Corruption by its very nature is a complex crime. It entails:

• giving and accepting bribes;
• ingenious ways of providing a promise or gratification to a party; and
• appropriating such bribes or proceeds and laundering such proceeds, which may also result in tax evasion or generation of “black money”, and may also be layered in foreign jurisdictions.

Due to its complexity and cross-border implications, India signed the United Nations Convention against Corruption (the “Convention”) on 9 December 2005 and ratified it on 9 May 2011. The Convention covers:

• preventative measures;
• criminalisation;
• enforcement;
• international co-operation;
• asset recovery; and
• technical assistance/information exchange.

The Convention also covers acts of corruption in the private sector. India is a member of the Financial Action Task Force, an international intergovernmental organisation formed on the initiative of the G7, based on mutual evaluation aimed at targeting international money laundering and terrorism funding.

In addition to the foregoing, India is also a signatory to:

• the United Nations Convention against Transnational Organized Crime;
• the Convention on Mutual Administrative Assistance in Tax Matters; and
• multiple mutual legal assistance treaties (MLATs), etc.

While the general criminal law in India (the Indian Penal Code, 1860) already accounted for anti-bribery or anti-corruption provisions in its Chapter IX, titled “Of Offences By Or Relating To Public Servants”, this did not deal in detail with the offence of corruption. The Indian Penal Code, 1860 (IPC) has been repealed and replaced by Bharatiya Nyaya Sanhita, 2023 (BNS). Chapter XII of the BNS deals with offences by or relating to public servants and corresponds with Chapter IX of the IPC.

In 1947, India enacted special legislation to deal with corruption more effectively; thus, the Prevention of Corruption Act, 1947 was passed. This was later repealed and replaced by the Prevention of Corruption Act, 1988 (PCA), which was enacted to consolidate and amend the laws relating to the prevention of corruption in India. Therefore, the PCA is the principal legislation for anti-corruption and anti-bribery laws in India.

The complex nature of corruption and bribery offences could lead to various other offences, such as money laundering and tax evasion. Any money generated by committing offences under the PCA is considered proceeds of crime under the Prevention of Money Laundering Act, 2002 (PMLA), and such offences under the PCA are scheduled offences under the PMLA.

Various offences under the PCA have been included as “scheduled offences” under the PMLA, meaning that both a bribe-giver and a bribe recipient will be liable for prosecution under the PCA, as well as for the offence of “money laundering” under the PMLA. In Directorate of Enforcement v Padmanabhan Kishore, reported at 2022 SCC OnLine SC 1490, the Supreme Court held that a bribe-giver is a party connected to the proceeds of crime and would therefore be liable for prosecution under the PMLA.

India also enacted the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (the “Black Money Act”) to deal with undisclosed foreign income and assets. The statute provides procedures for dealing with such income and assets, and for imposition of tax on any undisclosed foreign income and asset held outside India.

Another important step in dealing with corruption was the enactment of the Benami Transactions (Prohibition) Act, 1988 to deal with transactions in which property is illegally held by one person on behalf of another person.

In 2013, India also passed the Lokpal and Lokayuktas Act, 2013 (the “Lokpal Act”), establishing the Lokpal body for the Union and Lokayukta for states, to inquire into allegations of corruption against certain public functionaries, including (among others):

• the Prime Minister;
• cabinet ministers;
• members of parliament; and
• Group A officials of the Central Government.

A public official (ie, a government servant or employee of any corporation or any other body controlled or owned by the government) is prohibited from accepting any foreign contribution under the Foreign Contribution (Regulation) Act, 2010.

There are no specific guidelines for interpretation or enforcement of the national legislation on anti-corruption. However, Indian courts have interpreted these statutes and have monitored their enforcement on a case-by-case basis. The Supreme Court and various High Courts have been seized of challenges to the constitutionality of certain provisions/amendments to the PCA, and have been called upon to interpret these provisions or to issue guidelines on the timelines and the procedure of trial under such anti-corruption legislation/provisions.

The Supreme Court has, time and again, reiterated the importance of enforcement of anti-corruption laws and the menace such corruption causes in a society. All cases under the PCA are tried by special judges to fast-track the trial, leading to early disposal of cases. The oversight of special judges in the investigation and trial ensures that the investigating agencies are kept on their toes when it comes to such cases, and that the cases do not get lost in the barrage of cases pending in Indian courts. The Supreme Court regularly monitors the performance of such courts, and these statistics are uploaded on the National Judicial Data Grid.

More importantly, the Central Vigilance Commission (CVC) supervises corruption cases relating to public servants. In 2023, the CVC released its annual report, which stated that as many as 6,903 corruption cases probed by the Central Bureau of Investigation (CBI) were pending trials in different courts, 361 of these having been pending for more than 20 years.

The CBI has a CBI Manual, revised in 2020, which lays down the guidelines for the CBI to conduct investigations, and which deals with various issues including taking sanctions under the PCA. The CBI also has a Handbook on Investigation of Anti-Corruption Cases. Pertinently, said CBI Manual and Handbook are not public documents and hence are not available in the public domain.

The Ministry of Personnel, Public Grievances and Pensions has notified standard operating procedures for the processing of cases under Section 17A of the PCA.

There have been no amendments to the PCA in recent years. The last key amendment to the PCA was in 2018 by way of the Prevention of Corruption (Amendment) Act, 2018 (the “Amendment Act”). Under the Amendment Act, the following changes were made to the PCA.

While the PCA penalised a public servant for accepting any reward other than a salary, the Amendment Act amended this to bring within its ambit any act where a public servant accepts any “undue advantage other than legal remuneration”.

The Amendment Act makes giving a bribe to a public servant a direct offence, thereby extending the scope of the PCA to private parties as well.

The Amendment Act also prescribes that a trial under the PCA shall happen – as far as practicable – on a day-to-day basis.

The Amendment Act also created a new offence of taking undue advantage to influence a public servant by corrupt or illegal means or by the exercise of personal influence.

The PCA also introduced an offence relating to bribery of a public servant by a commercial organisation. This included an amendment whereby, if a commercial organisation was found guilty of bribing a public servant, with the connivance or consent of any officer of the company (including key managerial personnel), such persons would also be guilty of the offence and be liable to be proceeded against.

The Amendment Act reduces the types of offences under criminal misconduct to cover only two offences – misappropriating property and amassing disproportionate assets. The Amendment Act also introduced Section 17A, which mandates that no police officer shall conduct any enquiry or investigation into any offence alleged to have been committed by a public servant under the PCA where the alleged offence is relatable to any recommendation made or decision taken by such public servant in discharge of their official functions or duties, without the previous approval of the relevant authority.

Most importantly, the Amendment Act introduced Chapter IV A into the PCA, which provides powers of attachment and forfeiture of property as provided in the PMLA and the Criminal Law Amendment Ordinance, 1944.

While bribery has not been specifically defined under the PCA, a substantial definition of “undue advantage” has been provided. The definition is all-encompassing, since it includes any gratification, other than the legal remuneration received by the public servant. Further, the explanatory note to the provision further widens the word “gratification” to being not limited to pecuniary gratification or being estimable in money. Therefore, under the PCA, it is not necessary for the undue advantage to be in money, property or something estimable in money. It includes rights in property, any preferment, privilege, etc. However, it must have some value in order to qualify as an advantage.

Under Section 7 of the PCA, it is an offence for a public official to obtain, accept or attempt to obtain any undue advantage with an intent to dishonestly perform their duty as a public servant. The provision is again comprehensive, since the explanatory note provides that improper performance is not necessary to prosecute under this provision. However, to prosecute under the provision, it is necessary for the prosecution to prove that a demand for undue advantage was made by the public servant, and mere receipt of undue advantage is not enough to prove this offence.

The jurisprudence on the proof of demand being sine qua non is backed by multiple pronouncements of various High Courts in India, and even the Supreme Court in Krishan Chander v State of Delhi, reported at AIR 2016 SC 298, held that proof of demand is an absolute necessity. This has caused issues in numerous prosecutions, since in many cases the complainant or the person from whom the demand was made would die or turn hostile during trial, and therefore the prosecution would fail to prove its charges.

As such, a Constitution Bench of the Supreme Court in Neeraj Dutta v State (NCT of Delhi), reported at (2023) 4 SCC 731, recently held and clarified that in the absence of direct evidence (testimony recorded in court), regarding the demand of undue advantage, the prosecution can prove the demand for the undue advantage by way of circumstantial evidence – though the quality of evidence should be beyond reasonable doubt. Therefore, in order to prove the offence of taking of undue advantage by a public servant, there are two elements to prove:

• demand for undue advantage; and
• acceptance of the undue advantage by the public servant.

At stated above, the term “undue advantage” has been given a comprehensive definition. Therefore, hospitality expenditures (travel expenses, meals), gifts and promotional expenditures, facilitation payments, etc, will fall under the purview of “undue advantage”.

“Public official” has been defined widely under the PCA to include:

• any person who holds an office by virtue of which that person performs a public duty; and
• a person who performs their duties under authorisation of courts for the administration of justice.

The provision itself provides at least 12 broad types of persons along with two further explanations, indicating the legislature’s intent to keep the term as wide as possible; now even the constitutional courts are pronouncing decisions which indicate that the provision is subject to the widest interpretation possible. A few such instances include the following.

• In CBI, Bank Securities & Fraud Cell v Ramesh Gelli & Others, reported at (2016) 3 SCC 788, it was held that even the chairperson of a private bank will be a public servant for the purpose of the PCA.
• In State of Gujarat v Mansukhbhai Kanjibhai Shah, reported at (2020) 20 SCC 360, the Supreme Court held that an official of a deemed university performs the same public duty as that of a government university, and therefore the trustee of the deemed university is a public servant for the purpose of the PCA.
• In Sanjay Kumar Agarwal v CBI, reported at 2023 SCC OnLine Jhar 394, the Jharkhand High Court interpreted the above pronouncements and expanded the definition of public servant to include resolution professionals appointed under the Insolvency and Bankruptcy Code, 2016 and governed by the Insolvency and Bankruptcy Board of India. The pronouncement has been challenged before the Supreme Court and is presently sub judice.

Employees of State-controlled companies stand covered under the definition of public servant, which includes any person in service of a corporation established under a central or State-controlled government or even aided by the government or a government company.

There is no provision or legislation under Indian anti-bribery laws that criminalises bribery of foreign public officials. While India did attempt to legislate on this issue by introducing a bill titled “The Prevention of Bribery of Foreign Public Officials and Officials of Public International Organisations Bill, 2011”, this lapsed and was never enacted.

Bribery by and between private parties is not a punishable offence under the PCA. However, India’s general law enumerating offences and prescribing punishment (the Indian Penal Code, 1860) (IPC) makes it punishable if, on the facts of a particular case, a company has entrusted certain property to an employee, who, in exchange for a bribe, misappropriated that property – here, an offence of criminal breach of trust will be established. Further, if an employee accepted a bribe and knowingly induced a company to enter into a loss-causing transaction, such act would fall within the purview of cheating. 

For the first time, the Amendment Act expanded the scope of the PCA to target bribe-givers, both directly and indirectly. This is provided under Section 7A of the PCA. Therefore, any person who is otherwise permitted to liaise with any government authority can be liable for punishment under the PCA if such person has been found offering, or attempting to offer, any undue advantage as motive or reward in order to induce a public servant, by exercising their influence over the public servant, to conduct their public duty in an improper or dishonest manner.

Prior to the Amendment Act, these persons were prosecuted as abettors or by invoking the provision of criminal conspiracy under the IPC. As previously stated, bribery, including influence-peddling of foreign public officials, is not covered under the PCA or elsewhere.

While the PCA does not impose any record-keeping obligations, the Companies Act, 2013 (the “Companies Act”) obligates a company to maintain its books of accounts for a period of up to eight preceding financial years. If an inquiry or investigation is pending against the company under the Companies Act, the company is required to maintain its books of accounts for a longer period. If the senior management of the company, including the managing director and the chief financial officer, or any person charged by the board, fails to comply with such obligations, such person will be punished with imprisonment for a term extending to one year and/or fines of between INR50,000 and INR500,000.

Further, the managing director, whole-time director in charge of finance, chief financial officer or any other person charged with the duty of compliance with the requirements of maintaining the financial statement of the company shall be punishable with imprisonment for a term that may extend to one year or with fines of between INR50,000 and INR500,000 (or with both) if the corporate books:

• do not show the true and fair view of the state of affairs of the company;
• do not comply with the accounting standards notified under the Companies Act; or
• are not in the form or forms provided for a different class or classes of companies in the Companies Act.

If the concerned officer mentioned above is found to have maintained false books of accounts, they may, depending on the facts and allegations, be subject to the various offences mentioned under the IPC pertaining to forgery, falsification of accounts, etc.

Under the PMLA, banks, financial institutions, auditors and intermediaries (such as brokers) are obligated to maintain records of their client’s transactions for a period of five years, where such transactions exceed a certain value. Failure to maintain these records results in liability with steep penalties.

Misappropriation of public funds is an offence under Section 13(1) of the PCA, and is punishable with the highest sanction under the PCA – ie, imprisonment for a minimum of four years and for up to ten years, along with a fine.

Under the PCA, it is an act of criminal misconduct by a public servant for such public servant to misappropriate – or even otherwise convert for their own gain – any property entrusted to them. The provision for criminal misconduct has been amended to its present version in the Amendment Act. Before the Amendment Act, the provision was far more comprehensive, and covered various acts of criminal misconduct; however, in its present form only misappropriation of public property or owning assets that are disproportionate to the public servant’s known sources of income are considered criminal misconduct.

The Amendment Act, under Section 7A of the PCA, targets intermediaries in the same way as influence-peddlers (see 2.2 Influence-Peddling). Such intermediaries are now liable to be punished under the PCA for accepting, obtaining or even attempting to obtain any undue advantage as motive or reward to induce a public servant, by exercising their influence over the public servant, to conduct their public duty in an improper or dishonest manner.

There is currently no national legislation in India regulating lobbying activities. Various laws in India are routinely enacted after going through a process of public consultation on draft bills/legislation. While companies and commercial organisations (including their trade bodies and industry associations) are permitted to participate in legislative consultative processes, such participation cannot, however, cross the line drawn by Section 7 of the PCA, which makes it illegal for a “public servant to take gratification other than legal remuneration in respect of an official Act”.

In 2015, a private member’s bill – the Disclosure of Lobbying Activities Bill, 2015 – was introduced in the Upper House of the Parliament of India, though it subsequently lapsed and never became law.

There is no specific statute of limitations under the PCA preventing any investigating agency from initiating an investigation or launching a prosecution before the court, or depriving any court from taking cognisance of an offence within a stipulated timeframe. However, the general criminal procedural law in India, under Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) (which replaced the earlier regime set out under Code of Criminal Procedure, 1973) prescribes periods of limitation for launching prosecution only in respect of certain categories of offences, based on the quantum of punishment prescribed. For all offences under the PCA concerning more than three years, the limitation period prescribed under the BNSS is not applicable, meaning that prosecution may be launched at any point of time.

Further, the PCA provides that – as far as practicable – trials shall be held on a day-to-day basis and concluded within two years. If the trial is not concluded within two years, it is incumbent upon the court holding trial to record reasons for not being able to complete trial, and to extend the period for six months at a time. However, the total time taken to conclude the trial shall not ordinarily exceed four years.

The geographical reach of the PCA is the entirety of India, including all its states and Union territories; therefore, it does not have extraterritorial reach.

The Amendment Act introduced corporate liability to the PCA, under which, “commercial organisation” has been defined comprehensively to include not only Indian companies but also foreign companies who carry on a part of their business in India.

These “commercial organisations” are susceptible to standing trial and suffering imposition of a fine if found guilty during trial of the offence of giving or promising to give any “undue advantage” to a public servant, in order to obtain or retain business or to obtain or retain any advantage in the conduct of their business.

Further, the commercial organisation can also be held liable for the offence of bribing a public servant, in order to induce the public servant to improperly perform a public duty or to reward the public servant’s improper performance, just as an individual so accused would be held liable.

While the BNS does not envisage vicarious liability, the PCA provides for a certain type of vicarious liability – ie, any person in charge of a company is liable for acts of the company, upon proof that such acts were committed with their consent or connivance. Therefore, individuals and companies can both be held liable for the same offence.

In Religare Finvest Limited v State of NCT of Delhi and Another, reported at 2023 INSC 819, the Supreme Court held that a successor entity can be held liable for offences by the target entity subject to the terms of the scheme of the merger, the nature of allegations and existence of proof against the entity. After examining the law on this subject, the Supreme Court held that criminal liability of a company:

• is recognised where it can be attributable to individual acts of employees, directors or officials of a company, or to juristic persons (while relying on past pronouncements in Tesco, Meridian Global Funds, Standard Chartered Bank and Iridium);
• is recognised even if its conviction results in a term of imprisonment (Meridian Global Funds and Iridium);
• cannot be transferred ipso facto, except when in the nature of penalty proceedings (relying on McLeod Russel);
• ceases to exist given that the legal effect of amalgamation of two companies is the destruction of the corporate existence of the transferor company; and
• is succeeded to by the transferee company, apart from only in defined legal proceedings.

In criminal cases in India, an effective defence strategy must be based on facts that are plausible and backed by credible and admissible evidence. There cannot be a straight-jacket formula for defence, since each criminal trial turns on its own facts and evidence. Further, the defence strategy keeps evolving as and when evidence is produced and as testimonies are recorded in court.

During a trial, an accused person has a chance to establish their defence against the charges brought by the prosecution, including by cross-examining witnesses and bringing witnesses of their own.

For certain specific offences relating to a public servant under the PCA, nо enquiry or investigation can be initiated without the prior sanctioning of the state or the Central Government (as the case may be). The issue of whether this procedural requirement for obtaining a prior sanction (as introduced by the Amendment Act in 2018) will apply retrospectively is currently pending before the Supreme Court.

Further, if a person is found to have been “compelled” to give undue advantage to a public servant, they shall not punished for an offence of bribing the public servant, subject to the “compelled” person reporting the matter to law enforcement agencies within a period of seven days of giving the undue advantage.

Further, if a person gives undue advantage in order to assist law enforcement agencies in their investigation under the PCA, such persons are not liable for the offence of bribing public officials.

The PCA recognises that a “commercial organisation” shall not be liable to such prosecution if it is able to prove that it had in place adequate procedures for preventing persons associated with the commercial organisation from undertaking such conduct. Pertinently, the PCA states that the Central Government shall prescribe such adequate procedures; however, none have been notified to date. Until such time, a commercial organisation may choose to frame its own policies and conduct regular internal training in order to present a defence that it took steps to prevent any such acts from being committed by its officials.

There are no exceptions to the previously discussed defences (see 4.1 Defences).

See 4.1 Defences for any and all exceptions available to a person or commercial organisation under the PCA.

There are no sectors or industries that can plead exemption from the applicability of the PCA.

In the course of proceedings under the PCA, the court may, at any stage of inquiry or trial, grant a pardon to such person on condition of their making a full and true disclosure of the circumstances within their knowledge with respect to the offence in question, whether as a principal or abettor of such offence, with a view to obtaining evidence of any person supposed to have been directly or indirectly concerned in or privy to an offence, and as provided under the PCA.

If an accused person pleads guilty to an offence during or before commencement of trial, the courts have discretion to take a lenient view while sentencing them. However, while exercising this discretion, the court cannot award a sentence that is lower than the minimum sentence prescribed for such offence.

For the offence of a public servant obtaining, accepting or attempting to obtain any undue advantage with an intent to dishonestly perform their duty as a public servant, as provided under Section 7 of the PCA, the punishment prescribed for the public servant is minimum imprisonment of three years and up to seven years, along with a fine.

For the offence of taking advantage to influence a public servant by use of personal influence, as provided under Section 7A of the PCA, the punishment prescribed for an individual person is minimum imprisonment of three years and up to seven years, along with a fine.

For the offence of bribing a public servant to induce such public servant to improperly perform a public duty or to reward the public servant’s improper performance, under Section 8 of the PCA, the punishment prescribed for an individual person is minimum imprisonment of three years and up to seven years, along with a fine. For a commercial organisation, there is only a fine.

For the offence of giving or promising to give any undue advantage to a public servant to obtain or retain business, or to obtain or retain any advantage in the conduct of its business, as provided under Section 9 of the PCA, the punishment prescribed for a commercial organisation is a fine.

For the offence of being in charge of a commercial organisation and found guilty under Section 9 of the PCA, the relevant individual official of the commercial organisation can be punished with minimum imprisonment of three years and up to seven years, along with a fine, as provided in Section 10 of the PCA.

For abetting an offence under the PCA, as provided under Section 12, the punishment prescribed is minimum imprisonment of three years and up to seven years, along with a fine.

For criminal misconduct, whereby a public servant either misappropriates public property or owns assets far exceeding their known source of income, as provided under Section 13 of the PCA, the punishment prescribed is minimum imprisonment of four years and up to ten years, along with a fine.

Being convicted under the PCA and subsequently being convicted under the PCA again constitutes a separate offence, punishable with minimum imprisonment of five years and up to ten years, and with a fine, as provided under Section 14 of the PCA.

An attempt to commit an offence under Section 13(1)(a) of the PCA – ie, the misappropriation of public property by a public servant – is punishable with minimum imprisonment of two years and up to five years, and with a fine, as provided under Section 15 of the PCA.

Section 16 of the PCA provides for calculation of quantum of a fine for offences under Sections 7, 8, 9, 10, 11, 13(2), 14 and 15 of the PCA. The court shall consider and be mindful of the value of the property that the accused persons have obtained by committing the offence. For offences under Section 13(1) of the PCA, the court shall consider the value of the public property proved to have been misappropriated and that the accused was unable to account for.

Section 14 of the PCA provides for punishment for habitual offenders, wherein subsequent commission of an offence under the PCA is punishable with imprisonment for a term of not less than five years, which can be extended to ten years.

Further, there is no formal sentencing policy in India. Consequently, there is wide discretion for courts in matters concerning sentencing of the accused. As per the guidelines outlined by the Supreme Court, while awarding sentences, courts must consider the principles of proportionality and deterrence.

No express provision under the PCA casts a duty on any person to report commission of any offence under the PCA by another person to any law enforcement authority.

However, Section 8 of the PCA states that, if a person has been compelled to give a bribe to any public officer, such person is legally obligated to report/disclose this to a law enforcement authority within a period of seven days. Section 8 also envisages a duty to disclose in a scenario where a person, before giving a bribe to a public officer, is obligated to inform a law enforcement authority when such bribe is being offered in order to assist any law enforcement authority or investigating agency to investigate any offence under the PCA against an identified person.

While the duty of disclosure under the PCA is limited to the aforementioned circumstances, a duty is nonetheless cast upon listed companies under Section 177(9) of the Companies Act, 2013 to internally implement a “vigil mechanism” enabling their directors and employees to report illegal conduct and behaviour. In cases where such conduct is reported, Section 177(10) requires such listed company to disclose this on its website and in its board report. Further, it is also the duty of independent directors to ensure that such a “vigil mechanism” envisaged under Section 177(9) is workable and effective, so that the sanctity of such “vigil mechanism” is not compromised.

The PCA is silent on creating any incentives for companies and individuals to engage in voluntary self-disclosure of potential violations of anti-bribery and anti-corruption. Various protections are granted to whistle-blowers under numerous statutes (as stated in 6.4 Protections Afforded to Whistle-Blowers) but do not incentivise this. 

As stated in 6.2 Voluntary Disclosure Incentives, Indian law does not lay down relevant procedures for self-disclosure.

In 2014, the Indian Parliament enacted the Whistle-Blowers Protection Act, 2014; however, the Act is yet to be put into operation.

As stated in 6.1 Disclosure Obligations, Section 177(9) of the Companies Act 2013 casts a duty on listed companies to ensure that their “vigil mechanism” is framed in such a manner that it contains adequate safeguards and sufficient checks and balances for preventing victimisation of employees who report illegal conduct and behaviour.

In addition, corporate governance rules introduced by the Securities Exchange Board of India (SEBI) require listed companies to introduce a whistle-blower policy that is workable and effective, and which also provides adequate safeguards to whistle-blowers.

More recently, one notable change brought in by the legislature is Section 397 of Bharatiya Nagrik Suraksha Sanhita (BNSS), which provides for witness protection schemes to be notified by a state government. A whistle-blower can avail of such protection under the BNSS. Further, given the introduction of the electronic first information report (e-FIR) under the BNSS – which permits even a police office to register an FIR as the complainant – this can come to the aid of whistle-blowers in reporting bribery/corruption-related offences under the PCA.

A complaint from a whistle-blower may now be in two forms:

• a physical complaint resulting in an FIR; or
• an e-FIR filed by a whistle-blower where, even without waiting for a physical complaint, an investigating officer (IO) finds the need for immediate action and registers an FIR without a physical complaint from the whistle-blower.

At this point, withdrawal of prosecution under the BNSS can only happen with prior permission of the complainant, which might now include whistle-blowers.

Indian law does not provide any incentive to whistle-blowers. However, it provides adequate mechanisms for presenting victimisation of whistle-blowers under the Companies Act, 2013. As stated previously, the Whistle-Blowers Protection Act, 2014 has not been put into operation.

The CVC is the main body for enforcing antibribery and anti-corruption laws in public offices. The CVC has the power to itself inquire, or cause an inquiry, into any allegation of corruption. The CVC has superintendence over the vigilance administration of:

• the various ministries of the Central Government;
• corporations established by or under any Central Act; and
• government companies, as well as societies and local authorities owned or controlled by the government.

The CVC can direct initiation of disciplinary proceedings or any other appropriate action against a public servant of the Central Government by the competent authority. However, any prosecution, either by the CVC itself or by the CBI under the supervision of the CVC, has criminal enforcement by launching prosecution under the PCA.

Criminal prosecutions under the PCA are conducted:

• by the police authorities;
• by the Enforcement Directorate (ED) in cases where the offence under the PCA is a predicate offence;
• by the tax authorities under the Black Money Act for wilful evasion of taxes; and
• by the Lokpals/Lokayuktas.

Multiple bodies are mandated to enforce anti-corruption laws in India, as detailed in the following.

CVC/CBI

The CVC is the primary statutory body that supervises the investigation and prosecution of cases by the CBI under the PCA. The CVC can itself inquire or cause the CBI to inquire into any allegations of corruption by public officials. This is, however, caveated by the fact that the CVC or the CBI (as the case may be) must seek permission of the competent authority to initiate an inquiry or an investigation, as mandated under Section 17A of the PCA. The CVC can also direct the CBI for the purpose of discharging the responsibility entrusted to it. Additionally, the CVC can review the progress of investigations conducted by the CBI. The CVC can also review the progress of applications pending with the competent authorities for sanctioning of prosecution under the PCA. On issues of preventing corruption in such entities, the CVC has also been mandated to tender advice to:

• the Central Government;
• corporations established by or under any Central Act;
• government companies; and
• societies and local authorities owned or controlled by the Central Government.

While conducting an inquiry, the CVC can:

• summon and enforce the attendance of any person from any part of India and examine them on oath;
• require the discovery and production of any document;
• receive evidence on affidavits;
• requisition any public record or copy thereof from any court or office; and
• issue commissions for the examination of witnesses or other documents.

In relation to the investigation of offences and arrest of persons concerned in such offences, the CBI (under the Delhi Special Police Establishment Act, 1946) has all the powers, duties, privileges and liabilities that police officers have in connection with the investigation of offences. After completing the investigation, the CBI must submit a report to the CVC. The CVC must consider such report and decide whether to:

• file a charge-sheet or closure report before the Special Court against the public servant; or
• initiate departmental proceedings or any other appropriate action against the concerned public servant by the competent authority.

Police Authorities/ACB

The police authorities derive powers from the BNSS, and can:

• issue summons to join the investigation;
• seek records and documents;
• take statements (even though such statements are not judicial statements);
• arrest the accused; and
• conduct searches and seizures.

However, the police authorities, like other investigating agencies, must seek permission of the competent authority to initiate an inquiry or investigation, as mandated under Section 17A of the PCA.

ED

In cases where the investigating agency, after a preliminary inquiry, lodges an FIR, and where the alleged offence is a scheduled offence under the PMLA, the ED can register an enforcement case information report (ECIR) and initiate investigation under the PMLA. Since the ED’s investigation is triggered only after the CBI/police authorities have received permission under Section 17A of the PCA to initiate investigation, the ED does not seek a separate permission under Section 17A. The ED has the power to (among others):

• summon the accused/witnesses;
• compel production of records;
• receive evidence on affidavits;
• issue commissions for examination of witnesses and documents; and
• arrest the accused.

In addition to these powers, the ED can attach tainted properties or properties of equivalent value, and can freeze assets/accounts. These powers have been extended to police officials and the CBI, under Chapter IV of the PCA, by the Amendment Act. The Central Government has, by way of Section 66 of the PMLA and by various notifications, allowed information-sharing among agencies, and has allowed the ED authorities to furnish or facilitate the provision of information to various government agencies, if such information is necessary for the agencies to perform their functions under the respective laws. As a corollary, since the police/CBI investigation is a precursor to the ED initiating the investigation, these agencies provide most of the information/evidence collected for the ED, to enable it to record a comprehensive ECIR.

Income Tax Authorities

Income tax authorities investigating offences under the Black Money Act draw powers from Section 131 of the Income Tax Act, and have the same powers as are vested in a court under the Code of Civil Procedure, 1908 (CPC) – namely:

• discovery and inspection;
• enforcing the attendance of any person, including any officer of a banking company, and examining them on oath;
• compelling the production of books of account and other documents; and
• issuing commissions.

In addition to the foregoing, the income tax authorities can:

• conduct searches and seizures;
• requisition books of accounts; and
• call for information as necessary for the purposes of the investigation.

The income tax authorities can also attach properties as provided in the second schedule of the Income Tax Act for the recovery of tax.

Lokpals and Lokayuktas

The Lokpal has the powers of superintendence over, and the power to give direction to, the CBI in respect of matters referred by the Lokpal for preliminary inquiry or investigation to the CBI under the Lokpal Act. The CVC is also mandated to send a statement, at such interval as the Lokpal may direct in respect of action taken on complaints referred to it.

The Lokpal also has the powers to direct searches and seizures by any agency, including the CBI, if the Lokpal has reason to believe that any document which, in its opinion, shall be useful for or relevant to any investigation under the Act is secreted in any place. For the purpose of any preliminary inquiry, the Inquiry Wing of the Lokpal has all the powers of a civil court, under the CPC (as indicated previously). The Lokpal may, for the purpose of conducting any preliminary inquiry or investigation, utilise the services of any officer, organisation or investigating agency of the Central Government or of any state government, as the case may be.

If the Lokpal has reason to believe (with the reason for such belief being recorded in writing) on the basis of material in their possession that any person is in possession of any proceeds of corruption, that such person is accused of having committed an offence relating to corruption, and that such proceeds of offence are likely to be concealed, transferred or dealt with in any manner which may result in frustrating any proceedings relating to confiscation of such proceeds of offence, the Lokpal or the authorised officer may (by order in writing) provisionally attach such property for a period not exceeding 90 days from the date of the order, and may seek confirmation from a special judge of attachment of such property until the completion of the proceedings against the public servant in the Special Court.

The BNS has extraterritorial jurisdiction. Section 3 and 4 of the BNS, along with Section 208 of the BNSS, recognise extraterritorial application of Indian criminal law. An Indian citizen is subject to Indian criminal law’s extraterritorial reach as they can even be punished for offences committed outside India. Similarly, a person outside India can also be punished for an offence in India under the BNS.

The scope has been further expanded under the BNS through introduction of its Section 48, which states that abetment of an offence from outside India for commission of an offence in India is also liable to be punished. The CBI and the police authorities derive powers from the BNS, which allows these authorities to issue letters of request and service summons under various MLATs and reciprocal arrangements with foreign states. Being members of Interpol, the Indian authorities can issue a Red Notice against an accused. A Red Notice is a request to law enforcement worldwide to locate and provisionally arrest a person pending extradition, surrender or similar legal action.

The PCA does not have extraterritorial jurisdiction. However, considering the multiple MLATs, international conventions and international organisations that India is a party to, the courts in India can serve summons on foreign entities and foreign nationals. India also has multiple extradition treaties that allow persons/officials in foreign jurisdictions to be extradited to India for trial, especially in politically sensitive cases.

In this regard, the Black Money Act specifically deals with foreign undisclosed income and specifies that an undisclosed asset located outside India shall be charged to tax on its value in the previous year in which such asset reaches the notice of the assessing officer. The Black Money Act provides for:

• the direct assessment of the person on whose behalf or for whose benefit the undisclosed income from a source located outside India is receivable or the undisclosed asset located outside India is held; or
• the recovery from such person of the tax or any other sum of money payable in respect of such income and asset.

Section 38 of the Black Money Act also provides that the Tax Recovery Officer may, in a case where an assessee has property in a country or a specified territory outside India, forward a certificate to the board for recovery of the tax arrears from the assessee, where the Central Government or any specified association in India has entered into an agreement with that country or territory under Section 90 or Section 90A of the Income Tax Act, or under Section 73 subsections (1), (2) or (4) of the Act (as the case may be), for the purposes of recovery of tax.

The PMLA provides a wider ambit to the ED in foreign matters. The PMLA defines an “offence with cross-border implications” as meaning:

• any conduct by a person at a place outside India that constitutes an offence at that place, which would have constituted an offence specified in Part A, B or C of the Schedule provided in the PMLA had it been committed in India, and if such person transfers in any manner the proceeds of such conduct or part thereof to India; or
• any offence specified in Part A, B or C of the Schedule that has been committed in India and where the proceeds of crime, or part thereof, have been transferred to a place outside India, or where any attempt has been made to transfer the proceeds of crime, or part thereof, from India to a place outside India.

In the definition of “proceeds of crime”, the PMLA also covers any property derived or obtained, directly or indirectly, by any person as a result of criminal activity relating to a scheduled offence or the value of any such property, or where such property is taken or held outside the country, and the property equivalent in value is held within the country or abroad. Accordingly, the PMLA contains Chapter IX – ie, Reciprocal Arrangement for Assistance in Certain Matters and Procedures for Attachment and Confiscation of Property. This chapter deals with:

• reciprocal arrangements with foreign states;
• provisions for issuing letters of request;
• reciprocal arrangements for processes and assistance regarding transfer of accused persons; and
• attachment, seizure and confiscation, etc, of property in a contracting state.

India does not recognise deferred prosecution agreements and non-prosecution agreements. However, India does recognise plea bargaining in limited circumstances. It is not allowed in cases where the prescribed punishment is death or life imprisonment, or imprisonment for a term exceeding seven years. Plea bargaining also does not apply where the offence affects the socio-economic condition of the country or has been committed against a woman or a child under the age of 14 years.

A person accused of an offence may file a plea-bargaining application in the jurisdictional court with a brief description of the facts of the case. A prerequisite for such an application is that the accused person has not previously been convicted of the same offence by a court. After understanding the nature and extent of punishment provided by the law for the offence, the application is voluntarily preferred.

Directorate of Enforcement v Bibhu Prasad Acharya, 2024 SCC Online SC 3181

In a recent judgment pronounced in November 2024, the Supreme Court ruled on prior sanctions to prosecute a public servant for commission of offences of money laundering under the PMLA. This is a significant ruling given that the Supreme Court held that Section 197(1) of CrPC (which mandates that a prior sanction be obtained before initiating prosecution against public servants) is applicable to prosecutions and proceedings under the PMLA.

In this case, the accused person (ie, Bibhu Prasad Acharya) was a vice-chairman and managing director of Andhra Pradesh Industrial Infrastructure Corporation Limited, which is a public sector undertaking; therefore, the accused qualified as a “public servant”. The Supreme Court was seized of a challenge to the Trial Court’s order taking cognisance of a complaint filed by the ED alleging commission of the offence of money laundering under the PMLA. This was challenged on the grounds that since no prior sanction under Section 197(1) of CrPC was taken the accused person cannot be prosecuted. The Supreme Court, rejecting the ED’s contention, ruled that Section 197(1) of the CrPC was applicable to prosecution under the PMLA, in view of Section 65 of the PMLA, which made provisions of the CrPC applicable to the PMLA provided they were not inconsistent with the provisions contained in the PMLA.

Sita Soren v Union of India (2024) 5 SCC 629

The appellant Sita Soren was charged under the provisions of the PCA, for purportedly accepting bribes from an independent candidate standing for elections. The principal issues for consideration were whether the offence of bribery can be said to be complete if the bribe stands taken but the act for which the bribe was taken was not performed, and whether an MLA/MP has immunity from prosecution under Article 105(2) or Article 194(2) of the Constitution for accepting bribes to vote.

The Supreme Court held that it does not matter whether the act for which the bribe was taken is ever performed. Section 7 of the PCA thus defines bribery as entailing the act of offering, giving or accepting bribes with the intention to influence the actor’s actions. Further, it was held that there is no immunity from prosecution under Article 105 and 194 of the Constitution for an MLA. The Supreme Court overruled its earlier verdict delivered in the case of PV Narsimha Rao v State (1998) 4 SCC 626, which had previously ruled that a Member of Parliament enjoyed immunity from prosecution on charges of bribery.

Nara Chandrababu Naidu v The State of Andhra Pradesh (2024) SCC OnLine SC 47

The principal issue raised in this matter was in respect of retroactive application of Section 17A of the PCA, which stipulates that sanctioning for prosecution must be obtained prior to investigating public officials for actions undertaken in the course of their official duties.

A two-judge bench of the Supreme Court thoroughly examined the retroactive application of Section 17A of the Prevention of Corruption Act, despite the alleged offences having occurred between 2015 and 2019, prior to the introduction of Section 17A in 2018. A two-judge bench of the Supreme Court came to a split decision with respect to retrospective application of Section 17A, and the matter has been referred to a larger bench to resolve issues of retrospective application of Section 17A.

PI Babu v CBI, Criminal Appeal No 1864 of 2013

In this judgment, the Supreme Court held that a court refusing to take cognisance of an offence under Section 19 of the PCA on the grounds that no valid sanction is obtained must still record its findings on the merits of the case. In so ruling, the Supreme Court remanded the matter to the Special Court with a direction to decide the case afresh and record its findings on each of the issues involved on merits. In this case, the Court held that, since the Special Court had failed to record any specific findings on merits and acquitted the appellant only on the grounds that the sanction obtained by the prosecution was not valid, the Special Court had committed an error.

As stated in 5.2 Guidelines Applicable to the Assessment of Penalties, there is no formal sentencing policy in India. Consequently, courts have wide discretion in matters concerning sentencing of accused. A number of broad guidelines have been outlined by the Supreme Court with respect to the awarding of sentences to accused persons. As per these, when awarding sentences, courts must consider the principles of proportionality and deterrence. Broadly, certain mitigating circumstances that courts consider when sentencing an accused upon completion of trial include:

• past antecedents of the accused;
• their mental and physical health at the time of the offence;
• the role played in the commission of the offence; and
• their socio-economic background.

The PCA as originally enacted did not expressly provide for any duties to prevent corruption. However, parliament amended the PCA in 2018 such that its application has been extended to include commercial organisations. Section 9 has therefore been amended to criminalise the act of bribing as well as an attempt to bribe a public official by a commercial organisation.

However, the amendment also states that if a commercial organisation has implemented adequate procedures to ensure compliance of guidelines (as may be statutorily introduced) to prevent corruption, this shall be treated as a valid defence available to such a commercial organisation.

It should be noted that the government has not formally issued any guidelines under Section 9 that a commercial organisation may adopt, thereby ensuring compliance of such guidelines by its employees. However, this amendment has made it incumbent upon companies to introduce internal policies, guidelines or codes of conduct to ensure their employees are routinely sensitised towards India’s anti-bribery law, and as regards their duty to act in a manner to prevent bribery.

Such internal policies, guidelines or codes of conduct are modelled on international best practices, since the government has not yet released guidelines under Section 9. In situations where a company has failed to implement any internal anti-bribery policies, guidelines or codes of conduct, the defence under Section 9 is not available, therefore rendering it liable to prosecution under the PCA.

While the PCA itself does not explicitly lay out detailed guidelines for compliance programmes, it does provide a framework that encourages organisations to establish robust anti-corruption measures, including expectations for ethical conduct and best practices to prevent bribery and corruption. Please see 8.1 Compliance Obligations for the mandatory practices provided under the Act.

There is no direct corporate monitoring mechanism within the PCA. However, the enforcement authorities can obtain information pertaining to bribery and corruption through company auditors. As per Section 139 of the Companies Act, 2013, every company is mandated to appoint an auditor in their first annual general meeting, who is responsible for conducting audits in accordance with the auditing and accounting standards prescribed under Section 133 of the Companies Act, 2013. The recognised authorities on whose recommendations the Central Government prescribes these auditing standards are the Institute of Chartered Accountants of India (ICAI) and the National Financing Reporting Authority (NFRA).

In light of the specific auditors’ duty under Section 143(12) of the Companies Act, 2013, the ICAI states in its auditing handbook of reporting fraud that an auditor is mandated to report bribery, money laundering, corruption or non-compliance with any applicable law. The ICAI states that the direct effect of any act of bribery or corruption in either the form of illegal benefit or penal consequences is on the company and should thus be reported by the appointed auditor. Section 147 of the Companies Act, 2013 lays down a detailed code for penalisation of the auditor for contravention of their duties.

The enforcement of the PCA was assessed by the United Nations Office on Drugs and Crime in their report titled INDIA: Incentives for corporate integrity in accordance with the United Nations Convention against Corruption, published in 2013.

Subsequently, the PCA underwent substantial amendment in 2018 to expand the scope of its application to commercial organisations, through critical amendments made in Section 9. However, the Indian government is yet to release guidelines for preventing bribery and corruption – which, once such guidelines are notified, commercial organisations would be mandated to follow and ensure compliance with.

Following the latest amendment in 2018, the Indian government has not proposed any further amendments to the PCA, nor is there any proposal to that effect pending in the government.