Preventing corruption should not hinder the creation of credit

Recently, news of India’s downgrade on the Corruption Perceptions Index compiled by Transparency International made headlines. Regardless of international rankings, digitization and faceless interactions and self-affirmations are far from possible at the opportunities for petty corruption. This column administration is not a purely moral play, but a delicate balancing act between probability and economic activity. We would like to make it clear that we are not referring to both as polar opposites.

The Anti-Corruption Act (POCA) was amended in 2018. He immediately challenged in the Supreme Court (SC) that the anti-corruption measures in the original law were diluted by the amendment. As this challenge is currently pending before the Supreme Court of India, it is important to highlight that the amendment to this Act is a welcome version and should not be construed as a retaliatory measure.

Section 13 of the Poka, as it is said to be a pre-amendment, was ignored Men’s Rhea (Or intent), which is an essential part of any criminal law. It is essentially an administrative decision as well, if it is found to be ineffective in reconsideration it will cause damage to the treasury and there are serious indictments against the concerned officer. Our courts have found the offense of criminal misconduct in the POSA a strict liability offense, only necessary to show that the decision taken by the prosecution is detrimental to the public interest, as is evident in this case Runu Ghosh et al. Central Bureau of Investigation (CBI) was decided by the Delhi High Court in 2011. In 2016, SC, in the case CBI vs Ramesh Gelli, Private-bank employees are also included in the scope of the law.

In April 2020, Professors Rajeshwari Sengupta and Harsh Vardhan wrote (Policy design during high risk-aversion) SC judgment means that all bank employees are at risk of investigation and prosecution under the POCA for issues related to corruption. Any bad loan can fall into the scanner scope and this single step is likely to prevent bank executives from making commercial decisions. Their concerns are valid.

Following Gelly’s verdict, bank employees raised fears that the loan could be revoked because, if the borrower’s account becomes NPA, a criminal investigation could be launched against the officer responsible for granting or restructuring the loan, even in good faith. India cannot bear such anxiety and incompetence at a time when it is looking to boost its economy.

The 2018 Poka Amendment is a refreshing change in multiple calculations. First, it limited the scope of the definition of ‘criminal misconduct’ to necessarily contain an element of criminal intent. Second, it introduced the necessary additional protective layer from a senior officer authorized to dismiss an employee who sought to bring charges before any investigation could begin. Furthermore, the Early Amendment Act does not require prior approval of a trial on retired employees. That has now changed.

While these changes are welcome and temporarily address concerns of abuse of the law, more work is needed in light of the 2016 SC judgment. Private-sector bank employees have no reason to fall under this law. This law, which fully defines a ‘public servant’, does not cover private-bank employees by any stretch. However, by Gelly’s judgment, the SC has expanded the scope of the law and it is undesirable because it is purely a legislative exercise.

Furthermore, the suggestion made by Dr. YV Reddy, the former Governor of the Reserve Bank of India, deserves to be re-implemented in 2002. He suggested that public sector employees who work significantly in industries and compete directly with the private sector should be excluded from the scope of the Act, as it has created an anti-competitive environment and given the private sector a significant edge. Companies law should be the governing law for corporate commercial activities. Also, there are many provisions in the Indian Penal Code for specific offenses such as bribery.

Moreover, despite its protective measures, the provisions of the Act were indeed abused. Double-edged sword requires prior approval before proceeding with trial. While this has led to some protection, it has also occurred in cases where junior officers have been harassed, with senior officers victimizing them for allegedly incurring debts in connection with a potential fraud.

The Supreme Court recognized the need to provide protective layers for judges so that they could perform their duties in a free and fair environment. It is time for the Supreme Court of the country to implement the same principle for our private sector and elect certain segments of the public sector.

These are the personal opinions of the authors.

(V. Anantha Nageshwaran & Anki Ghosh are respectively members of the Prime Minister’s Economic Advisory Council and Advocate in the Supreme Court of India.)

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