PREVENTION

OF
CORRUPTION
ACT, 1988
Submitted by: Vaibhav Garg
Institute: University Institute of Legal
Studies, Chandigarh University
Mohali.
Year of Study: 3rd year
What is Corruption?

Corruption is dishonest behaviour by those in positions of power, such as managers

or government officials. Corruption can include giving or accepting bribes or
inappropriate gifts, double dealing, under-the-table transactions, manipulating
elections, diverting funds, laundering money and defrauding investors. Corruption
may include many activities including bribery and embezzlement, though it may
also involve practices that are legal in many countries. Political corruption occurs
when an office-holder or other governmental employee acts in an official capacity
for personal gain.

Corruption can occur on different scales. Corruption ranges from small favours
between a small number of people (petty corruption), to corruption that affects the
government on a large scale (grand corruption), and corruption that is so prevalent
that it is part of the everyday structure of society, including corruption as one of the
symptoms of organized crime. Corruption and crime are endemic sociological
occurrences which appear with regular frequency in virtually all countries on a
global scale in varying degree and proportion. Individual nations each allocate
domestic resources for the control and regulation of corruption and crime.
Strategies to counter corruption are often summarized under the umbrella
term anti-corruption.

Corruption thus inhibits economic growth and affects business operations,

employment and investments. It also reduces tax revenue and the effectiveness of
various financial assistance programs. There also does not exist an unambiguous
answer as to how deal with corruption.
PREVENTION OF CORRUPTION ACT, 1988

An Act to provide for the establishment of a Directorate on Corruption and

Economic Crime, to make provision for the prevention of corruption and confer
power on the Directorate to investigate suspected cases of corruption and economic
crime and matters connected or incidental thereto.

 The Act covers the offence of giving a bribe to a public servant under
abetment. The Bill makes specific provisions related to giving a bribe to a
public servant, and giving a bribe by a commercial organization.
 The Act redefines criminal misconduct to only cover misappropriation of
property and possession of disproportionate assets.
 The Act modifies the definitions and penalties for offences related to taking
a bribe, being a habitual offender and abetting an offence.
 Powers and procedures for the attachment and forfeiture of property of
public servants accused of corruption.

The Act extends to whole of India except the State of Jammu and Kashmir.

Section 19: Previous sanction necessary for prosecution

1) No court shall take cognizance of an offence punishable under section 7, 10,

11, 13 and 15 alleged to have been committed by a public servant, except
with the previous sanction-:
a) In the case of a person who is employed in connection with the affairs
of the Union and is not removable from his office save by or with the
sanction of the Central Government, of that Government;
b) in the case of a person who is employed in connection with the affairs
of a state and is not removable from his office save by or with the
sanction of the State Government, of that government;
 c) in the case of any other person, of the authority competent to remove
him from his office.
2) Where for any reason whatsoever any doubt arises as to whether the
previous sanction as required under sub-section (1) should be given by the
Central Government or the State Government or any other authority, such
sanction shall be given by that Government or authority which would have
been competent to remove the public servant from his office at the time
when the offence was alleged to have been committed.
3) Notwithstanding anything contained in the code of Criminal Procedure,
1973-,
a) No finding, sentence or order passed by a special Judge shall be
reversed or altered by a Court in appeal, confirmation or revision
on the ground of the absence of, or any error, omission or
irregularity in, the sanction required under sub-section (1), unless
in the opinion of that court, a failure of justice has in fact been
occasioned thereby;
b) no court shall stay the proceedings under this Act on the ground of
any error, omission or irregularity in the sanction granted by the
authority, unless it is satisfied that such error, omission or
irregularity has resulted in a failure of justice;
c) no court shall stay the proceedings under this Act on any other
ground and no court shall exercise the powers of revision in
relation to any interlocutory order passed in any inquiry, trial,
appeal or other proceedings.
4) In determining under sub-section (3) whether the absence of, or any error,
omission or irregularity in, such sanction has occasioned or resulted in a
failure of justice the court shall have regard to the fact whether the objection
could and should have been raised at any earlier stage in the proceedings.
Explanation of the Section:

The section obligates previous sanction necessary from the competent authority for
prosecution of offences committed by public servants under the said Act. Previous
sanction is mandatory only for prosecution and not for initiating
investigation/inquiry. Also, it is restricted only to public servants. Retired servants
with impeccable integrity and a fine trackrecord of possession robust decision
making abilities have suffered the brunt of lack of protection under the law. There
have been instances too where unsustainable inquiries/investigations have been
initiated against public servants- serving and post retirement on account of false
complaints/allegations. In such cases, previous sanction for prosecution arrives; the
damage has already been done to the image and reputation of a public servant by
the initiation of a preliminary enquiry or regular case.

Need and importance:

The provision aims to balance two competing interests. One is the need to ensure
that an honest public servant is not hounded in the performance of his or her duties
by frivolous complaints.

Landmark Judgements
 I. Anil Kumar and Ors. Vs. M.K. Aiyappa and Anr1

Facts- The appellant appealed before the SC for the reason that whether the
special judge has the jurisdiction to give the decision on the case under Sec 19
of the prevention of corruption Act.

Held- SC held that the law on the issue of sanction can be summarised to the
effect that the question of sanction is of paramount importance for protecting a
public servant who has acted in good faith while performing his duty.

II. Asst. Commissioner Vs. Velliappa Textiles Ltd2

Held- SC held that the grant of sanction is only an administrative function,

though it is true that the accused may be saddled with the liability to be
prosecuted in a court of law. The grant of sanction, therefore being
administrative acts the need to provide an opportunity of hearing to the accused
before according sanction does not arise.

III. C.B.I v. Ashok Kumar Aggarwal,3

Held- SC observed that the Sanction lifts the bar for prosecution. Therefore it is
not an acrimonious exercise but a solemn and sacrosanct act which affords
protection to Government servant under frivolous prosecution. The court held
that the power to grant a sanction is to be exercised strictly keeping in mind the
public interest and the protection available to the accused against whom the
sanction is sought.

1 2013X AD S.C. 386

2 2003 132TAXMAN 165 SC
3 AIR 2014 SC 827
IV. Abhay Singh Chautala Vs. C.B.I4

Held- SC held that the High Court was absolutely right in relying on the decision
in Prakash Singh Badal Vs. State of Punjab to hold that the Appellants in both the
appeals had abused entirely different office or offices that the one which they were
holding on the date on which cognizance was taken and, therefore, there was no
necessity of sanction under Sec 19 of the Act.

Section 20: Presumption where public servant accepts gratification other than
legal remuneration

1. Where, in any trial of an offence punishable under section 7 or section 11 or

clause (a) or clause (b) of sub-section (1) of section 13 it is proved that an
accused person has accepted or obtained or has agreed or attempted to obtain
for himself, or for any other person, any gratification or any valuable thing
from any person, it shall be presumed unless the contrary is proved, that he
accepted or obtained or agreed to accept or attempted to obtain that
gratification in section 7 or, as the case may be, without consideration or for
a consideration which he knows to be inadequate.
2. Where in any trial of an offence punishable under section 12 or under clause
(b) of section 14, it is proved that any gratification or any valuable thing has
been given or offered to be given or attempted to be given by an accused
person, it shall be presumed, unless the contrary is proved, that he gave or
offered to give or attempted to give that gratification or that valuable thing,
as the case may be, as a motive or reward such as is mentioned in section 7,
or, as the case may be, without consideration or for a consideration which he
knows to be inadequate.

4 2011 (2) ACR 2252 SC

3. Notwithstanding anything contained in sub-section (1) and (2), the court
may decline to draw the presumption reffered to in either of the said sub-
sections, if the gratification or thing aforesaid is, in its opinion, so trivial that
no inference of corruption may fairly be drawn.

Meaning and Explanation:

Presumption under this clause is limited to a few sections and not applicable to
the whole Act. The court can draw presumption under this section for an
offence under section 7. The provision of section 7 is related to Public servant
taking gratification other than legal remuneration in respect of an official act.
The plain meaning of this section is demand of illegal gratification or bribe and
an attempt to obtain the same. More clearly a demand for bribe or illegal
gratification for showing or forbearing to show or for doing a favour or
disfavour or rendering or attempting to render a service or disservice to any
person as a motive or reward for doing or forbearing to do any official act.

Presumption under section 20 is as stated earlier is limited to sections 7, 11 and

13(1) (a) and (b) of the Act only. The presumption raised under section 4 (now
section 20 of the New Act) is a presumption of law, which the court is bound to
draw, once it is proved that the accused Public Servant received or obtained a
valuable thing in the circumstances mentioned in the section. It is the duty of
the prosecution to first prove the basic facts on which the prosecution rests,
before placing reliance in the presumption. Unless that is dine this legal
presumption cannot be invoked.

Section 20 presumption arises as soon as the prosecution has proved that the
accused person has accepted or obtained, or has agreed to accept or attempted
to obtain, for himself or for any other person provided that in the former case it
 has further proved that such gratification was accepted or obtained, or agreed to
be accepted or attempted to be obtained, by way of legal remuneration.

Landmark Judgements

I. C.M. Girish Babu Vs. CBI, Cochin, High Court of Kerala5

Held- The court held that it is equally well settled that the burden of proof
placed upon the accused person against whom the presumption is made under
Section 20 of the Act is not akin to that of burden placed on the prosecution to
prove the case beyond a reasonable doubt.

Section 21: Accused person to be a competent witness

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

Provided that-

a. He shall not be called as a witness except at his own request;

b. His failure to give evidence shall not be made the subject of any comment
by the prosecution or give rise to any presumption against himself or any
person charged together with him at the same trial;
c. He shall not be asked, and if asked shall not be required to answer, any
question tending to show that he has committed or been convicted of any
offence other than the offence with which he is charged, or is of bad
character, unless-

5 2009 3 SCC 779

 i. The proof that he has committed or been convicted of such offence is
admissible evidence to that he is guilty of the offence with which he is
charged, or
ii. He has personally or by his pleader asked any question of any witness for
the prosecution with a view to establish his own good character, or has
given evidence of his good character, or the nature or conduct of the
defence is such as it involve imputations on the character of the
prosecution or of any witness for the prosecution, or
iii. He has given evidence against any other person charged with the same
offence.

Meaning and explanation

According to this section, a person who is charged with the offence

punishable under this Act is competent to give evidence on the charges put
against him or any other person charged with him in same trial. He may give
evidence on oath on disproof of charges. Provided- that he cannot be a
witness except at his own request. The failure to give any evidence shall not
be open to any comment by the prosecution or to give rise to any
presumption against himself or any other person charged together for the
offence in the same trial. He shall not be asked and if asked, it shall not be
obligatory to him to answer any questions relating to other offences for
which he has been convicted other than the offences which he has been
charged is of bad character.