PREVENTION OF CORRUPTION ACT, 1988

The term ‘Corruption’ is derived from the Latin word “corruptus” meaning “destroy or broken”.
Corruption is dishonest behaviour by those in positions of power. It starts with the tendency of
using public office for some personal benefit.

The word corruption is very comprehensive in its meaning. It implies all the activities which are
against the law and society. It affects morality. Its scope is very wide and includes all spheres of
life.

According to Stroud’s Judicial Dictionary, “ Corruption” means moral obliquity or moral

perversity. But according to Dr. P. Ramanath Aiyar’s definition, Corruption is something against
the law, something forbidden by law, it is an act or intent to gain advantage not consistent with
official duty and rights of the others.
Prevalence of corruption is one of the problems which our country has been facing from time
immemorial. Corruption retards our country’s growth and welfare to the maximum extent.

Corruption is termed as a plague which is not only contagious but if not controlled spreads like
a fire in a jungle. Its virus is compared with HIV leading to AIDS, being incurable. It has also
been termed as royal thievery. The socio-political system exposed to such a dreaded
communicable disease is likely to crumble under its own weight. Corruption is opposed to
democracy and social order, being not only anti-people, but aimed and targeted against them. It
affects the economy and destroys the cultural heritage. Unless nipped in the bud at the earliest, it
is likely to cause turbulence-shaking of the socio-economic-political system in an otherwise
healthy, wealthy, effective and vibrating society [State of M.P. v. Ram Singh, (2000)]

The present scenario of corruption in India has been depicted by Justice A.K. Ganguli in
Subramanian Swami v. Dr. Manmohan Singh, in following words:
“Today corruption in our country not only poses a grave danger to the concept of
constitutional governance, it also threatens the very foundation of Indian Democracy and
the Rule of Law. The magnitude of corruption in our public life is incompatible with the
concept of socialist, secular, democratic republic. It cannot be disputed that where
corruption begins, all rights end. Corruption devalues human rights, checks development
and undermine justice, liberty, equality, fraternity which are the core values of our
Preamble. Therefore, the duty of the court is that any anti-corruption law has to be
interpreted and worked out in such fashion as to strengthen the fight against corruption”.

The Supreme Court of India in J. Jayalalitha v. Union of India, has held that
“Corruption corrodes the moral fabric of the society and corruption by public servant not
only leads to the corruption of the moral fabric of the society but is also harmful to the
national economy and national interest, as the person occupying high posts in
government by misusing their powers due to corruption can cause considerable damage
to the national economy, national interest and image of the country”

GENESIS OF THE ACT

 • Regulation of corruption in some form or the other has a long history in India.
• The first law broadly dealing with corruption and the attachment of property was a pre
independence, war time ordinance called the Criminal Law (Amendment) Ordinance,
1944 (Ordinance No. XXXVIII of 1944). It was enacted under the Government of India
Act, 1935 to prevent the disposal or concealment of property procured by means of
certain scheduled offences, including offences under the Indian Penal Code.
• The Indian Penal Code also dealt with the offenses of bribery and corruption in cases of
Public Servant.
• But during the 1945s it came into notice that the then-existing law was not adequate to
meet the exigencies and a need was felt to introduce special legislation to eradicate
bribery and corruption. It was thus that the Prevention of Corruption Act, 1947 was
enacted for the first time .
• The 1947 Act was later amended at two instances by the Criminal Law Amendment Act,
1952 and by the Anti-Corruption Laws (Amendment) Act, 1964 based on the
recommendations of the Santhanam Committee.
• The 1947 Act declared corrupt acts offences as taking bribe, misappropriation, obtaining
a pecuniary advantage, possessing assets disappropriate to income, and abusing official
position. However, the authority for prosecution was vested only in the department
authorities and not in the Central Bureau of Investigation (CBI).
• The 1947 Act became a pilot to the Prevention of Corruption Act, 1988 which came in
force on 9th September 1988. It incorporated the Prevention of Corruption Act, 1947, the
Criminal Law Amendment Act, 1952, and Section 161 to 165-A of the Indian Penal Code
with modifications, enlarged the scope of the definition of the expression 'Public Servant'
and amended the Criminal Law Amendment Ordinanc,1944. It was aimed at making anti-
corruption laws more effective by widening their coverage and by strengthening the
provisions to make the overall statute more effective.
• The 1988 Act enlarged the scope of the term ‘public servant’ and included a large
number of employees within its ambit. Besides the employees of the central government
and the union territories, the employees of public undertakings, nationalized banks,
office-bearers of cooperative societies of the central and the state government receiving
financial aid, employees of the University Grants Commission (UGC), vice chancellors,
professors, and scientists in institutions receiving financial aid from the central or state
governments or even from the local authorities have all been declared as public servants.

OBJECT OF THE ACT

 As laid down in the preamble, the Act is enacted to consolidate and amend law relating to
prevention of corruption. It is intended to make corruption laws more effective by
widening their coverage and strengthening provisions.
 It was held in Govt. of A.P. v. P. Venku Reddy, (2002), The Prevention of Corruption
Act, 1988 was brought into force with the avowed purpose of effective prevention of
bribery and corruption.
 It seeks to provide for speedy trial in public interest
 It is enacted with the purpose of tracking down corrupt public servants and punishing
them [Subramanian Swamy v. CBI, (2014)]
IMPORTANT DEFINITIONS

S. 2(b) “public duty” means - a duty in the discharge of which the State, the public or the
community at large has an interest.

Explanation- State includes 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 S. 617 of the Companies Act, 1956 .
This definition may be extended to semi-Government authorities, bodies and their Departments
where the employees are entrusted with public duty. [Dadaji v. State of Maharashtra , 2016]

S. 2(c) “public servant” means—

1. Any individual employed by the government, receiving government compensation, or

receiving fees or commissions from the government for the performance of any public
obligation;
2. Any individual who works for or is compensated by a local government;
3. Any employee of a firm created by or operating under a Central, Provincial, or State
Act, as well as any authority, body, or company owned, controlled, or assisted by the
Government, as defined in section 617 of the Companies Act, 1956.
4. Any Judge, as well as anyone permitted by law to carry out adjudicatory duties on their
own or as a part of any group of people;
5. Any individual designated as a liquidator, receiver, or commissioner by a court of
justice with the authority to carry out any function related to the administration of
justice;
6. Any arbitrator or other individual to whom any issue or subject has been submitted by a
court of justice or by a competent public authority for judgement or report;
7. Any person who occupies a position that gives him the authority to conduct an election
or a portion of an election, or to compile, publish, maintain, or update an electoral roll;
8. Any individual holding a position that allows or obligates them to carry out public
duties;
9. Anyone serving as the president, secretary, or other office-holder of a registered
cooperative society engaged in agriculture, industry, trade, or banking who is currently
receiving or has previously received financial aid from the Central Government, a State
Government, or from any corporation created by or operating under a Central,
Provincial, or State Act, as well as any authority or body owned, controlled, or assisted
by the Government or a Government company as defined in Section 617 of the
Companies Act, 1956
10. Any individual who serves as the chairman, a member, or an employee of any Service
Commission or Board, regardless of its name, or a member of any selection committee
 chosen by the Commission or Board to conduct any examinations or make any
selections on its behalf;
11. Any Vice-Chancellor, member of a governing body, professor, reader, lecturer, or other
teacher or employee of any university, regardless of their title, as well as any individual
whose services have been used by a university or another public authority in
connection with the holding or conducting of exams;

A “deemed university”, falls within the ambit of the term “university” under
Section 2(c)(xi) and its officials, fall within definition of “public servant” under
the PC Act, 1988 [State of Gujarat v. Mansukhbhai Kanjibhai Shah, (2020)]

12. Any official or employee of an educational, scientific, social, cultural, or other

institution, regardless of how it was founded, who is receiving or has previously received
financial support from the Central Government, any State Government, a local
government, or other public authority.

Explanation 1.—Persons falling under any of the above sub-clauses are public servants, whether
appointed by the Government or not.

Explanation 2.—Wherever the words “public servant” occur, they shall be understood of every
person who is in actual possession of the situation of a public servant, whatever legal defect there
may be in his right to hold that situation

Points to be noted
 Chairman/Managing Director or Executive Director of a private bank operating under
licence issued by RBI under Banking Regulation Act, 1949, holds an office and performs
public duty so as to attract definition of public servant for the purpose of PC Act, 1988.
However, such accused person cannot be said to be public servant within the meaning of
Section 21 IPC, as offence under Section 409 IPC may not get attracted [CBI v. Ramesh
Gelli, (2016)]
 The definition of “public servant” under Section 21 IPC, held, is of no relevance under
the Prevention of Corruption Act, 1988 [ State of Maharashtra v. Prabhakarrao,
(2002) and State of Maharasthra v. Laljit Rajshi Shah ]
 Member of Parliament is a “public servant” [P.V. Narasimha Rao v. State]

Sec 2(d) “undue advantage” means - any gratification whatever, other than legal remuneration.
Explanation.—
(a) “gratification” - not limited to pecuniary gratifications or to gratifications estimable
in money;
• (b) “legal remuneration” - not restricted to remuneration paid to a public servant, but
includes all remuneration which he is permitted by the Government or the organisation,
which he serves, to receive.