Offering gifts to Public Servants is an act which might call for interference with the provisions of the Prevention of Corruption Act, 1988 (“Act”). Many companies grapple with whether they should be offer gifts to Public Servants as a gesture of celebration during festivals. It is pertinent to note that the concern involved might be looked at from different perspectives. The leitmotif of this piece is to only provide a picture from the standpoint of the Act.
The Act was enacted to eradicate corruption. Section 2 (c) of the Act provides for an elaborate definition of the term “Public Servant”. The definition of the term “Public Servant” has time and again been under wide judicial interpretation. Interestingly, the Act does not define the term bribe, gift or gratification. Instead, the it uses the terminology ‘undue advantage’. The term ‘undue advantage’ is defined under section 2(d) which means “any gratification whatever, other than legal remuneration”. The term “gratification” is not limited to pecuniary gratifications or to gratifications estimable in money. The expression “legal remuneration” is not restricted to remuneration paid to a public servant but includes all remuneration that the public servant is permitted by the Government or the organisation, which he serves, to receive. Therefore, any gift to a Public Servant can qualify as an undue advantage given to him.
Section 7 of the Act provides for punishment to a Public Servant for accepting bribe. The Section provides that obtaining or accepting or attempting to obtain “undue advantage” from any person as a reward or with an intention to perform or cause performance of a public duty improperly or dishonestly or to forbear the performance of any such duty would amount to a punishable offence. It further provides that if a public servant abets any other public servant to perform the aforesaid acts, the said public servant would be liable under the provisions of Section 7. The explanation to Section 7 provides that the act of obtaining or accepting or attempting to obtain any “undue advantage” shall by itself constitute an offence, even if the performance of the public duty by the public servant is not or has not been improper. Thus, the explanation makes it clear that, whether the public servant has discharged the duty improperly or not, he can be prosecuted, if he has obtained or attempted to obtain any undue advantage for the discharge of his official duty.
The Act further provides for the punishment of any person who commits the offence of bribing a public servant. Section 8 of the Act states that any person who gives or promises to give an undue advantage to other person/persons with an intention to induce a public servant to perform improperly, a public duty or to reward such public servant for such improper performance shall be punished with imprisonment or with fine or with both. Further, Section 9 of the Act deals with an offence relating to bribing a public servant by a commercial organization. Under the Section, a commercial organization not only includes a company or partnership incorporated in India and carrying on business in India or outside India, but also a body or partnership incorporated or formed outside India but carrying on business in India. Moreover, Section 9 makes the commercial organization guilty and punishable with a fine if any person(s) associated with them gives/promises to give any undue advantage with the intent to:
- Obtain/retain any business, or
- Obtain/retain an advantage in the conduct of business for such a commercial organization.
It is pertinent to note that, under Section 9, it shall be a defence for the commercial organization to prove that it had in place adequate procedures for the compliance of such guidelines as may be prescribed to prevent persons associated with it from undertaking such conduct.
Section 10 of the Act provides that a person in charge of a commercial organization who has committed an offence under section 9 of the Act shall be guilty of the offence and shall be liable to be proceeded against. That is to say that when an offence under Section 9 of the Act is committed by a commercial organization and such offence is proved in the Court to have been committed with the connivance of any director, manager, secretary or another officer of the commercial organization; such director, manager, secretary or another officer shall be guilty of the offence and shall be liable to be proceeded against and shall be punishable with 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 a fine.
Having understood the conspectus of sections, it is pertinent to note that gifts given to a public servant might be considered as “undue advantage” under Section 2 (d) of the Act. The term “undue advantage” has been defined in a broad manner under the Act to mean any gratification, other than the entitled legal remuneration. Therefore, gifts which do not form part of the legal remuneration of a Public Servant could be held as an “undue advantage”. In such a case, both the person giving such undue advantage and the Public Servant accepting such undue advantage might be booked under the provisions of the Act. Therefore, in this regard that when it comes to criminal prosecution, both mens rea and actus reus are important to be established. Even if the intention of the person giving such gifts was not to gain any undue benefits from the Public Servant, in deviation of his duty, that would have to be established before a Court of law. Lack of intention would not stop the State authorities to initiate an action under the provisions Act.
Therefore, both people giving gifts to Public Servants and Public Servants accepting gifts are to be cautious of its legal implications.
The term “undue advantage” has been defined in a broad manner under the Act to mean any gratification, other than the entitled legal remuneration. Therefore, gifts which do not form part of the legal remuneration of a Public Servant could be held as an “undue advantage”. In such a case, both the person giving such undue advantage and the Public Servant accepting such undue advantage might be booked under the provisions of the Act. Therefore, in this regard that when it comes to criminal prosecution, both mens rea and actus reus are important to be established.