XII.

DOWN THE RABBIT HOLE OF

INDIA’S ANTI-CORRUPTION
PRACTICES

- Pragya Jain and Akshita Singh

ABSTRACT

White-Collar crime, first defined by Edwin Hardin Sutherland, has long since transcended the
contours drawn by the American sociologist. India, as an emerging leader in the Global South,
saw a decline in its ranking in the Corruption Perceptions Index, 2019 by Transparency
International. The trend is alarming as it comes in the aftermath of the amended anti-
corruption regime in the nation. The authors seek to particularly underline the peculiar
democratic and political circumstances of India as the fountainhead of problems that lack of
regulation and compliance bring about. Additionally, with almost zero protection afforded to
the whistle-blowers under the Act, India seems to have nourished a generalized legislative
framework that not only has inculcated fear in the minds of victims but also resulted in a poor
performance in the Transparency Index. Through the paper, the authors also strive to critically
analyse the ramifications of unregulated internal investigations and exemption of private
entities from the Prevention of Corruption Act, 1988. For the purpose of a detailed
understanding, the authors have first endeavoured to establish the preliminary premise of
corruption as a white-collar crime. Further, the authors furnish a thorough analysis of The
Prevention of Corruption Act, 1988 and the subsequent amendment and attempt to chalk out
the lacunae in the government’s claims of a flawless framework. The article is aimed at
exploring the gaps in the legislative regime of India through a comparative lens. The relevance
of the article remains in using the findings to mitigate the missing rungs of the Indian ladder
to a robust anti-corruption law.


Ms. Pragya Jain is a fourth-year student of B.A.LL.B. (Hons.) at the Hidayatullah National
Law University, Chhattisgarh. Ms. Akshita Singh is a third-year student of B.A.LL.B. (Hons.)
at the National Law University, Odisha.
2021] INDIA’S ANTI-CORRUPTION PRACTICES 271

Introduction ........................................ 271 Cross Jurisdictional Analysis ........... 283

Analysis of the Indian Legal Framework Taking the Lead: Germany ....... 284
on Corruption...................................... 275 Sweeping Cultural Reforms:
Violation of The Corporate Veil Australia .................................... 287
Principle .................................... 278 Know Thy Neighbour: Bhutan’s
Problems with Internal Outlook ..................................... 290
Investigation in Private Sector ..280 Conclusion .......................................... 292
Lack of Protection to the Whistle-
blowers ..................................... 281

I. INTRODUCTION

With democratic values and regimes across the globe being in a state
of flux, the increasing instances of white-collar crimes serve to frustrate the
trust of the masses. The term, first defined by Edwin Hardin Sutherland, has
long since transcended the contours drawn by the American sociologist.1
Sutherland endeavoured to define it as a “crime committed by a person of
respectability and high social status in the course of his occupation.”2 It is
abundantly evident that Sutherland’s outlook, termed as “offender-based
approach”, on this particular brand of crimes focused on several key aspects:
the social status of the criminal and the associated responsibility, occupational
context, violation of trust, magnitude of financial costs, and civil and
administrative violations. However, it must be noted that his views left a lot to
be desired and developed in terms of the scholarship on white-collar crimes.

Taking stock of the developments in the analysis of the term, due

regard must also be paid to Edelhertz’s “offence-based approach” which was
initially offered as a contrast to Sutherland’s idea and now presents itself as a

1
EDWIN H. SUTHERLAND, WHITE COLLAR CRIME 9 (NEW YORK: THE DRYDEN PRESS, 1949).
2
Id.
272 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

tool to broaden the understanding of white-collar crimes.3 Even though it is

sharply criticised for trivializing one of the key features of white-collar crimes
- social status of the offender - it serves to establish that the scope of white-
collar crimes is wider than what was envisioned by Sutherland.

The modern understanding of the term “white-collar crime” draws

lessons from both approaches. Some scholars remain inclined to the school
that it primarily refers to the acts of respected and powerful individuals and
organisations that are corrupt and exploitative. While the others refer to it as
an economic transgression, the operating principle behind it is deception.4

The central instrument for this article, the Corruption Perceptions

Index (“CPI”) by Transparency International, attempts to include abuse of
power and wrongful gain in its standards for corruption. It defines corruption
as “the abuse of entrusted power for private gain” and further classifies it into
three categories viz. grand, petty, and political.5 International organisations
such as the International Monetary Fund and the World Bank also present a
definition in consonance with Transparency International by characterising it
as “the abuse of public office for private gain.”6 The article underscores the
need to aid the incorporation of seasoned standards for anti-corruption
practices.

3
HERBERT EDELHERTZ, THE NATURE, IMPACT, AND PROSECUTION OF WHITE-COLLAR CRIME,
(U.S. GOVERNMENT PRINTING OFFICE, 1970).
4
MICHAEL L. BENSON ET AL., THE OXFORD HANDBOOK OF WHITE-COLLAR CRIME, (OXFORD
UNIVERSITY PRESS, 2016).
5
Together Against Corruption, TRANSPARENCY INTERNATIONAL (2015),
https://images.transparencycdn.org/images/TogetherAgainstCorruption_Strategy2020_EN.p
df.
6
Helping Countries Combat Corruption: The Role of the World Bank, (1997), WORLD BANK,
http://www1.worldbank.org/publicsector/anticorrupt/corruptn/corrptn.pdf
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 273

In pursuance of the objectives of this article, an amalgamation of the

two approaches is used to comprehend the commonly shared problem that the
world is facing - corruption. The United Nations Organisation has made
arduous yet continued efforts since 2000, when the General Assembly
recognised the need for an international instrument to combat corruption and
established an ad-hoc committee for negotiation of such an instrument.7 After
several years of deliberations, the United Nations Convention Against
Corruption (“UNCAC”) as adopted in 2004, is perhaps the only globally
acknowledged instrument that lays down comprehensive anti-corruption
measures, standards, and practices that all member countries can apply in
pursuance of creation of a framework to combat corruption. The Convention
aims to forge an expansive international alliance and calls for State Parties to
bring about stringent preventive and redressal measures in both public and
private sectors. While not defining corruption explicitly, the Convention seeks
to create higher standards of accountability and ethics at the global level so
that the State Party can legislate domestically.

The Global South East’s struggles with corruption are perhaps one of
the most well documented in the history of humankind.8 India, an emerging
voice in the subcontinent, has witnessed a litany of such instances where the
faith reposed by the public in offices that are expected to conform to higher
standards of integrity and ethics has been incredulously outraged. Incidents

7
G.A. Res. 55/61, An Effective International Legal Instrument Against Corruption (Dec. 4,
2000), GENERAL ASSEMBLY,
https://www.unodc.org/documents/commissions/CCPCJ/Crime_Resolutions/2000-
2009/2000/General_Assembly/A-RES-55-61.pdf.
8
Corruption Perceptions Index 2019, TRANSPARENCY INTERNATIONAL (2019),
https://images.transparencycdn.org/images/2019_CPI_Report_EN.pdf.
274 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

such as the Bofors Scam9 with its roots reaching up straight to the Prime
Minister's Office; or the Telgi Stamp Paper Scam,10 with the figures running
into over 200 Billion Rupees; or the ever-infamous CWG11 as unearthed by
the Central Vigilance Commission point to the simple undercurrent that the
disregard for the faith reposed by public runs deep in the bureaucratic vein.

The CPI by Transparency International is a globally recognised

instrument that gauges the extent of corruption in a country’s public sector.12
India’s performance in the Index can thus be perceived as a direct reflection
of the effectiveness of its anti-corruption regime. The nation’s ranking
previously under a freefall between 2010 to 2013, witnessed fluctuations in
the intermediate years until The Prevention of Corruption (Amendment) Act,
2018,13 (“Amendment”) was enacted to put the proverbial meat on the bones
of the anti-corruption system and to synchronise India's international
obligations that arose by virtue of its ratification of UNCAC in 2011.
Interestingly and quite unfortunately, the Amendment was not quite the end
of the troubles as the fall in India's ranking in the CPI, 2019 ushered in a rude

9
R.K. Raghavn, Bofors Scandal Is Example of Genuine Case Sabotaged by Party With Lot
To Hide: Former CBI Chief R K Raghavan, OUTLOOK,
https://www.outlookindia.com/website/story/india-news-bofors-scandal-is-example-of-
genuine-case-sabotaged-by-party-with-lot-to-hide-former-cbi-chief-r-k-raghavan/362654
(last visited Jan. 24, 2020)
10
PTI, Abdul Kareem Telgi: From a vegetable vendor to scam mastermind, THE ECONOMIC
TIMES (Oct. 26, 2017), https://economictimes.indiatimes.com/news/politics-and-
nation/abdul-kareem-telgi-from-a-vegetable-vendor-to-scam-
mastermind/articleshow/61248396.cms?from=mdr (last visited Jan. 24, 2020).
11
PTI, Day-to-day trial in CWG scam case as per Supreme Court verdict, THE HINDU,
https://www.thehindu.com/news/national/daytoday-trial-in-cwg-scam-case-as-per-supreme-
court-verdict/article5952846.ece (last visited Jan. 24, 2020).
12
Christopher Knaus, Australia's Global Corruption Ranking Sparks Urgent Calls for Federal
Integrity Body, THE GUARDIAN, (Jan. 29, 2019), https://www.theguardian.com/australia-
news/2019/jan/29/australias-global-corruption-ranking-sparks-urgent-calls-for-federal-
integrity-body.
13
INTERNATIONAL, supra note 8.
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 275

awakening. The regime in its current form is in need of fundamental systemic

changes.

India’s anti-corruption regime comprises a curious cocktail of

legislations that seek to address and mitigate the plague of corruption.14
However, the authors through this article undertook a pointed appraisal of The
Prevention of Corruption Act, 1988 (“POC Act”) and the Amendment along
with relevant provisions of The Whistle Blowers Protection Act, 2014. This
involved an evaluation of the POC Act as also the Amendment which
uncovered how they failed to be the umbrella solution to the plague of
corruption. The authors first present a three-pronged criticism of the anti-
corruption regime in the background of the prevailing peculiar institutional,
socio-economic, and political circumstances of India. The authors propose that
the key to clearing the murky waters of India’s practices lies in a comparative
analysis, and learnings from its contemporaries. Thus, the authors don the
comparative lens to examine the practices in other nations and carve out
unique solutions to India’s maladies.

II. ANALYSIS OF THE INDIAN LEGAL FRAMEWORK ON

CORRUPTION

Enacted with the aim of mitigating the alarming trends in India’s

corruption statistics, the POC Act sought to serve as a panacea to all the issues
ailing the anti-corruption regime.15 The POC Act operates to crack down on

14
MARK F MENDELSOHN, THE ANTI-BRIBERY AND ANTI-CORRUPTION REVIEW 158 - 162 (8th
ed. 2019).
15
Riya Chopra et al., White collar and Investigations: India & Globally, MONDAQ (Feb. 13,
2019), https://www.mondaq.com/india/white-collar-crime-anti-corruption-
fraud/780342/white-collar-and-investigations-india-and-globally (last visited Sept. 15, 2020).
276 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

public servants involved in corrupt practices and establishes the procedure to

prosecute and punish. It is pertinent to note that while the Act was a step in
the right direction, it was far from the all-encompassing statute that the nation
needed. The POC Act in its existing form needed sharper teeth and pointier
talons to bring defaulters to justice. Corrective efforts were thus made to
remedy both the offender-based (inclusion of commercial organisations, bribe
givers, and public officials) and the offence-based (time extension and
stringent punishments) aspects of the legislation.16 Thus, with an objective of
widening its scope, and tightening the contested knots of the anti-corruption
fabric, the Amendment was passed in the year 2018.17 The Amendment sought
to criminalise bribe-giving and to bring about a far more nuanced system of
giving immunity to those who are victims of coercion into giving such bribes
unlike the practice adopted in the originally enacted legislation.18 Further, it
also cracked down on corporate officers by affixing personal criminal liability
in the event of their involvement in bribery.19 The stakes for companies were
also raised as the Amendment created a distinct offence for corrupt conduct
by “Commercial Organisations”, thus bringing about the hopes for far more
microscopic scrutiny of any undue advantages extended to public servants by
such organisations.20

16
Prevention of Corruption (Amendment) Act, No. 16, Acts of Parliament, 2018, §9
[hereinafter “POCA”].
17
Auroshree, Prevention of Corruption Act - Before and after Amendment [A Comparison],
THE SCC ONLINE BLOG (July 27, 2018),
https://www.scconline.com/blog/post/2018/07/27/prevention-of-corruption-act-before-and-
after-amendment-a-comparison/ (last visited Sept. 20, 2020).
18
Calvin Chan & Jun Yi Ho, India: Significant Updates To India's Anti-Corruption Law,
MONDAQ (Oct. 19, 2018), https://www.mondaq.com/india/white-collar-crime-anti-
corruption-fraud/747460/significant-updates-to-india39s-anti-corruption-law (last visited
Sept. 15, 2020).
19
Id.
20
POCA, § 9
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 277

These legislative lacunae aggravate and present viciously in the

peculiar political and institutional environment of India. There are two
primary irritants that frustrate any legislative advancements to curb the
alarming increase in corruption-related crimes in India.21 First is the
indoctrination of corruption in the institutional framework that presents itself
uniquely in India. On one hand, we see that corruption has become the norm
and not the aberration - it has transcended the bounds of a crime and become
the expected practice. This is evident from the fact that the stratification in the
societal fabric has become far more strenuous and thus only a select chunk of
the populace can afford to sustain this practice as the masses continue to live
in penury.22 On the other hand, this socio-economic disparity has further
convoluted the ethical ties in the society. Those equipped to offer bribes
manage to do so at a minimal personal cost which in most likelihood is
accepted by the members of the lower strata on account of their dismal living
conditions. Hence, the contrasting position of the members of the society has
created a quagmire causing corruption to become an indispensable feature of
the Indian institutional set-up. This problem is further aggravated due to the
absence of an anti-corruption ombudsman in our country.23

Unsurprisingly, the 2018 Amendment misses the bull’s eye by a mile.

A deeper look at the amendments and objectives that prompted them reveals

21
Tabish Khair, The Root cause of corruption, THE HINDU (Jan. 20, 2019),
https://www.thehindu.com/opinion/columns/the-root-cause-of-
corruption/article26038081.ece (last visited Sept. 20, 2020).
22
Id.
23
G. Seetharaman, Delay in appointment of Lokpal & Lokayukta: Who will bell the graft?,
THE ECONOMIC TIMES (Nov. 10, 2018), https://economictimes.indiatimes.com/news/politics-
and-nation/why-there-is-no-lokpal-at-centre-and-lokayukta-in-many-
states/articleshow/66570168.cms?from=mdr (last visited Sept. 21, 2020).
278 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

that the problems that it sought to remedy still plague the system.24 For the
purpose of a specific and in-depth understanding, the authors have fashioned
their criticism of the scheme including the amendment, in a trident. These
three elements have been carefully picked up by the authors as they cover the
areas where the Indian government turned out to be unsuccessful. The first
spear is the non-application of the POC Act to foreign officials and private
entities. The second is the unregulated internal investigation system in India,
with the last being the lack of protection afforded to the whistle-blowers in
India which subsequently results in their victimization.

A. Violation of The Corporate Veil Principle

While the legislators achieved a commendable feat by bringing

commercial organisations under the purview of the POC Act, the authors are
of the view that it was a job half done. Commercial organisations have been
given an inclusive definition wherein “bodies, partnerships or any other
association of persons incorporated within and outside India which carry on at
least a part of their business in India are subjects of scrutiny under the POC
Act.”25

Following the Amendment, the POC Act seeks to punish any

functionary of such organisation be it a director, manager, or any other officer

24
An Overview of Anti-Corruption Laws in India: A Legal, Regulatory, Tax and Strategic
Perspective, NISHITH DESAI ASSOCIATES (2020),
http://www.nishithdesai.com/fileadmin/user_upload/pdfs/Research_Papers/Overview-of-
Anti-Corruption-Laws-in-India-Web1.pdf (last visited Oct 20, 2020).
25
POCA, §9(3)(a)(i).
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 279

who performs services on behalf of the commercial organisation and is proven

to have committed or consented to the said offence.26

The punishment comprises imprisonment for a minimum of three years

which could be extended to a period of seven years along with a fine.27 The
corporate veil, in the instance where the consent of a director is proved in a
court,28 is pierced and results in the prosecution of that person. However, the
investigating authorities, on account of their inability to sever the identity of
the company from that of its directors, often drag innocent directors into the
case.29 Not only does it victimise such members and directors but it also has a
devastating impact on the commercial organisation. For cases such as these,
the only defence that can be availed by the affected parties is to prove before
the courts that they have “adequate procedures” in place.30 As a customary
practice, the companies ought to introduce manuals and guidance notes so as
to keep a tab on the level of corruption in the company. Furthermore, it is
incumbent upon them to educate and sensitise their employees about the
provisions of the POC Act to ensure its adherence across all levels. Failure in
any of the aforementioned compliances can attract the liabilities under the
Amendment. However, with the Amendment not laying down any contours
for such procedures, taking this defence inevitably creates another conundrum
for both the directors and the courts. The absence of a benchmark or threshold
by the POC Act with respect to what exactly constitutes adequate procedures

26
Avik Biswas & Yeshasvi Narasimhan, The Prevention of Corruption (Amendment) Act,
2018 – Key Highlights, MONDAQ (Aug. 09, 2018), https://www.mondaq.com/india/white-
collar-crime-anti-corruption-fraud/726890/the-prevention-of-corruption-amendment-act-
2018-key-highlights (last visited Sep. 21, 2020).
27
The Prevention of Corruption Act, No. 49, Acts of Parliament, 1988, §§9,10.
28
Sunil Bharti Mittal v. Central Bureau of Investigation, 2015 (4) SCC 60.
29
Iridium India Telecom Ltd. v. Motorola Incorporated, AIR 2011 SC 20.
30
POCA, §9(b).
280 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

creates complex uncharted territory, thereby paving the way for highly
subjective interpretation of a clause of paramount importance.

B. Problems with Internal Investigation in Private Sector

For legislations to be coloured as effective and reasoned, the key

requirement is testing it against certain set standards. In India, barring the
Sexual Harassment of Women at Workplace (Prevention, Prohibition and
Redressal) Act, 2013, there are no statutory mandates or procedural directives
for conducting internal investigations in a company. The problem that surfaces
in such micro-systems is one of arbitrariness and subjective interpretation that
frustrates the very purpose of the legislation. With no standards to adhere to,
internal investigations remain highly unregulated with each corporate
adopting its own modus operandi. Most listed companies,31 as of date, provide
for a grievance mechanism, whistle-blower policy and a vigil mechanism for
the directors, which is usually inclusive of an investigation procedure and the
internal code of conduct governing the entity, without any minimum standard.

The POC Act, in specific, provides for defences based on “adequate

procedures” and “due diligence” to prevent corruption without delineating the
terms, hence creating a breeding ground for dubious practices. One of the
major reasons why India’s anti-corruption regime fails to withstand the test of
effectiveness is also its disregard of the need to include preventive policies,
thus making the POC Act a misnomer.

31
Companies Act, No. 18, Acts of Parliament, 2013, § 177.
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 281

C. Lack of Protection to the Whistle-blowers

Whistleblowing can be defined as an act of “revealing secret

information regarding some wrongdoing or an unethical, illegal activity going
on in an organisation for the benefit of the masses.”32

In its most literal sense, the term encompasses an act of ‘blowing a

whistle’ which inevitably brings the mishaps of a company to the forefront.
Whistleblowing plays a pivotal role in exposing scams and scandals. Under
Section 4(d)(iv) of the SEBI (Listing Obligations and Disclosure
Requirements), 2015 every listed entity is mandatorily required to devise an
effective whistle-blower policy that allows all the stakeholders including
individuals and representatives to freely express their concerns regarding any
illegal or unethical practice.33

Additionally, details of such policies must also be displayed on their

official website for everyone to access and read.34 Upon the establishment of
such mechanisms, it shall be the duty of the Audit Committee to review the
functioning of the whistle-blower mechanism in the company.35 In addition,
the codes of conduct of most companies provide for reporting norms through
a set internal mechanism. The Whistle Blower Protection Act, 2014 (“Whistle
Blower Act”) provides safeguards against victimisation of the person making
complaints relating to the disclosure on any allegation of corruption or wilful

32
Trishna Chaturvedi et al., Whistleblower’s Protection Act 2011, India: A Critical Analysis,
4 INT’ J. ADV. RES. COMP. SCI. 136 (2020).
33
Securities And Exchange Board of India (Listing Obligations And Disclosure
Requirements) Regulations, 2015, GOVT. OF INDIA, §4(d)(iv).
34
Id. at §46(2)(e).
35
Id. at §18(3).
282 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

misuse of power or wilful misuse of discretion against any public servant.36

The Whistle Blower Act aims at protecting the identity of the whistle-blower.

However, with the non-implementation of the Whistle Blower Act to

date, corporate or private whistle-blowers are not granted adequate
protection.37 Primarily due to the non-committal stance of the government, the
2015 bill lapsed, leaving certain questions regarding the public interest
disclosures and scope of inquiry by the competent authority inadequately
addressed.38 As of date, the Act stands in limbo, being a valid law yet to be
implemented39 and enforced across the country so as to provide a proper
mechanism for whistle-blower protection.

Problems escalate due to the fact that there are no provisions for
whistle-blower policy in the private sector. As such, the maximum protection
which the Whistle Blower Act envisages is the concealment of identity and
nothing beyond. Circumstances heat up as several corporate or private whistle-
blowers are not granted adequate protection in our country.40 A known
example of the above deficiencies would be the assassination of Mr. Satyendra
Dubey, a project director at the National Highways Authority of India
(“NHAI”). He had exposed misappropriation of funds being carried out in the

36
Whistle Blower Protection Act, No. 17, Acts of Parliament, 2014, §5.
37
JP et. al, Comparison of Whistleblower Protection Mechanism of Select Countries, 11 IND.
J. CORP. GOV. 62, (2018).
38
The Whistleblowers Protection Act, 2014: Comparison of the 2015 Bill with the 2013
amendments, PRS LEGISLATIVE RESEARCH,
https://www.prsindia.org/sites/default/files/bill_files/whistleblowers_bill-
_comparison_of_2013_and_2015_amendments_0.pdf (last visited Oct 3, 2020).
39
Where the Law stands on Whistle-blowers in India, THE ECONOMIC TIMES (Oct. 26, 2019),
https://economictimes.indiatimes.com/news/company/corporate-trends/where-the-law-
stands-on-whistleblowers-in-india/infosys-episode/slideshow/71770940.cms (last visited
Sept. 25, 2020).
40
Id.
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 283

name of the Golden Quadrilateral Project. However, right after the disclosure,
he was assassinated in 2003 as an act of revenge by the parties whose
wrongdoings were revealed.41 Therefore, the crucial understanding remains
that mere concealment of identity is not, by itself, an adequate measure for the
purpose of safeguarding the interests of the whistle-blowers. The Government
ought to go the extra mile to ensure that the subsequent implementation of the
Whistle Blowers Act lives up to its name and vision of protecting the whistle-
blowers.

In addition to the aforementioned problems, the Whistle Blowers Act

is limited in its ambit with regards to bribery of foreign public officials
escaping the mandate of the law. Contrasting the provisions of the Act with
more matured jurisdictions, like the U.S.A. and U.K., the Act misses the mark
and does not recognise illegal gratification paid to foreign government
officials or officers of a public international organisation. By virtue of this,
India stands in violation of its international obligations under the aegis of the
UNCAC which specifically prohibits giving undue advantage to “any foreign
public official or official of a public international organisation.”42

III. CROSS JURISDICTIONAL ANALYSIS

In a world that has emerged as a result of hyper globalisation and

liberalisation, borders do not hold the same meaning as they previously did.43

41
Three Convicted in Satyendra Dubey Murder case, THE TIMES OF INDIA (Mar. 22, 2010),
https://timesofindia.indiatimes.com/india/Three-convicted-in-Satyendra-Dubey-murder-
case/articleshow/5712476.cms (last visited Sept. 25, 2020).
42
United Nations Convention Against Corruption art.16, ¶ 1, Oct.31, 2004, U.N.C.A.C. 17.
43
Anja Baum et. al, Governance and SOEs: How Costly Is Corruption?, INTERNATIONAL
MONETARY FUND, WORKING PAPER,
https://www.imf.org/en/Publications/WP/Issues/2019/11/22/Governance-and-State-Owned-
Enterprises-How-Costly-is-Corruption-48800.
284 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

The exchange of information and ideas is free-flowing and consequently, this

article finds its purpose in the shared learnings that world systems have to
offer. These lessons surface in the backdrop of the unique intersection of the
system of governance, socio-political sensibilities, and economic conditions
among the countries perused below and India. This section of the article bears
an analysis of three countries viz. Germany, Australia, and Bhutan, and
proposes certain unique solutions for the Indian framework. The countries
have been carefully selected upon an evaluation of their anti-corruption
practices as well as on account of their geopolitical circumstances bearing
similarities to India. The authors have undertaken an analysis of Germany
owing to its consistent performance in the CPI and the recent developments
that it instituted. Further, Australia has been chosen as a subject of scrutiny
owing to its similar geopolitical sensibilities and its updated standards for
whistle-blower protections. Lastly, an in-depth appraisal of Bhutan has been
attempted to understand how realigning civilisational goals can be the key to
an effective regime.

A. Taking the Lead: Germany

Germany, unlike India, is marked by an explicit distinction among the

several forms of bribery. With the intention of differentiating between active
and passive forms of bribery, the German legislative regime divides corruption
into three forms, namely – “bribery in business dealings,44 bribery of public
officials,45 and bribery in connection with the health sector.”46

44
Strafgesetzbuch [StGB] [Penal Code], §299-302, https://www.gesetze-im-
internet.de/englisch_stgb/englisch_stgb.pdf (Ger.).
45
Id., § 331-337.
46
Id., § 108(b)-108(e).
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 285

Further, the Strafgesetzbuch (“StGB”), the German Criminal Code,

mandates that the presence of an illegal agreement is a sine qua non for
establishing criminal liability. The design of the legislation addresses certain
key concerns that India can imbibe. Understanding the gravity being accorded
to the public sector bribery only serves half the purpose. In a country with
varied interactions and the potential criminality in them, appropriately
penalising private sector bribery is a crucial takeaway.47

Additionally, as opposed to India, the provisions of the StGB extend

the bounds of the country and apply at the European level. This came in the
aftermath of the Amendment in the year 2015.48 European Union (“EU”)
office holders, such as officials or civil servants of EU institutions, as well as
other parties that carry out EU duties, are now explicitly covered under Section
11 (1) No. 2a of the legislation. Moreover, the provisions that deal with bribery
of public officials within the country also apply to public officials and other
employees of the International Criminal Court (“ICC”).49 In its quest to
become a leading global voice, India will do well to legislate on the question
of liability in the event of corruption involving foreign public officials.

Having said that, concerns have been flagged at the international front
which have reflected the challenge of collecting evidence of any bribery which
occurred on foreign soil.50 The gravity of the matter was duly considered by

47
MENDELSOHN, supra note 14, at 130-135.
48
Strafgesetzbuch [StGB] [Penal Code], §11(1), https://www.gesetze-im-
internet.de/englisch_stgb/englisch_stgb.pdf (Ger.).
49
Id. § 11(1).
50
Gloria González Fuster & Sergi Vázquez Maymir, Cross-border Access to E-Evidence:
Framing the Evidence, CEPS (2020), https://www.ceps.eu/wp-
content/uploads/2020/03/LSE2020-02_Cross-border-Access-to-E-Evidence.pdf (last visited
Oct 15, 2020).
286 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

the EU and an attempt was thus made to tackle the offshore issues.
Consequently, the EU moved a proposal for a regulation on the European
production and preservation orders for electronic evidence in criminal
matters51 (“the E-Evidence Regulation”) and an accompanying directive.52

Curiously, the German inclination to streamline the level of protection

extended to anonymous whistle-blowers with the EU requirements has also
surfaced in the aftermath of the recently published draft EU directive on
whistle-blower protection.53 The directive sparks the hopes of increased
instances of such whistle-blowers reporting legal violations such as
corruption.54 Germany is perhaps one of the few parties to the Convention to
have regularly uncovered foreign bribery cases through its tax authorities who
play a pivotal role in this regard.55 A significant number of cases have also
been detected through mutual legal assistance and self-reporting by
companies.56

51
Commission Proposal for a Proposal for a Regulation of the European Parliament and of
the Council on European Production and Preservation Orders for electronic evidence in
criminal matters, COD, EUROPEAN COMMISSION (2018) 225 Final (April 17, 2018),
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM%3A2018%3A225%3AFIN.
52
Commission Proposal for a Directive of the European Parliament and of the Council laying
down harmonised rules on the appointment of legal representatives for the purpose of
gathering evidence in criminal proceedings, COD, EUROPEAN COMMISSION (2018) 226 Final
(April 17, 2018).
53
Directive 2018/225, of the European Parliament and of the Council of 17 April 2018 on
European Production and Preservation Orders for electronic evidence in criminal matters
COM, EUROPEAN COMMISSION (2018) 225, 2018. https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=COM%3A2018%3A225%3AFIN (last visited Sept. 29, 2020).
54
Andre M. Szesny, Germany: Anti-Corruption & Bribery Comparative Guide, MONDAQ
(June 22, 2020), https://www.mondaq.com/germany/criminal-law/861122/anti-corruption-
bribery-comparative-guide (last visited Sept. 27, 2020).
55
Josephine Moulds, These are the world's least – and most – corrupt countries, WORLD
ECONOMIC FORUM (Feb. 05, 2019), https://www.weforum.org/agenda/2019/02/least-corrupt-
countries-transparency-international-2018/ (last visited Sept. 29, 2020).
56
OECD Working Group on Bribery, Implementing The OECD Anti-Bribery Convention.
Phase 4 – Germany, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 287

B. Sweeping Cultural Reforms: Australia

A closer look at Australia’s anti-corruption framework is necessitated

by its performance on the Corruption Perceptions Index. In 2019, Australia
ranked 12 out of a 180-country pool with a score of 77, well above the global
average of 43/100.57 It was recently hailed for effecting sweeping reforms in
its Treasury Laws Amendment (Enhancing Whistleblower Protections) Act,
2019. The reforms are touted to be a leading example for countries across the
globe. The Amendment Act aims to bring about a shift in culture in terms of
how whistle-blowers are dealt with. It focuses on revolutionising the quant
and the manner in which legal protection is extended to the whistle-blower.

The Act lays down firm principles to prevent whistle-blowers from

experiencing reprisals. The curious shift from corrective to preventive
measures is truly aspirational for nations like India that afford little to no
protection. Companies are now required under the law of the land to
sufficiently show how they will “support and protect” those who reveal
wrongdoing before they are subjected to any repercussions.58

With these reforms, Australia furthers the vision and recommendations

of Transparency International with regards to whistle-blowing.59 The
definition of what kinds of wrongdoings can be reported has been massively

(OECD) (2018), http://www.oecd.org/corruption/anti-bribery/Germany-Phase-4-Report-

ENG.pdf (last visited Oct. 18, 2020).
57
WORLD BANK, supra note 6.
58
A.J. Brown, Whistleblowing Reforms in Australia Show the Way, TRANSPARENCY
INTERNATIONAL, (Feb. 22, 2019), https://voices.transparency.org/whistleblowing-reforms-in-
australia-show-the-way-7c4e373ef660 (last visited Oct. 01, 2020).
59
International Principles for Whistleblower Legislation, TRANSPARENCY INTERNATIONAL
(2013), https://images.transparencycdn.org/images/2013_WhistleblowerPrinciples_EN.pdf
(last visited Oct. 01, 2020).
288 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

expanded and clarified.60 The scope of who is covered has also been widened
to include not only employees, but former employees, contractors, volunteers,
and the spouses and dependents of employees.61 Importantly, it will now be
easier for whistle-blowers to get compensation and other remedies if they
suffer because of speaking out.62 The necessary caveat while juxtaposing
Australia’s framework to India is to ensure that a tiger on paper does not
become a paper tiger in effect.63 The core requirement that presents itself
would be the effective implementation of such provisions.

Furthermore, a distinct mention of similar experiences in dealing with

the political hot potato of foreign political financing is necessitated when
drawing parallels between the two. Both countries have made headlines
regarding the effectiveness of norms in place to regulate such inflow of money.
Serena Lillywhite, Chief Executive, Transparency International Australia also
emphasised the “corrosive” influence that money with dubious paper trails
have on government integrity.64 With recent amendments leading towards
instituting transparency as a requisite for such contributions by devising

60
Georgie Farrant & Michael Michalandos, Australian Parliament passes Whistleblowing
Bill, GLOBAL COMPLIANCE NEWS (Mar. 26, 2019),
https://globalcompliancenews.com/australian-parliament-passes-whistleblowing-bill-
20190219/ (last visited Oct. 01, 2020).
61
Corporations Act, 2001, § 1317AAA (Australia).
62
Brown, supra note 58.
63
Transparency International Australia, Treasury Laws Amendment (Enhancing
Whistleblower Protections) Bill 2017, TRANSPARENCY INTERNATIONAL AUSTRALIA (2018),
https://transparency.org.au/wp-content/uploads/2019/10/18_02_26_Treasury-Laws-
Amendment-Bill-2017_Submission-FINAL.pdf.
64
Christopher Knaus, Australia Among 21 Nations Where Perceived Corruption Has
Worsened, THE GUARDIAN, (Jan. 23, 2020), https://www.theguardian.com/australia-
news/2020/jan/23/australia-among-21-nations-where-perceived-corruption-has-worsened
(last visited Oct 01, 2020).
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 289

additional steps of registration and compliance, both nations continue to share

the global spotlight in this regard.65

India, however, continues to deal with the consequences of a vague

Electoral Bonds Scheme. The chief election regulatory authority, the Election
Commission of India voiced its concerns that electoral bonds facilitate the
anonymity of political donors and thus are detrimental to the “right to vote”.66
Furthermore, the Union Government in India recently amended its Foreign
Contribution (Regulation) Act67 leading to a myriad of heightened scrutiny
measures around foreign funding received by non-profits operations in the
country.68 Checks and balances have been instituted to combat an expansive
range of issues, such as prohibition on a wider range of individuals in public
service from receiving such donations, transfer of foreign funds, reductions in
usage of such funds for administrative purposes, and making Aadhaar
identification of all office-bearers of such non-profits mandatory.69 With
recent amendments leading towards instituting transparency as a requisite for

65
Dipanjan Roy Chaudhury, Australia Shows the Way in Controlling Foreign Funding of
Political Parties, THE ECONOMIC TIMES,
https://economictimes.indiatimes.com/news/politics-and-nation/australia-shows-the-way-in-
controlling-foreign-funding-of-political-parties/articleshow/63564247.cms?from=mdr (last
visited Oct. 03, 2020).
66
Arihant Pawariya, Foreign Funding of NGOs: Why Home Minister Amit Shah’s Proposed
Amendments To
FCRA Matter, SWARAJYA (Sep. 22, 2020), https://swarajyamag.com/politics/foreign-funding-
of-ngos-why-amit-shahs-proposed-amendments-to-fcra-matter (last visited Oct 3, 2020).
67
The Foreign Contribution (Regulation) Amendment Act, 2020, No. 33, Acts of Parliament,
2020.
68
The Foreign Contribution (Regulation) Amendment Bill, 2020, PRS LEGISLATIVE
RESEARCH,
https://www.prsindia.org/billtrack/foreign-contribution-regulation-amendment-bill-2020
(last visited Jan. 23,
2020).
69
Farrant, supra note 60.
290 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

such contributions by devising additional steps of registration and compliance,

both nations continue to share the global spotlight in this regard.70

C. Know Thy Neighbour: Bhutan’s Outlook

The Thunder Dragon Kingdom has recently joined the realm of

democratic governance and has since not only established itself as a state that
values integrity in the collective conscience but also given the world at large
a chance to evaluate their own civilisational goals. The landlocked nation
adopted Gross National Happiness as the unit of measure to evaluate the
development and progress of the state in contrast to the adoption of only
economic yardsticks.

Quoting the then Crown Prince, His Majesty Jigme Khesar Namgyel
Wangchuck, the Fourth King of Bhutan, at the First International Conference
on Gross National Happiness, Thimphu, Bhutan, February 2004, “I feel that
there must be some convergence among nations on the idea of what the
primary objective of development and progress should be – something Gross
National Happiness seeks to bring about.”71

The Gross National Happiness Index includes good governance as one

of the four central pillars of the concept. The Centre for Bhutan Studies and

70
Dipanjan Roy Chaudhury, Australia Shows the Way in Controlling Foreign Funding of
Political Parties, THE ECONOMIC TIMES,
https://economictimes.indiatimes.com/news/politics-and-nation/australia-shows-the-way-in-
controlling-foreign-funding-of-political-parties/articleshow/63564247.cms?from=mdr (last
visited Oct. 03, 2020).
71
Hans van Willenswaard, Critical Holism: A New Development Paradigm Inspired by Gross
National Happiness, GROSS NATIONAL HAPPINESS: PRACTICE AND MEASUREMENT 632
(Dasho Karma Ura & Dorji Penjore 2009),
http://www.bhutanstudies.org.bt/publicationFiles/ConferenceProceedings/4thGNH/34.4thG
NH_HansvanWillenswaard.pdf.
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 291

GNH Research is committed to transcending the traditional notions of

happiness as an individual centric concept and have characterised it as a
collective goal. The Centre undertakes the survey of 8,000 randomly selected
households across the country every five years to conduct elaborate
questionnaires to gauge public perceptions. The raison d'être of success of
Bhutan’s anti-corruption policy thus lies in the integration in a broader ethical
vision as well as having specific targets.72

Bhutan thus, has fashioned certain eye-catching methods for its

neighbour next door. India, with a litany of its historical struggles with highly
embarrassing corruption scandals, struggles with a highly convoluted image
of its public offices. With cynicism at an all-time high, perhaps realigning or
reassessing civilisational goals may have some solutions in-store. This is
something that India, owing to its glorious civilisational history, must pay the
most attention to, not just in an attempted exercise of decoloniality but an
overall value-based social fabric.

Further, with Buddhism and its teachings virtually inseparable from

the country’s governance and policy-making fabric, Bhutan seeks to attack the
instances of corruption by concerted efforts. Unlike the unregulated internal
investigation system in India, Bhutan considers the same to be a multi-
stakeholder concern. It goes the extra mile and invites people from a spectrum
of backgrounds such as students, professionals, corporate executives,
journalists, and civil servants at different levels to address and look at
corruption from their own unique perspectives.

72
Bertrand Venard, What the World Can Learn from Bhutan About Fighting Corruption,
QUARTZ INDIA, (Jan. 24, 2019), https://qz.com/india/1530839/what-bhutan-can-teach-india-
and-others-about-fighting-corruption/ (last visited Oct. 05, 2020).
292 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

Perhaps the last lesson that India can take from Bhutan is that of
honouring the spirit of scientific enquiry that it has already established in
Article 51A (h) of the Constitution of India. Bhutan approaches the problem
of corruption as a matter of research and analysis. It has conducted several
scientific inquiries to understand the causes, consequences, and ways of
reducing corruption.73

IV. CONCLUSION

Having conducted an in-depth appraisal of anti-corruption regimes

across state lines, the authors have scoured for creative solutions to the
problems endemic to the Indian regime. The article sought to understand the
core issues faced by our country in the anti-corruption framework and the
ways through which they have been tackled by some of the leading nations of
the world. On critically analysing the Indian provisions, the authors zeroed in
on three key lacunae that rot the system. This article was thus an attempt to
address and mitigate such issues.

Corruption is an evolving civilizational problem and the remedy does

not lie in trying to fashion a one-time cure. Dealing with corruption requires
regular appraisal of laws addressing it and using scientific methods to address
it. The authors while comparing world systems found certain countries to have
addressed the ailments of the Indian framework. For example, Australia
minimises the incentive behind being corrupt by allowing for minimal
governance and reducing the discretionary powers of the policymakers. In
addition, it endeavours to instil systemic reforms to create a culture of

73
Id.
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 293

awareness and increased protections to the whistle-blowers, thus prompting

them to report the wrongdoings.

An analysis of the German system presents an accurate attempt to

tackle cases of corruption by foreign officials by taking E-evidence into
account. Furthermore, the bifurcation of bribery into three forms, as has been
discussed previously, further proffers clarity on the scope of the offence and
the identification of the parties better and easier.

A long contemplative look at Bhutan may well present certain answers

towards a robust state agenda against corruption. Inclusion of happiness in its
national agenda and classifying corruption as detrimental to it goes a long way
in guiding public values. The juxtaposition of such a measure to India, given
the socio-economic fabric, presents a solution. Further, the emphasis of
scientific analysis of corrupt practices may well be fruitful for India, bearing
in mind the peculiar manifestations of the crime.

In addition to the aforementioned countries, lessons can also be drawn

from The Whistle-blower Act in Ghana which not only extends protection to
the whistle-blowers but also provides them with incentives.74 The
establishment of a full-fledged ‘Whistleblower Reward Fund’ provides for a
reward if the disclosure leads to the arrest and conviction of the guilty.
Additionally, in view of how the entire process of whistleblowing can take a
toll on the whistle-blowers, the government may also extend psychological
care to them and their families as is done in the Netherlands or
Norway.75 Similarly, narrowing down the wide ambit of adequate procedures

74
The Whistleblower Act, 2006, § 20–27 (Ghana).
75
Van der Velden et. al, Mental Health Problems Among Whistleblowers: A Comparative
Study, 122 PSYCH. REP. 1, 13 (2019).
294 RGNUL FINANCIAL AND MERCANTILE LAW REVIEW [Vol. 8(1)

to certain standard principles such as due diligence, risk assessment,

monitoring, reviewing, etc. would give a benchmark to the companies to
follow. Not only would that bring an element of objectivity in the current
system, but would also lay down guidelines that had been missing so far.
Therefore, a clear and defined set of principles rather than a mere legislative
enactment of simply stating adequate procedures, as is done in the U.K., could
curb corruption in India as well.

While the above nations have something valuable to offer, a bare

perusal of the overall anti-corruption framework across the globe discloses an
element of imperfection in almost every nation. This also leads to an argument,
the crux of which rests in the fact that ranking well on any global index
measuring corruption is not, by itself, indicative of a perfect system. A
country’s fair performance in the index so far, does not, in any way, signify a
utopian scheme of events. Thus, finding a country that has unimpeachable
standards of integrity adhered to by politicians or tax evaders, becomes taxing.
For instance, Denmark, the top most country in the index, has experienced
recent corruption cases such as a money-laundering scandal surrounding
Danske Bank, its biggest lender.76 Furthermore, as quoted by Martin Hilti, the
director of Transparency International, Switzerland, yet another global leader,
happens to face serious deficiencies when it comes to handling cases relating
to money laundering or catering protection to the whistle-blowers.77 Similarly,

76
Josephine Moulds, These are the World's Least – and Most – Corrupt Countries, WORLD
ECONOMIC FORUM, (Feb. 5, 2019), https://www.weforum.org/agenda/2019/02/least-corrupt-
countries-transparency-international-2018/ (last visited Oct. 10, 2020).
77
Markus Berni & Philippe Monnier, Anti-Corruption in Switzerland, GLOBAL COMPLIANCE
NEWS, https://globalcompliancenews.com/anti-corruption/handbook/anti-corruption-in-
switzerland/ (last visited Oct. 10, 2020).
 2021] INDIA’S ANTI-CORRUPTION PRACTICES 295

for the ones that have not performed up to the mark in the Index does not
necessarily imply a complete or an absolute failure of the government.

While the figures regarding India may not portray a very optimistic
figure, it cannot be said that there does not remain any hope for it to climb its
way up in the ladder. India, unlike major western countries, is characterised
by the presence of a considerably active youth population who are seeking to
bring a change in the society. Therefore, to conclude, the authors are of the
opinion that while India is marked by a list of issues that have been analysed
in the above sections of the article, an effective utilization of the legislative
measures and lessons from other countries can possibly extricate it from the
quagmire it is currently placed at.