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While Brazil adopted its Anti-Corruption Act aimed at companies only on August 1, 2013, with Law #12,846, India adopted an Anti-Corruption Act known as “The Prevention of Corruption Act” on September 9, 1988, which typifies and penalizes bribery offenses involving both individuals (natural persons) and companies (legal entities). Now, let’s delve into the main points of this act below.

India, a parliamentary republic with 28 states and 9 territories, holds the distinction of being the largest democracy in the world, with approximately 1,428,600,000 inhabitants, according to a report on the status of the world population in 2023, published by the United Nations Population Fund. The Indian parliament is bicameral in nature, with the Lok Sabha and the Rajya Sabha. The Rajya Sabha is considered the upper house or the Council of States and consists of members appointed by the President and elected by the state and territory legislatures; whereas the Lok Sabha is considered the lower house or the people's house. The Lok Sabha is a temporary house and can only be dissolved when the party in power loses the support of the majority of the house. The Rajya Sabha is a permanent house that cannot be dissolved. Members of the Rajya Sabha are elected for a six-year term. The judiciary comprises a supreme court, 24 higher courts, and several district courts, all of which are subordinate to the Supreme Court.

After a brief overview of the legislative structure in force in India, we now delve into “The Prevention of Corruption Act”, starting by defining “undue advantage”, which, according to the aforementioned law, includes any bonus of any nature other than legal remuneration.

According to “The Prevention of Corruption Act”, the Central Government or the State Government may, by notice in the Official Gazette, appoint as many Special Judges as necessary for specific areas or cases or group of cases as specified in the notice to try (i) any offense punishable under this Act and (ii) any conspiracy to commit or any attempt to commit or any abetment of any of the offenses specified in this Act.

Furthermore, under this Act, there shall be no appeal by a person convicted in any case tried summarily under this section, where the Special Judge passes a sentence of imprisonment not exceeding one month and a fine not exceeding two thousand rupees.

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Definition of “Public Servant”

A very important aspect of “The Prevention of Corruption Act” is the definition of “public servant”, which comprises the entire list set out below:

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DEFINITION OF “PUBLIC SERVANT” IN INDIA

1. any person in the service or pay of the Government or remunerated by the Government by fees or commission for the performance of any public duty;

2. any person in the service or pay of a local authority;

3. any person in the service or pay of a corporation established by or under a Central, Provincial or State Act, or an authority or a body owned or controlled or aided by the Government or a Government company as defined in section 617 of the Companies Act, 1956;

4. any Judge, including any person empowered by law to discharge, whether by himself or as a member of any body of persons, any adjudicatory functions;

5. any person authorised by a court of justice to perform any duty, in connection with the administration of justice, including a liquidator, receiver or commissioner appointed by such court;

6. any arbitrator or other person to whom any cause or matter has been referred for decision or report by a court of justice or by a competent public authority;

7. any person who holds an office by virtue of which he is empowered to prepare, publish, maintain or revise an electoral roll or to conduct an election or part of an election;

8. any person who holds an office by virtue of which he is authorized or required to perform any public duty;

9. any person who is the president, secretary or other office-bearer of a registered co-operative society engaged in agriculture, industry, trade or banking, receiving or having received any financial aid from the Central Government or a State Government or from any corporation established by or under a Central, Provincial or State Act, or any authority or body owned or controlled or aided by the Government or a Government company as defined in section 617 of the Companies Act, 1956;

10. any person who is a chairman, member or employee of any Service Commission or Board, by whatever name called, or a member of any selection committee appointed by such Commission or Board for the conduct of any examination or making any selection on behalf of such Commission or Board;

11. any person who is a Vice-Chancellor or member of any governing body, professor, reader, lecturer or any other teacher or employee, by whatever designation called, of any University and any person whose services have been availed of by a University or any other public authority in connection with holding or conducting examinations;

12. any person who is an office-bearer or an employee of an educational, scientific, social, cultural or other institution, in whatever manner established, receiving or having received any financial assistance from the Central Government or any State Government, or local or other public authority.

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Offenses Typified by the Prevention of Corruption Act

We now move on to the main offenses typified by the Act:

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OFFENSE RELATING TO PUBLIC SERVANT BEING BRIBED.

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 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. obtains or accepts or attempts to obtain, an undue advantage from any person as a reward for the improper or dishonest performance of a public duty or for forbearing to perform such duty either by himself or another public servant; or

c. performs or induces another public servant 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.

Penalty: imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine.

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With regard to the aforementioned offense, it is clear that Indian law also penalizes public servants — what is commonly referred to as passive corruption. This occurs when public servants benefit from bribes in order to provide undue advantages to individuals using their official positions. In fact, whether the public servant receives the bribe directly or through a third party is irrelevant under the law.

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TAKING UNDUE ADVANTAGE TO INFLUENCE PUBLIC SERVANT BY CORRUPT OR ILLEGAL MEANS OR BY EXERCISE OF PERSONAL INFLUENCE.

Whoever accepts or obtains or attempts to obtain from another person for himself or for any other person any undue advantage as a motive or reward to induce a public servant, by corrupt or illegal means or by exercise of his personal influence to perform or to cause performance of a public duty improperly or dishonestly or to forbear or to cause to forbear such public duty by such public servant or by another public servant.

Penalty: imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine.

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This additional classification complements the offense of passive corruption, where officials may seek to obtain or attempt to obtain benefits — whether for themselves or for others — resulting from bribery.

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OFFENSE RELATED TO BRIBERING OF A PUBLIC SERVANT

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,

Penalty: imprisonment for a term which may extend to seven years or with fine or with both.

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Here, we can already discern the typification of active corruption. If the agent is a legal entity, it is also subject to punishment in the form of a fine. Importantly, whether the act of corruption is committed directly or by third parties is irrelevant, as the legislation will penalize both scenarios. On the other hand, the agent engaged in active corruption has an affirmative defense that can exempt them from the penalty. Specifically, if the agent is obliged to grant an undue advantage and promptly reports the matter to law enforcement authorities or investigative agencies within a period of seven days from the granting of the bribe, they may be exempted from punishment.

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OFFENCE RELATING TO BRIBING A PUBLIC SERVANT BY A COMMERCIAL ORGANIZATION

Where an offense under this Act has been committed by a commercial organization, such organization shall be punishable with fine, if any person associated with such commercial organization gives or promises to give any undue advantage to a public servant intending (a) to obtain or retain business for such commercial organization; or (b) obtain or maintain an advantage in conducting business for that company.

Penalty: fine.

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The concept of “commercial organization” for the above offense encompasses both Indian companies, which operate within or outside India, and foreign companies, which commit the said offense in any part of Indian territory. It is equally irrelevant whether the person responsible for the act of bribery is an employee or a third party acting on behalf of the company.

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PERSON IN CHARGE OF COMMERCIAL ORGANIZATION TO BE GUILTY OF OFFENSE

Where an offense under section 9 is committed by a commercial organization, and such offense is proved in the court to have been committed with the consent or connivance of any director, manager, secretary or other officer shall be of the commercial organization, such director, manager, secretary or other officer shall be guilty of the offense and shall be liable to be proceeded against.

Penalty: imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine.

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For the purposes of the above offense, the term “director” extends to include the concept of a “partner” as well.

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PUBLIC SERVANT OBTAINING UNDUE ADVANTAGE, WITHOUT CONSIDERATION FROM PERSON CONCERNED IN PROCEEDING OR BUSINESS TRANSACTED BY SUCH PUBLIC SERVANT

Whoever, being a public servant, accepts or obtains or attempts to obtain for himself, or for any other person, any undue advantage without consideration, or for a consideration which he knows to be inadequate, from any person whom he knows to have been, or to be, or to be likely to be concerned in any proceeding or business transacted or about to be transacted by such public servant, or having any connection with the official functions or public duty of himself or of any public servant to whom he is subordinate, or from any person whom he knows to be interested in or related to the person so concerned.

Penalty: imprisonment for a term which shall be not less than six months but which may extend to five years and shall also be liable to fine.

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In the context of this offense, we find another variation of the classification of passive corruption.

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PUNISHMENT FOR ABETMENT OF OFFENCES

Whoever abets any offense punishable under this Act, whether or not that offense is committed in consequence of that abetment.

Penalty: imprisonment for a term which shall not be less than three years, but which may extend to seven years and shall also be liable to fine.

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Here, the Indian legislator makes it clear that complicity does not mitigate the criminal conduct committed by the complicit offender.

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CRIMINAL MISCONDUCT BY A PUBLIC SERVANT

A public servant is said to commit the offense of criminal misconduct,

(a) if he misappropriates or otherwise converts to his own use, dishonestly or fraudulently, any property entrusted to him or any property under his control as a public servant or permits any other person to do so; or

(b) If he intentionally enriches himself illicitly during the period of his term of office.

Penalty: imprisonment for a term which shall be not less than four years but which may extend to ten years and shall also be liable to fine.

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This offense is similar to the offense of embezzlement and also misconduct in public office in Brazil. It is important to highlight that if an attempt is made, but not completed, the sentence is reduced to imprisonment for a period of no less than two years, but which can reach five years, in addition to a fine. If, on the other hand, the offense is committed again, the penalty will be increased to imprisonment for a period of not less than five years, but which may reach ten years, in addition to a fine.

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Authorities Responsible for Investigations

Investigations must be conducted based on the location where the infractions occur:

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Additionally, when necessary, the investigating officer (being a police officer below the rank of Superintendent of Police) may inspect any bank books or accounting records in banks or financial institutions, if there is sufficient reason to believe that the offense may have occurred, and no authorization from a judge is required for such inspections.

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Seizure and Attachment of Assets

If a law enforcement official (not below the rank of Deputy Superintendent of Police) from the Anti-Corruption Department investigating an offense committed under this law has reason to believe that any property in relation to which an investigation is being conducted was acquired through criminal misconduct, they should, with the prior written approval of the Director of the Anti-Corruption Department, issue an seizure order for such assets. When it is not possible to seize such assets, the authority should issue an attachment order, stipulating that such assets should not be transferred or otherwise dealt with, except with the prior permission of the authority that issued such order.

The Special Court, to determine the confiscation of someone's assets, must previously issue a written notice informing the individual of the reasons why it proposes to confiscate such assets. This person will have the opportunity to make a written statement, within a reasonable time, as specified in the notice, against the reasons for the confiscation. On the other hand, the confiscation order, if any, will not prevent the imposition of any other punishment on the offender.