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Report No. 254

C. Section 7(2) of the 2013 Bill

2.11.1. Section 7(2) is a take-off from sections 3, 4 and 5 of the UK Bribery Act. Sections 3 and 4 of the Bribery Act are relevant in the UK context because, although they sought to punish private acts of bribery, they wanted to classify only some acts as punishable. This made it important to define the terms "relevant function or activity" or "improper performance" to which the bribe relates or "relevant expectation".

2.11.2. However, the PC Act only deals with corruption by public servants and already defines the terms "public servant" and "public duty" in section 2 of the 1988 Act. For this reason, the definitions under section 7(2) are not relevant or necessary in the Indian context, and in fact, will only create confusion.

Section 7(2)(a), 2013 Amendment Section 3 UK Bribery Act
It is a "public function or activity" if
  • It is a the function or activity is of a public nature;
  • the function or activity is performed in the course of a person's employment as a public servant;
  • the person performing the function or activity is expected to perform it impartially and in good faith; and
  • the person performing the function or activity is in a position of trust by virtue of performing it;
It is a "relevant function or activity" if
  • it falls within sub-section (2)
    (a) any function of a public nature,
    (b) any activity connected with a business, (including trade or profession),
    (c) any activity performed in the course of a person's employment,
    (d) any activity performed by or on behalf of a body of persons (whether corporate or unincorporate)
  • And meets one or more of conditions A to C.
    Condition A: a person performing the function or activity is expected to perform it in good faith
    Condition B: person performing the function or activity is expected to perform it impartially
    Condition C: person performing the function or activity is in a position of trust by virtue of performing it

2.11.3. Section 7 (2)(a) dealing with the definition of a "public function or activity" is completely derived from sections 3(2)(a), (c), 3(3), 3(4) and 3(5) of the UK Act, instead of the provisions of the UNCAC. Given that the UK Act did not want to bring all private activities within the fold of the Bribery Act, it was necessary to determine the public nature of the function or whether it was performed in a position of trust.

Therefore, various permutations and combinations of activities were brought within the section's ambit. In the 2013 amendment, we are only looking at functions being performed by a public servant, and as such the same exclusions/conditions may not be relevant. Even then, the scheme operating in the UK Act is not replicated and the definitions of "public function or activity" and "relevant expectation" having been made cumulative, create unending confusion.

2.11.4. For instance, the focus in section 7(2)(a)(i) and (ii) on the public nature of the activity or the performance in the course of a person's employment as public servant seems completely unnecessary given that section 2(b) of the existing PC Act defines "public duty" (and hence, "public servant") in the broadest of terms. While the first two subclauses of section 7(2)(a) seem unnecessary, the final two sub-clauses in section 7(2)(a), namely section 7(2)(a)(iii) and (iv) are just confusing.

First, they make cumulative, conditions that are supposed to be disjunctive. The UK Law Commission gives using examples of referees and agents accepting contractors' bids, emphatically states that "the duty to act in good faith is not the same as a duty to act impartially,"7 and therefore treats the two as disjunctive conditions. Section 7(2)(a)(iii) places both conditions simultaneously on the public servant.

7. UK Law Commission, supra note 2, at ¶ 3.108. For instance, paying an academic referee to write an unduly partial reference is a breach of the duty of good faith, and not the duty of impartiality. Similarly, when agents accepting bids from contractors, are not under a duty to assess the bids impartially, they must only assess the bids in good faith. The duty of impartiality on the other hand, is cast on the mediator.

2.11.5. Moreover, section 7(2)(a)(iv)'s requirement that in addition to the aforesaid conditions, the "person" performing the function or activity must be in a position of trust by virtue of performing it is unnecessary, confusing and redundant. The exact lift from section 3(5) of the Bribery Act is evident when one considers the use of the word "person" whereas the PC Act, the section, and even the sub-section (a)(ii) talk about the function or activity being carried out in a person's course of employment as a "public servant".

2.11.6. More importantly, however, is the fact that the Bribery Act introduced this concept of "position of trust", keeping in mind facts, such as the "position in which [R] is expected to safeguard, or not to act against, the financial interests of another person".8 The UK Law Commission expressly rejected the idea of placing any special reliance on the legal concept of trust and instead looked at this provision covering those under a recognised 'relationship' of trust such as banker-clients/ doctor-patients, as all those in a position of trust by virtue of their circumstances such as access to documents or premises.

Thus, they give an example of a security guard R, paid to look the other way while a person, P, from the rival company enters the company premises and sifts through confidential documents.9 In the Indian context, it is very unclear how this "position of trust" will be interpreted given that the doctrine of public trust has not yet been brought into criminal law (and only applies to large tort cases).

8. Ibid., at ¶ 3.156-3.157

9. Ibid., at ¶ 3.160

2.11.7. Further, sections 7(2)(b)-(c) of the 2013 Bill are derived from sections 4(1) and (2) of the UK Act. For the reasons of the scope of the Bribery Act and the impracticality of blatant lifting its language without consistency of theme and coverage, these sub-sections further create confusion. For instance, it is unclear why section 7(2)(c)(i) uses impartially and good faith as disjunctive terms, whereas in section 7(2)(a)(iii) on the definition of public function they are used conjunctively. Similarly, the invocation of the concept of "position of trust" in the definition of "relevant expectation" is also confusing.

2.11.8. Section 7(2)(d) is a copy of section 4(3) of the UK Act, as is evident from the table below:

Section 7(2)(d), 2013 Amendment Section 4(3), UK Bribery Act
Anything that a public servant does, or omits to do, arising from or in connection with that person's past performance of a public function or activity shall be treated as being done, or omitted, by that person in the performance of that function or activity Anything that a person does (or omits to do) arising from or in connection with that person's past performance of a relevant function or activity is to be treated for the purposes of this Act as being done (or omitted) by that person in the performance of that function or activity.

2.11.9. However, it is unclear what it conveys. The UK Law Commission Report provides some guidance through this example:

"R has recently retired from an influential position in the civil service. He or she is approached by P who is seeking a lucrative contract with a Government department. P pays R a large sum of money to provide confidential information to P about the bidding processes. In this example, a prosecution should not fail at the outset simply because R is not currently engaged in a profession or performing a public function. The transaction between P and R clearly relates to past conduct of a public or professional kind. That should be sufficient to bring the matter within the scope of the offence."10

10. UK Law Commission, supra note 2, at ¶ ¶ 3.26-3.27

2.11.10. The incongruity of such a provision in the 2013 Bill or the PC Act is evident from the fact that the section 4(3) of the Bribery Act, 2010 focuses on the acts of "any person" and hence relates to the past performance of a person in the private sector as well. In fact, the blatant lifting and non-application of mind to the Indian context is evident that while the word "person" arising in the first line of section 4(3) has been changed to "public servant" in section 7(2)(d), the rest of section 7(2)(d) talks about "person". This is completely unnecessary in the PC Act context, insofar as it only relates to public servants.

2.11.11. Recommendations:

Sections 7(2)(a), (b), (c), (d) and (e) should be deleted. Thus, the definition of "public function or activity" and "relevant expectation" should be deleted.

If this is not accepted, then the conditions in section 7(2)(a) and (b) should be made disjunctive, instead of being cumulative.

2.12. Keeping in mind all the changes proposed in this Chapter, and other consequential amendments that follow, the comprehensively drafted section 7 will now read as follows:

The Prevention of Corruption (Amendment) Bill, 2013 Back

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