In a major legislative step that could allow bankers and public servants to unburden themselves of the fear of the four Cs — courts, CBI, CVC and CAG — as they take bona fide decisions in good faith, Parliament has approved a clutch of amendments to the three-decade-old Prevention of Corruption Act (PCA).
With the Lok Sabha clearing the relevant Bill on Tuesday (the Upper House had approved these last Thursday), investigating agencies will have to get prior sanction of the appropriate authority in government to probe officials, including retired ones. Another key change is that “criminal misconduct” will now only cover misappropriation of property and possession of assets disproportionate to income. Also, not just possession of disproportionate assets, but an officer’s intention to acquire such assets should be proved for accusing him/her for criminal misconduct.
The changes would mean that instances like the recent conviction of former coal secretary HC Gupta in a coal block allotment case might not recur. Also, economic decision-making as well as commercial decisions by banks and public sector enterprises could gather speed, aiding investments and economic growth.
The amended PCA also seeks to punish bribe givers for the first time, with a provision to jail them for up to seven years.
The amendments come at a time when promoters of dozens of companies — from Nirav Modi and Mehul Choksi to Vikram Kothari — have been accused of defrauding the banks of thousands of crores of rupees, raising suspicion about possible collusion of some bankers in the frauds.
In a recent blog, Union minister Arun Jaitley had suggested an urgent amendment to the “anarchic” law, apart from advising that the federal structure of the nation must not be overlooked. Earlier, he had said the law that dates to the pre-liberalisation era puts officials at the risk of being charged with corruption, possibly overlooking their bona fide intent. His statements came after the entire top management of the state-run Bank of Maharashtra was placed under arrest by Pune police.
Analysts said under the extant law, even offering a pecuniary gain can constitute a criminal misconduct. Some may argue that a loan given to a company in the past could be defined as providing pecuniary benefit.
Dozens of cases have already been filed against senior executives of some of the public-sector banks.
Hitherto, the PCA has defined criminal misconduct to cover offences including abuse of position, use of illegal means and disregard of public interest. For the bribe takers, the bill cleared on Tuesday proposes to increase the punishment to a minimum of three years of imprisonment, which may extend to seven years, besides fine.
In a bid to protect persons who give bribe under coercion, the amended law has provided that “the person so compelled” would have to report the matter to the law enforcement authority or investigative agency within seven days.
The changed law also includes commercial organisation into its ambit. “A commercial organisation shall be guilty of an offence and shall be punishable with fine if any person associated with the commercial organisation, gives or promises to give, any undue advantage to a public servant,” it said. “The Special Judge shall ensure the completion of the trials within a period of two years from the date of filing of the case,” it said.