it in new ways. Section 17-A appears to be the central government's response to the judicial nullification of Section 6-A of the DSPE Act. I suspect that the cyclical trend will send the ball back to the judiciary, as the legality of Section 17-A will certainly be challenged before the Supreme Court. Once and for all, the Court can then set the record straight and tell us what it thinks about laws shielding public servants from investigations, putting them truly in a class of their own above the rest of us plebeians.  

Conclusions and Next Post

As this post discussed, not only do the 2018 amendments to the PC Act introduce brand new areas to the law, they also make substantial changes to the core concern of Indian anticorruption legislation: the prosecution of corrupt public servants. By streamlining the substantive offences, the amendments have taken a step in the right direction. Sadly, these progressive steps suffer from familiar flaws in terms of poor legal drafting. But equally important, if not more, are the changes brought about to the law on requiring prior sanctions to prosecute public servants for corruption. Not only have existing shields against prosecutions been fortified, but an entirely new protection against investigations has been introduced. This provision cements just how big a shift has been made from the old regime: not only did is Section 13(1)(d)(iii) deleted from the PC Act, but conduct which was earlier a basis for prosecution is now the subject of additional protections through the amendments. Perhaps because of this, it is difficult to avoid a sense that the PC Act will now carry lesser bite while going after public servants. In the next and final post of this series, I will look at the addition of a forfeiture regime to the PC Act, an area where more bite has seemingly been added to the law. 

Amendments to the Prevention of Corruption Act: Corporate Criminality

The previous post discussed amendments to Section 8 of the Prevention of Corruption Act, 1988 [PC Act], which will now punish giving bribes as a standalone offence rather than a case of abetting bribe taking by the public servant. The post did not discuss one proviso that the amended Section 8(1) carries: providing that when an offence under Section 8 is committed by a "commercial organisation", it is punishable by fines. This is my gateway to discuss the new regime on corporate criminal liability that the PC Act will introduce, the fulcrum of which is amended Sections 9 and 10. This second post in the series focuses on what this new regime is, and its potential positives and pitfalls. 

Prosecuting Corporate Corruption: The New Text 

Before moving to the text, let's take a step back and cover some basics on the criminal liability of commercial organisations [called "corporation" hereafter]. Corporations are purely legal creatures, so to hold them criminally responsible we need to use the conduct and mental state of some humans. So far so good. But which humans are to be considered? Some jurisdictions, like the U.K., recognise a narrow basis for affixing liability to corporations. Commonly called the "alter-ego" or "directing-mind" theory, under this rule only the acts of humans in management roles or other decision-making capacities can be the basis for imputing liability to corporations. Contrary to this, other jurisdictions - most prominently the United States, adopt a much broader rule where the conduct of any employee can be imputed to a corporation, as long as this resulted in some benefit to the corporate entity.

When the Indian Supreme Court recognised criminal liability for corporations it chose to follow the U.K. model and adopted a narrow basis of liability. Because of this, corporate prosecutions in India needed allegations against management-level persons for the case against a corporation to stick. In what is a seismic shift, the legislature has marked a break away from this position for corruption offences in the recent amendments. India will now follow a model more akin to the U.S., potentially making it much easier to prosecute corporations. Let's turn to the text:

Section 9. (1) Where an offence under this Act has been committed by a commercial organisation, such organisation shall be punishable with fine, if any person associated with such commercial organisations gives or promises to give any undue advantage to a public servant intending -  

(a) to obtain or retain business for such commercial organisation; or 

(b) to obtain or retain an advantage in the conduct of business for such commercial organisation: 

Provided that it shall be a defence for the commercial organisation to prove that it had in place adequate procedures in compliance of such guidelines as may be prescribed to prevent persons associated with it from undertaking such conduct [to be created under Section 9(5) read with Section 29A].

Some further points of interest:

• While "an offence under this Act" indicates this regime applies to all offences under the PC Act, Section 9(2) clarifies that it is unnecessary for the human to be prosecuted under Section 8 for the Section 9(1) offence to stick against a corporation. 

• Section 9(3) explains various terms, such as "commercial organisation" [Section 9(3)(a)], "business" [Section 9(3)(b)], and "person associated ..." [Section 9(3)(c)].

• A person is "associated" with the corporation if she performs "services for on or behalf" of the corporation, which shall be determined by looking at all the relevant facts and not merely the nature of relationship between the two [Section 9(3)(c), Explanation 2]. 

• The "person associated" need not be an employee, and can equally be an "agent or subsidiary" of the corporation [Section 9(3)(c), Explanation 1]. 

• Lastly, if the "person associated" is an employee, it is presumed that she performed "services for or on behalf of" the corporation [Section 9(3)(c), Explanation 3].    

Before moving on, note that Section 9 is not the only relevant provision in context of corporate crime. Section 10 goes after management level officers after Section 9 cases are proved in court:

Section 10. Where an offence under Section 9 is committed by a commercial organisation, and such offence is proved in the court to have been committed with the consent or connivance of any director, manager, secretary or other officer ... such [person] shall be guilty of the offence and shall be liable to be proceeded against and shall be punishable with imprisonment for a term which shall not be less than three years but which may extend to seven years.

The Promises and Pitfalls of Reform
A directing-mind test can prove too limiting in a corporate context where decision-making authority is increasingly decentralised. Not only this, it also offers an easy escape hatch to avoid corporate liability by concentrating focus on a select corps of officers. Recognising both of these problems, many jurisdictions - even the U.K. - moved away from the rule in the corruption context. The 2010 U.K. Bribery Act carries a "Failure to Prevent Bribery" offence under Section 7, which seems to have inspired our legislature the most. More recently, Argentina and Malaysia both took radical steps to move away from a directing-mind approach for corruption cases, to impute corporate liability based on acts of any employee. In finally shedding the alter-ego in Section 9, the Indian statutory regime better reflects the realities of the modern corporate context and offers a potentially more robust tool to prevent and prosecute corporate corruption in the country.

The shift to a broader basis of liability carries a downside: law enforcement agencies get extremely powerful tools to regulate corporate conduct which can be misused. By making offences cognizable and empowering police to arrest "persons associated" with corporations, the problem becomes more stark. Naturally, then, we need some corresponding protections for corporations to protect against abuse and ensure a degree of fairness in legal enforcement. The global norm seems to be having protections for corporations that install adequate compliance procedures. The U.K., Argentinian, and Malaysian examples mentioned above all have such provisions. The new Indian amendments also provide corporations this kind of protection in the proviso to Section 9(1), as extracted above.

But there is a catch. Having a defence at a criminal trial is not a protection against prosecution, and the difference can be huge in the corporate context. Installing adequate compliance procedures is a cost, and the bigger the corporation, the higher that cost is bound to be. For the corporation to make these expenditures, it needs incentives to do so. Since potential prosecutions for management level personnel under Section 10 have been pegged to the corporate crime under Section 9, there is certainly some incentive to install adequate compliance regimes. But is that enough? I would argue that it isn't. Effectively, the law is telling corporations to spend the money, but that more money will still have to be spent in facing a criminal trial for years, where eventually it can plead innocence by pointing to compliance procedures.

Nobody, especially corporations whose reputation carries considerable financial value, want to go to court and have their name dragged through mud. Which is why globally, it is more common for the legal system to reward those corporations with adequate compliance regimes by helping them avoid prosecutions altogether. They do not get a get-out-of-jail-free card, mind you, and still end up having to cooperate with investigators, paying fines, and being monitored for a few years afterwards under Deferred Prosecution or Non Prosecution Agreements. In the United States, the Department of Justice has been issuing "Principles of Federal Prosecution for Business Organizations" that implement this regime. Similarly, in the U.K., the Crown Prosecution Service is instructed to not prosecute cases where it finds corporations met the Statutory Guidance. Within India itself, this idea of avoiding prosecutions exists in context of the Information Technology Act, 2000, which triggers legal action only if online platforms do not pull down objectionable content within 36 hours after a takedown notice or court order. Since the statutory rules on compliance under the PC Act are yet to be drafted, I expect the powerful corporate lobby in India will try and push for a regime which avoids prosecution altogether. In the event that comes to pass, it will be fascinating to see what follows: will India start seeing innovations of the kinds seen in the U.S., or will corporations be getting a clean chit. 

The Big Lapse on Sentencing Reform

At the end of the day, what matters most is the eventual punishment. What happens to corporations if they are found guilty of paying bribes? Do they fear hefty penalties, or a situation like the infamous case of Arthur Andersen in the United States - the accounting firm that went bust facing criminal charges? Not really. The new amendments to the PC Act leave untouched the sentencing formula of the earlier system, where penal provisions only provide for a "fine" to be imposed on corporations. This is not statutorily linked to wrongful advantage gained by the paying bribes, nor is there any clear authority to revoke corporate licenses or impose curbs on business activities if the corporation is found guilty (such powers seem to exist for charitable organisations). Sentencing will remain entirely dependent on the judges' discretion. From my limited experience of seeing corruption trials with corporate defendants, I saw three scenarios most commonly play out: judges either levied no separate fine on corporations, imposed the same fine as the human defendant, or simply doubled the amount of fines imposed. In all of these, often no explanation was offered for how the amounts were fixed. 

This is where the tendency to ape foreign legislation can become problematic. Yes, Section 7 of the U.K. Bribery Act also only stipulates a fine to be imposed. But the U.K. has an entirely different sentencing regime to that of India. Not only are courts mandated to explain their reasons for awarding the sentence, but the Sentencing Council issues Guidelines for courts to follow in figuring out how to arrive at that sentence as well. In 2014, the Council published Guidelines for Fraud, Bribery and Money Laundering Offences that requires courts to consider ten different factors to fix a sentence for Section 7 offences, in which removing all gains from corruption is almost a pre-requisite. 

By retaining the old system, the amendments have seriously missed out an opportunity of ushering in much-needed reforms. It means that the significant deterrent and regulatory force that anti-corruption legislation carries ends up lost on other bad actors in the field, undermining one of the main reasons for creating corporate criminal liability in the first place. Thus, despite having a broader scope for corporate liability, it might remain worryingly common that corporations brush off corruption charges and continue to engage in illegal acts.

Conclusions and Next Post

The PC Act amendments have ushered in a new regime for holding corporations criminally liable for engaging in corruption offences, one which theoretically renders it easier to prosecute corporations than before. Having moved to this legal theory in the corruption context, one wonders whether the Indian legal system will witness an en masse shift abandoning the old alter-ego theory altogether. As discussed in the post, once the amendments come into force, there is probably going to be immense lobbying as corporates try to create rules that gives them more benefits than merely a legal defence at trial after making costly outlays for installing a compliance regime to check bribery. In the long run, it might also result in disrupting how India regulators prosecute corporate bribery, encouraging more conversations between regulators and corporate defendants to keep a case away from court. Having now discussed two of the major new avenues explored by the PC Act, the next post returns to more familiar terrain for the law and discusses changes made by the 2018 amendments to prosecuting public servants for corruption.

Amendments to the Prevention of Corruption Act: Punishing Bribe Givers

In what might just be the biggest statutory shake-up since the Prevention of Corruption Act, 1988 [PC Act] came on the statute books, the Prevention of Corruption (Amendment) Bill 2018 was passed by the Rajya Sabha on July 19, and the Lok Sabha on July 24. That means it will become law unless the extremely  rare event of a President withholding assent occurs. News reports have posted bulletins, and some are ready with explainers as well, but there is naturally a lot that is left out by the media. In this multiple-part series, I take stock of what is likely to become the new regime for the regulation and prosecution of corruption offences in India. In this post, I take up the new Section 8 that punishes private persons for giving bribes.  

Punishing Bribe Givers: The Text

Many people subscribed to popular news outlets would have seen messages carrying the update about the amendments with punishment of bribe givers being the headline. There is good reason for this excitement: the existing mechanism under the PC Act did not create an offence of "bribe giving", and such conduct could only be indirectly punished. This was done through Section 12 of the PC Act, by alleging the private person aided or abetted the misconduct by the public servant. The only other kind of bribe giving punishable was under Section 8 which targeted the middleman acting as the conduit between the private person seeking the benefit, and the public servant amenable to corruption.

Not anymore. The recent amendments to the PC Act change Section 8, which will look like this:

Section 8: 

(1) Any person who gives or promises to give an undue advantage to another person or persons with intention - 

(i) to induce a public servant to perform improperly a public duty; or 

(ii) to reward such public servant for the improper performance of public duty; 

shall be punishable for a term which may extend to seven years ...

Provided that ... this section shall not apply where a person is compelled to give such undue advantage ... [and] shall report the matter to [law enforcement] within seven days from the date of giving such undue advantage. 

...

(2) Nothing in sub-section (1) shall apply to a person, if that person, after informing a law enforcement authority or investigating agency, gives or promises to give any undue advantage to another person ... to assist [law enforcement] in its investigation against the latter.

Section 8 also has an Explanation that says: (i) it doesn't matter if the bribe is given / promised to the person who is to perform / has performed the corrupt acts, and (ii) it doesn't matter if X gives / promises the bribes directly or through a third party. 

Understanding the Bribe Giving Offence

Let's break Section 8 up to see the conduct it seeks to prohibit, and the mental state it requires to be linked to that conduct for it to be labelled criminal. Section 8 punishes giving / promising to give an "undue advantage" to induce / reward a public servant to "perform improperly a public duty". Putting it crudely, Section 8 covers the giving / promising of bribes as inducement / rewards for corrupt acts by public servants. The giving / promising need not be done directly, as explained by the provision. It must be made to another person, and while this can certainly be the targeted public servant, it can be any other person as well.    

This conduct must be performed intentionally for it to be punished under Section 8. It means nothing short of the clearest case ought to go through, since intention is the highest standard for mental state in criminal law. One imagines the prosecution will need to show (i) a clear offer / promise / giving of a bribe, (ii) a link between X (private person) and Z (corrupt public servant), and (iii) some evidence of the particular corrupt act that X wants from Z / Z has committed. This is what the Illustration to Section 8 also suggests (not reproduced above): it says P (private person) is guilty of the offence where she gives S (public servant) a sum of Rs.10,000 to ensure P is granted a license over all other bidders. Note, though, that the text itself does not require that S must get whatever is given by P to "another person" for getting S to ensure the license is approved.

As important as the offence itself is the Proviso to Section 8(1) that carves out an important exception to protect persons who are "compelled" to give bribes. This is an acknowledgment of existing social realities where public servants exploit their position to demand undue favours for performing their duties. To trigger the benefit of the Proviso, the victim must go and file a report with the concerned authorities within a week. Another important exception to Section 8 is codified in the second Proviso, which protects the long-standing use of "entrapment" (called trap cases in the field) as a technique to nab corrupt public servants. So, persons who conduct a sting operation to assist investigations cannot be prosecuted either.   

Potential Problems
Few would argue that bribe giving should not be punished. But, it is worthwhile to ask ourselves how will the police catch bribe givers? Bribery is a covert transaction: I am not going to tell everyone that I bribed a public servant, which means either (a) the public servant goes to the police, or (b) other aggrieved persons go file complaints. Let's take both scenarios. If the idea is for public servants to report bribes, they also need protection from prosecution. But while there is an exception to protect a cooperating bribe giver, there is no exception for cooperating bribe takers in the new law.

Perhaps the legislature thought - as many others might - that public servants are going to be an unlikely source of information and there is no need for an outright exception. The most likely source of initiating legal action is then the persons who suffer from corruption. Go back to the illustration, when P is awarded a license by S who was bribed. Many other bidders will be aggrieved on losing out, and it could be assumed that someone asks the police to investigate. There is an obvious problem but: in what is labelled a corrupt system, some aggrieved bidders will always smell foul play when they lose out, possibly giving rise to as many false cases as genuine ones. It is then incumbent on police to make sure that false cases are not carried through - not the kind of reassurance one wants in India where police distrust runs high.       

The problems continue when we consider the benevolent protection for oppressed bribe givers. Let's begin with the seven day reporting limit: What if police arrests a person for giving bribes before she files a complaint? Will it mean that no arrests for Section 8(1) offences can happen within seven days to avoid this scenario? Or will it mean, perhaps, that police will now find it easy to compel persons to cooperate in making cases against public servants by turning bribe givers into cooperators? Then there is the reporting itself. While the proviso calls for reporting the incident, it says nothing about what happens thereafter. How will police decide whom to believe in a potential swearing match between two purported victims - the allegedly oppressed bribe giver or the vexatiously prosecuted public servant? Will the alleged victims be required to make a statement on oath before a Magistrate, or file an affidavit?

And, finally, how to interpret "compelled", to identify when a person was compelled to pay bribes? There is no explanation in the proposed amendments, which means we must look elsewhere. The most famous interpretation of compulsion in India came from the Supreme Court in context of Article 20(3) of the Constitution, which says that "no person accused of an offence shall be compelled to be a witness against himself". There, in Kathi Kalu Oghad [1962 SCR (3) 10] a bench of Eleven Justices held compulsion meant physical duress: i.e., you needed objective physical acts to prove that you were forced to testify against your will. I imagine that this will not be the standard applied in context of the PC Act. But how broad a meaning of "compelled" will be appropriate, and what consequences might it have on the earlier interpretation arrived at in the context of Article 20(3) itself?

Conclusion and Next Post
The amended Section 8 of the PC Act creates a new offence that potentially opens a veritable flood of prosecutions in a country seemingly plagued by corruption.  The offence itself has been designed in a way to make prosecutions tougher though, as it requires proof that a person gave / promised an undue advantage intending it to be an inducement / reward for corrupt acts. The offence also carries a much-needed exception to protect against the unfair prosecution of persons who are victims of corruption. All of this will translate into several issues when the law comes into force, some of which I identified and discussed above. The few questions I raised confirm the beliefs that the new Section 8 is bound to be the site of significant litigation in the months and years to come. Another reason for that is the last proviso to Section 8(1), that was not reproduced in this post. This is not in the nature of an exception, but provides that commercial bodies can also be prosecuted for giving bribes, and will be the subject of the next post which will also take us to the amended Section 9.

(this post was updated on July 26, 2018, at 9:20 AM)

The Rajasthan Ordinance, and Seeking Sanction to Prosecute and Investigate Public Servants in India

In September 2017, the Rajasthan government issued an ordinance that sought to (i) make it necessary for investigating authorities to first get sanction from the government before pursuing allegations against a public servant, giving the government up to six months to consider, and (ii) bar any person from disclosing any details about the concerned official until this permission had been granted. The Government has since moved a bill in the legislature to make the law permanent, while the ordinance itself has been challenged before the Rajasthan High Court which is yet to decide the case. News media has seen few supporters barring a Junior Law Minister in the Union government supposedly considers the ordinance 'perfect and balanced'. Most others are challenging it for stifling investigations and illegally curbing the constitutionally protected freedom of speech.  

Are there any merits to, if not all, then some parts, of the Ordinance? Might we see more such ordinances across states in the near future if Rajasthan's version passes judicial muster? I have been thinking about these questions, and here, I try and understand them through this post. Understanding needs context, which is often absent from discussions of sanction in India. This post begins with a brief historical introduction to the 'sanction to prosecute', flagging the recent constitutional problems surrounding the concept. I then try and suggest that the Rajasthan ordinance is the logical aftermath of the judicial treatment of sanction. This means, unfortunately, that this is a rather long post. I hope it isn't long and pointless.

The Imperial Lineage of Sanction to Prosecute

Most legal systems recognise the right of an individual to pursue legal remedies when her rights are violated. If you beat me up, I have the right to pursue a case in court against you. In India, this can happen by either approaching the police who might take the case to court after investigation, or by going to court yourself. Now, it is easy to imagine the possibility of this (or any) right being abused - I might bring a false case to harass my opponent. We address this through preventing or punishing such conduct. The idea of seeking permissions to bring lawsuits fits in the former, which is basically what seeking 'sanction to prosecute' is. An administrative superior acts as a filter to ensure frivolous cases are not brought in court against public officials. The Criminal Procedure Code 1973 [Cr.P.C.] carries this filter in Section 197, which requires prior sanction to 'prosecute' (this is important) public servants (both serving and retired ones) only when allegations concern things they did actually in the course of duty, or purporting to be so.      

But why public officials, you might ask. An educated guess is India's colonial context informed this decision to protect those associated with government. The colonial regime introduced sanction in its first comprehensive criminal procedure code of 1861 [Section 167, at page 186 of the link], and kept it in the 1872 Code [Section 466, at page 509]. The modern version of this which I referred to above came in the 1898 Code [also Section 197, at page 141]. Broad protections shielded those working for the government who, to put it mildly, did not hesitate to step beyond the bounds of law while discharging their duties. A harsh terrain mandated harsh methods, and to allow prosecutions would stifle the governance project (opening for potential historical research examining if native and British persons were treated differently when it came to granting sanction!). Though speculative, I think this idea fits better than the arguments floated in London to defend similar restrictions to prosecute (the link is for debates in 1934, but the law remained the same even before). English law focused more on the nature of the offence rather than the offender - sedition, corruption and other potentially sensitive allegations could only be pursued with the Attorney General's consent, while the Indian version focused on the identity of the defendant and covered every person under the pay of the government. 

Over time it seems this justification changes, as seen from debates in the House on the Government of India Act 1935, which gave constitutional bases to protections for public servants from suits and prosecutions [Sections 270-71, at page 105. Fascinating, showing the crown was concerned about soon-to-be-elected local governments possibly changing the law on this front]. The legislature spent more time discussing civil suits, but the debates are useful for the criminal prosecution issue nonetheless. Mr. Thorp (column 54) spoke of how it was 'introducing a dangerous principle'  to India and could hurt genuine cases, while the Duchess of Atholl (column 55) spoke of apprehensions that the clause 'falls short of what civil servants feel to be necessary'. This largely mirrors the divide that we see today. Bureaucrats consider it necessary to have these protections to perform their duties while aggrieved persons consider them as impediments of entitlement. 

Independent India and the Opportunity Doctrine 

What became of the requirement of sanction in independent India? Well, it was quickly subjected to a constitutional challenge. In Matajog Dobey [AIR 1956 SC 44] the petitioner argued that Section 197 violated the equal protection clause by giving public servants protections from legal proceedings that others did not have. The Court swatted this aside by holding that public officials 'have to be protected from harassment in the discharge of official duties' while ordinary citizens did not. The vast category of public servants under the pay of the government - both union and state - was thus recognised as a class separate from all others, a distinction that has not been displaced. 

This did not mean the judiciary was not concerned with the debates that I highlighted above. In fact, the concern was palpable. High Courts before independence, and later the Supreme Court too, were acutely aware of the tightrope being tread - read the requirement too narrowly and you render the protection illusory, but read it to cover everything a public servant does and you make accountability a mirage. The judicial device created to navigate this problem was what I will call the 'Opportunity Doctrine' - if public office merely gave an opportunity to commit crime, then there was no need to get sanction. But where the alleged criminal acts were inseparable from the office and were 'integrally connected' to official duty, sanction was a must. So, if a public official misuses the privileges of office (goes on a joyride with government sponsored fuel) then prosecuting that offence should not require sanction. But if a municipal authority colludes with one real-estate developer to allot land at cheap rates, then we may need prior sanction to prosecute.          

The malleability of the Opportunity Doctrine should not go unnoticed - beyond the obvious cases it left a huge middle ground to be navigated with little more than gut instinct. For instance - what about the bank official who pilfers funds for his own use? Did his job merely grant an opportunity, or was it integral to the crime? The judicial grappling with sanction had a significant impact on the text itself. For starters, the test ignored that Section 197 never required an integral connection with duty: it's needs were met even if the acts were purportedly in discharge of duty. Since sanction was a tool to filter cases at the outset, it naturally required this broad scope. Considering whether sanction was needed in post-conviction review (appeals) by courts slowly dislocated it from its preventive roots. After all, how willing would a judge be to reverse a conviction arrived at after a lengthy trial on the technicality of there being no sanction to prosecute an official? This version undoubtedly tapers over the cracks but it would be difficult to argue that the broad shifts are not as I suggest.  

The Intra-Branch Dialogue and Sanctions to Investigate 

Thus we see how courts assumed control of the sanction to prosecute after having refused to strike it down as unconstitutional. Did this happen in a vacuum? Or did the legislature and executive - consisting several public servants protected by sanction - react? They did, and pretty quickly. In 1969 the government passed directions to the Central Bureau of Investigation that prevented it from starting any investigations against high-ranking public servants before getting permission. This was the 'Single Directive'. The thinking is clear - courts are applying a hindsight test which does not filter well, so lets go further back in time and filter at the institution of criminal cases. While doing this, the government impliedly admitted that the sanction protections are too broad to justify the rationale of their protecting public decision-making. Of course decision-makers must be treated differently from the ordinary rank-and-file bureaucrats, and so the latter would not be granted these protections.    

The Supreme Court did not agree that the public servants could be segregated like this. When the Supreme Court held this arrangement illegal, the government responded by re-introducing it almost immediately. When the Court slapped on the government's knuckles it retreated and withdrew the proposed change. But in 2003, it went ahead and amended the law to give it firm footing. While India's major political parties often don't look eye to eye, these moves were made both by the Congress and BJP led governments, showing a fairly clear indication of legislative will. What happens next? This statutory provision [Section 6-A of the Delhi Special Police Establishment Act 1946] was also struck down as invalid by the Court in 2014. On both occasions when the court struck down this protection, it did not overturn the Matajog decision to find sanction requirements were bad for creating an invidious classification between persons. Instead, the Court held that protecting only a class of bureaucrats was bad. How do you read this? Is the Court saying sanction should be limited to instituting prosecutions as done in the CrPC? Or is it saying that some public servants are not more equal than others, but all public servants are more equal than the rest of us. The second is a fair reading, and it was something the Court had agreed to in MK Aiyappa while handling sanction requirements under the Prevention of Corruption Act 1988 (a blistering commentary on the case can be read here). If the court reads the law this way, does it come as a surprise that others, such as the Rajasthan and Maharashtra governments, are doing the same? 

Past, Present, but what of the Future?

Maybe it is just me, but I can't help but notice patterns in how the law on sanctions to prosecute has been developing over time. There is a constant back and forth between the court and government - the court restricts its scope, the government expands it again. All of this was happening within the bounds of the constitution until the Supreme Court upped the ante and held the Single Directive to be unconstitutional in 1998. The government had been running the initiative for nearly thirty years to ensure lax sanction rules did not affect decision-makers, and the Court decided it didn't matter in the language which it could use - the Constitution. Was it inopportune? Perhaps. If the Court had a problem with having a sanction requirement then it should have said it outright. If it didn't, then there were better methods of dealing with the situation than refusing to acknowledge the few merits in the Single Directive scheme and starting a power tussle with the government. Today, because of how the Court avoided the forest for the trees, I think it will be hard for the Rajasthan High Court to hold that needing permission to start an investigation against public servants is unconstitutional. That might just convince the remaining BJP led states to pass similar laws, eventually bringing us back to the Supreme Court. Might the Court finally reconsider its position on all public servants being a separate class from the public?  

Prosecuting Public Officials for their Mistakes

(This post first appeared on the Global Anticorruption Blog and has been cross-posted with permission)

In July 2011, Yingluck Shinawatra became Prime Minister of Thailand after her party (founded by her brother, former Prime Minister Thaksin Shinawatra) won a decisive electoral victory. One of her principal campaign promises was to establish a program to purchase rice from farmers at above-market prices then store the rice to reduce supply. The hope was that doing so would increase world prices—because of Thailand’s position as the leading global rice exporter—ultimately allowing the government to sell at a profit. Shortly after the election, Yingluck’s government implemented this program, and it worked well for a few months—until other global players increased their supply of rice, causing Thailand to lose billions of dollars in the process. This economic debacle was entirely predictable—and indeed was predicted by many experts. And the program itself was beset by allegations of fraud and corruption in its implementation.

But should the failure of the rice-buying program be the basis of a criminal charge of corruption and a prison sentence against Yingluck herself, in the absence of evidence that she was directly involved in any embezzlement, bribery, or other more conventional forms of graft? Section 157 of Thailand’s Penal Code allows for just such a prosecution, as this section makes it a crime for a public official to either dishonestly or “wrongfully discharge or omit to discharge a duty so as to expose any person to injury.” And last month, the Thai Supreme Court found Yingluck (out of power since she was deposed by a military coup in 2014) guilty and sentenced her to five years in prison. She fled the country before the verdict.

Thailand is not alone in adopting anticorruption laws that criminalize not only dishonest conduct (bribery, embezzlement, conflict of interest, etc.), but also negligence or incompetence. When India updated its anticorruption law in 1988, it added a new provision that makes it a criminal offense for a public official to “obtain for any person any valuable thing or pecuniary advantage without any public interest.” This broad offense was interpreted by a state High Court to not require any proof of dishonesty or criminal intent, and the Central Bureau of Investigation (India’s premier anticorruption agency) has routinely employed the provision in grand corruption cases to avoid the problem of having to prove corrupt intent. In perhaps the most high-profile such prosecution, the agency went after an ex-Prime Minister, Dr. Manmohan Singh. Dr. Singh was the Minister of Coal at a time when the Government decided to liberalize allocation of coal-blocks and to sell mining rights to private parties. In 2014, the Comptroller and Auditor General’s office reported the policy had caused losses worth billions of dollars because the rights had been sold for too little, through a process that was too ad hoc to be considered legal. Dr. Singh was subsequently charged under India’s broad law, though his trial has currently been stayed while his challenge to the constitutionality the law is pending before India’s Supreme Court. (There are clearly concerns in other quarters about the breadth of this statute: In 2016 a Select Committee of the Upper House of India’s Parliament submitted a report that suggested India eliminate this offense. Parliament hasn’t yet acted on this recommendation, but there are signs that it has some support.)

Is it appropriate to enact broad anticorruption laws that allow government officials to be convicted for dereliction of duty, acting in a manner contrary to the public interest, and the like? Anticorruption activists and prosecutors may find such statutes appealing: It is easier to secure convictions of elected officials who are suspected of corruption, but where it is too difficult to prove the specific intent necessary for traditional corruption offenses. But in fact these broad laws are likely to do more harm than good, and countries like Thailand and India would be better off without them. There are three main reasons for this:

• First, criminal prosecutions carry immense expressive value and signal to society that certain acts ought to be condemned. The message sent to society, when a court convicts a senior official for a policy failure absent any showing of dishonesty, is not likely to be that the government will not tolerate corruption, but rather that prosecutors and judges have broad power to jail leaders that they don’t like. This is only worsened by the inherently subjective nature of the crime in question. These prosecutions also blur the lines between genuinely dishonest conduct and policy mistakes, undermining the special condemnation that ought to be reserved for the former. On balance, even if prosecutions for dereliction of duty might enable prosecutors to convict leaders suspected of actual but unprovable graft, in the long term such prosecutions will only worsen the respect for rule of law in societies troubled by corruption in governance.
• Second, and connected to the first point, such broad offenses raise the very real risk of politically motivated prosecutions. In countries where voters are angry about corruption, politicians often stress increased anticorruption prosecutions to show their commitment to reform. What better way to show such commitment then by attacking the alleged corruption of the previous regime? And this is much easier to do when the prosecutors (influenced by the new government) need not actually prove dishonesty, but need only find some alleged failure to fulfill a duty, or some act not in the “public interest.” Not only are partisan witch-hunts contrary to the rule of law, they also don’t always make for sound cases, and can ultimately dilute both the strength of using the courts as an anticorruption force and the faith of the public in the integrity of the institutions of justice.
• Third, broad anticorruption laws that effectively criminalize negligence are likely to have an undesirable chilling effect on decision-making by public officials. When elected officials take bold moves they already run a risk of alienating their electorate and losing a re-election. Add to that the specter of eventual criminal liability once they’re out of office, and it officials are likely to become too timid to try anything even slightly bold or controversial. This fear of risk trickles down to any official tasked with implementing government policy.

To be sure, elected officials owe a duty to the citizenry to act in the public interest. If they fail to do so, and the failure can be proven to be due to dishonesty or greed, then more narrowly-drawn laws against bribery, embezzlement, and conflict of interest would apply. For serious errors that are made in good faith – or even in those cases where there’s suspicion of wrongdoing but it can’t be proved – there’s an alternative remedy already in place: elections. The political process is of course imperfect. Many Thais were likely frustrated that Yingluck didn’t seem to pay a serious political cost for the failure of the rice-buying scheme, and may have been relieved both by the coup that removed her from power and by her eventual conviction for dereliction of duty. But in the long term, the democratic process offers a better safeguard than allowing for politicians to be sent to jail for mistakes.

Exclusion of Jurisdiction and the decision in Girish Kumar Suneja

On 13 July 2017, a three-judges bench of the Supreme Court dismissed the petitions clubbed together with Girish Kumar Suneja v. CBI [SLP (Crl.) 9503 of 2016, hereafter Suneja]. The preliminary issue raised in these petitions was a challenge to the Supreme Court's order dated 25.07.2014, whereby aggrieved persons were confined to only approaching the Supreme Court with a "prayer for stay or impeding the progress in the investigation / trial", and jurisdiction of High Courts was thus excluded. This Blog, on an earlier occasion, had considered the Petitioners' case and argued that the impugned order of 25.07.2014 was bad, and readers may refer to that post for a recap. Here, I argue that the decision in Suneja does not offer any convincing justification for why the Court disagreed.

Excluding Jurisdiction: Missing the Forest for the Trees

In Suneja, the Court takes up three key arguments assailing the exclusion of jurisdiction caused by the order of 25.07.2014 and its effects - (1) Curtailment of the High Court's power to entertain petitions under Sections 397 and 482 Cr.P.C; (2) Exclusion of writ jurisdiction under Articles 226 and 227 of the Constitution; and (3) A violation of Article 14 caused by treating the 'coal-block allocation scam' cases under this special procedure. On all three counts, it disagreed with the Petitioners' claims. On closer examination, one can see how the Court does so not by engaging with the argument, but by avoiding it altogether.

Sections 397 and 482 Cr.P.C.

On the first issue of curtailing statutory powers of entertaining revision petitions [Section 397 Cr.P.C.] and quashing petitions [Section 482 Cr.P.C.], the Court reminds us that these are not rights, such as appeals, but entitlements. A High Court may refuse to entertain these petitions. This characterisation was never in doubt - the issue, was whether it was unconstitutional to deprive the High Court of even this ability to entertain such petitions. For this, the Court turns to the legislative history of Section 397(2) Cr.P.C. [which prevents revision petitions for challenging interlocutory orders] to elaborate that the scope of revision jurisdiction was restricted to prevent delay. But the Court does not conclude that the present petitions fall within this category, which renders these observations obiter. Perhaps proceeding with that assumption, the Court moves on to consider the scope of inherent jurisdiction under Section 482 Cr.P.C. Again, it talks of a 'rarest of rare' level for quashing petitions being entertained, implying that the issue must be very serious to warrant intervention. Still, no answers are offered to explain what warrants an exclusion of this jurisdiction altogether. One may then assume that the Court implies the exclusion was illegal, which is why it considers the tests for considering whether the present cases could have triggered an exercise of jurisdiction under these provisions. 

In doing so, the Court makes notable errors in law. For instance, in considering the interplay between revision and quashing the Court notes that "it is quite clear that the prohibition in Section 397 Cr.P.C. [of not proceeding against interlocutory orders] will govern Section 482 Cr.P.C. We endorse this view." This means that for Court, Section 397 applies to all final and intermediate orders, while Section 482 applies to interlocutory orders. Such a reading ignores the notwithstanding that comes at the start of Section 482, which has led the Supreme Court to conclude on several occasions that the scope of Section 482 remains untrammelled by the terms of Section 397 - most recently clarified by another bench of three judges in Prabhu Chawla [Crl. Appeal No. 844 of 2016, decided on 05.09.2016]. Remember, all this is irrelevant, because the present cases actually involved a question of why recourse to this jurisdiction could be barred. The Court only engages with that issue in its terse refusal to consider the decision in Antulay [(1988) 2 SCC 602]. Antulay was a decision by seven judges, but it is distinguished because the facts were different and it involved a trial before the High Court itself, and the impugned provision therein - Section 9 of the Criminal Law Amendment Act 1952 - in turn used the 1898 Cr.P.C. The facts, though different, led the seven judges in Antulay to consider why any court's jurisdiction could not be ousted, which would nonetheless be relevant here. That the bench in Suneja even raises the second point about the Cr.P.C. is simply shocking, since the allegations in Antulay concerned a period after 1973 and by which time the 1952 Act was being read with the new Cr.P.C. [as required by Section 8 of the General Clauses Act 1897].  

We are then left without any answers for the actual issue. For some reason the Court continues to miss the forest for the trees, and refuses to tell us why recourse to revision and quashing was made impermissible in the present batch of cases. It painfully continues to develop on the obiter by considering whether the batch of petitions met the standard of seriousness for interference under Section 482 Cr.P.C., and concludes that "challenge to orders of this non-substantive nature that can be agitated in a regular appeal is nothing but an abuse of the process of the Court." The observation is entirely misplaced. The Petitioners raised issues of law, arguing that certain findings suffer from impropriety - express grounds for interference under Section 397. But if recourse to that provision is barred, then what? Should recourse to Section 482 still remain impermissible? The Court ignores the peculiarity in the present set of facts, which have come about by its own hand. 

Article 226 and 227 of the Constitution

The conclusions on Article 226 and 227 also proceed on an assumption that the issues raised in the batch of petitions are 'trifling' and therefore would not warrant interference under writ jurisdiction. With due apologies for sounding repetitive, the bench again fails to explain how this jurisdiction can be ousted entirely. In fact, here, the bench expressly says "there can be no doubt that the jurisdiction of a High Court under Articles 226 and 227 cannot be curtailed, yet extraordinary situations may arise where it may be advisable for a High Court to decline to interfere." This volte-face is completed at the end of this part of the decision, where the bench says that "there is nothing extraordinary if the High Court ought not to interfere and leave it to this Court to take a decision in the matter in larger public interest". But this is not what has happened in the present case! In unequivocal terms, the High Court was barred from entertaining petitions. The Supreme Court is now attempting to portray the scenario as a willing refusal by High Court's to entertain cases, when it is actually an exclusion of jurisdiction by the Supreme Court itself. It is fair to say that nobody is fooled. 

Article 14 and Judicial Legislation

The argument under Article 14 in Suneja was twofold - the 'coal block' cases do not constitute an identifiable class, and even if they do this differentiation must be created through statute. The Court, expectedly, whips up the rhetoric to justify why the cases are an identifiable class in themselves. But the decision does not engage at all with the more pressing issue of how such classes can be created. It says that "the order passed by this Court does not amount to legislation in the classical mould but according special treatment to a class of cases for good and clear reason and in larger public interest as well as in the interest of the accused." There are obvious legal issues in judicially created classes for perpetrating discrimination. Judicial orders are imprecise, are creations of un-elected persons thus unrepresentative of the democratic process, and finally cannot be subjected to a challenge under Part III leaving no recourse for those aggrieved. The Supreme Court attempts to conveniently sidestep all of this by resorting to verbiage. Since nobody really knows what the 'classical mould' of legislation is, this is doublespeak for "the Supreme Court can do whatever it wants" - a highlight of the Court's White-Knight tendency in this arena of economic offences [previously discussed here].

Public Interest and the Rights of Accused Persons

There are three other heads of argument that are considered in Suneja - (1) violation of Article 21 by the procedure created by the impugned order, which is not established by 'law'; (2) illegal use of Article 142 of the Constitution to curtail both Statutory and Fundamental Rights of the Petitioners, and; (3) Illegally preventing a stay of proceedings. Rather than consider each of these in turn, it is easier to attack the common thread underlying these strands - the idea that public interest is a satisfactory justification to proscribe rights of accused persons. With great vigour the bench notes that "it is now time for all of us including courts to balance the right of an accused person vis-a-vis the rights and interests of individual victims of a crime and society. Very often, public interest is lost sight of while dealing with an accused person and the rights of accused persons are given far greater importance than societal interests and more often than not greater importance than the rights of individual victims. ... It is not as if the appellants have been denuded of their rights. It is only that their rights have been placed in the proper perspective and they have been enabled to exercise their rights before another forum." 

While the Court merely makes a cursory reference to Shahid Balwa [(2014) 2 SCC 687], the same issue reared its head on that occasion. Here, again, it uses the arguments of the Petitioners against them in observing that in pressing for a stay of proceedings it seems that the conclusion of the trial is not an objective for them. These are serious cases of corruption, the Court notes, and so a stay order cannot be given for the asking. Such logic is fit for the pulpit, not for the Supreme Court. At the most basic level, the bench ignores the practical realities that plague the judiciary. The present petitions were filed sometime around winter 2016, and have been decided in July 2017. For whatever it is worth, the Petitioners did allege severe illegalities in the trial, and by refusing to consider the issue of stay at the earliest the Court allowed a potentially illegal trial to continue for six months. Within that time most of the evidence has been completed in two sets of petitions [Y. Harish Chandra Prasad v. CBI (Crl. Appeal No. 1145 of 2017) and P. Trivikrama Prasad v. CBI (Crl. Appeal No. 1153-54 of 2017]. How is that fair, and how is that a correct utilisation of judicial time? At a deeper level, the Court is effectively denouncing a class of persons from seeking an enforcement of their fundamental rights for no better reason in law than because it thinks it is against public interest. It does not realise that such rhetoric ultimately trickles down to trial courts, where an accused is then painted as guilty simply for choosing to remain silent [a fundamental right] and is thus subjected to lengthy pre-trial detention.

Conclusion

On all counts, Suneja is a bad decision. We get no further answers to why is it fair to exclude the High Court as a forum for jurisdiction beyond the bench re-iterating that this is in public interest. For this, it could have merely expressed agreement with the previous decision of Shahid Balwa and saved time. When the bench does try to engage with the legal issues, it fails to grasp what was at stake and flounders. Ultimately, the decision may result only in compounding uncertainty by using previously unheard of tests and expressions to explain what is, essentially, another instance of abusing the vast discretion vested with the unelected judges of our Supreme Court. 

(Disclaimer: The Author was engaged as a part of the team arguing for the Petitioners in Crl. Appeal No. 1145 of 2017)