Relief from witch hunt

The Prevention of Corruption Act is vague on 'intent'

The amended Prevention of Corruption Act (PCA), cleared by Parliament on Tuesday, seeks to strike a balance between the obvious need to tackle corruption by booking the guilty and protect honest government officials from harassment. The passage of the Bill comes at a time when there are many high profile cases of current and former bankers being arrested for extending loans that went bad later. The concern was that these bankers were held guilty for genuine commercial decisions that might have gone wrong because of external factors. The amendments thus are expected to stop the witch hunt by investigative agencies.

While it is obvious that there should not be laxity in prosecution in cases of wilful misconduct, there were growing apprehensions that arbitrary actions by agencies paralysed the banking sector as officers were scared of taking decisions for fear of being harassed even years after their retirement. There have been instances where cases have dragged on for more than a decade. This fear greatly limited the bankers’ ability to take decisions on restructuring of loans, haircuts or further financing of stressed companies. The number of bank officials who have either been booked by law enforcement agencies or are facing charges is reported to have risen to 50 over the last four months. As a result, bank credit to new businesses has taken a knock.

There are four key amendments to the PCA. The first one is aimed at shielding government officials, even the retired ones, from prosecution by making it mandatory for an investigating agency such as the Central Bureau of Investigation (CBI) to take prior approval from the concerned competent authority even before conducting an inquiry. Earlier, this provision was available only for officials above the joint secretary rank. Of course, this protection will not apply to officials in the case of on-the-spot arrests on charges of accepting or attempting to accept any undue advantage for himself. The second change is to limit the deadline for deciding corruption cases to a maximum of two years. Both these changes are welcome as they will protect honest officials from either being drawn into a case without a just cause or being harassed endlessly as the case drags on.

The law also punishes both the bribe giver as well as the bribe taker. This is important as earlier the bribe giver got away by just paying a penalty. One of the significant amendments is the definition of ‘criminal misconduct’ under Section 13 of the Act. The courts interpreted the “abuse of position to obtain pecuniary advantage to himself or any other person” so widely that any act of a public servant could be interpreted as a benefit to someone. The definition has now been narrowed down to only two offences — misappropriation of entrusted property and amassing assets disproportionate to known sources of income. In the process, however, the government has introduced an element of subjectivity by bringing in the issue of “intent”. The question is how does one establish ‘intention’ with certainty? This can make it more difficult to establish guilt and provide an escape route to many officials.