Arthsastra
Koutilya's Arthsastra is an ancient Indian treatise written in Sanskrit at about 300 BC, which deals with subjects like governance, law, civil and criminal court systems, ethics, economics, markets and trade, the methods for screening ministers, diplomacy, theories on war, nature of peace, and the duties and obligations of a king et cetra.
Acharya Chanakya aka Vishnugupt, the author of Arthsastra has also dealt with the subject of corruption. According to him "It was as difficult to check how much money royal officials were misappropriating as it was to find out how much water a fish drank as it swam around in the river."
Arthsastra further ordains that the officials who lack integrity must be arrested. Those who are unrighteous, should not work in civil and criminal courts. Those who lack integrity in financial matters or fall for the lure of money must not be in revenue collection or treasury, states the text, and those who lack integrity in sexual relationships must not be appointed to Vihara services (pleasure centres). The highest level ministers must be tested and should have successfully demonstrated integrity in all situations and all types of allurements.
Chankya identified 40 types of misappropriation of funds by public servants, in his Arthsastra which is the oldest written treatise in the world which dealt with corruption. Read more about it here:
https://en.wikisource.org/wiki/Arthashastra/Book_II
While laws of India for civil service do insist on continued integrity and removal from office on proven corruption, there is also a disqualification attached to appointment to political office if a politician is convicted for corruption. However the Chankya had laid down a stringent measure. According to him:
"When someone informs king about money theft by government officer, king should call his superior and subordinates individually and ask about it. When that government officer is found guilty, each of these person who lied or given wrong testimony to king should be given same punishment."
However the ancient Kingdoms fell to invading powers and the civilisation barely survived the annihilation and destruction only because it was too vast to be destroyed. Like stone temples from Kashmir to Hampi in Karnataka, which could not be demolished completely, the civilisation refused to die down.
Chughtai Turks' Invasion
What the British sponsored later historians fancifully called as Mughal were actually Chugtai Turks. Since their first ancestor to invade India was Timur, they are more appropriately called Timurid's. To quote an earlier historian eulogising Timurid:
"For nearly two centuries the throne of the Chaghtais continued to be filled by a succession of exceptionally able Princes. The brave and simple-hearted Babar, the wandering Humayun, the glorious Akbar, the easy but uncertain-tempered Jahangir, the magnificent Shahjahan, all these rulers combined some of the best elements of Turkish character and their administration was better than that of any other Oriental country of their date…."
Read more about it in: "The Fall of the Moghul Empire of Hindustan", by H. G. Keene (1887) Oxford.
In the aforesaid book, Keene has given numerous accounts of bribe being given to settle political scores and as to how mansabdars or rulers of estates were raking profits without accounting the entire revenue especially the incident at Sahranpur:
"...Hisam-ud-daulah, who had been for some time in charge of the local revenue (Diwan-i-Khalsa) was dismissed, put under arrest, and made to surrender some of his ill-gotten wealth. An inadequate idea may be formed of the want of supervision which characterized Shah Alam's reign, by observing that this man, who had not been more than two years in charge of the collections of a small and impoverished district, disgorged, in all, no less than fifteen lakhs of rupees….."
Fifteen lakh rupees in 1773 means fifteen million pounds of today. This was the extent of corruption. To say the least, the loot was unchecked and word 'loot' itself was added to the English dictionary by the British invaders who followed the Timurids.
Francois Bernier, the French traveller, records in his memoirs :
'...Nor can the commerce of a country so governed be conducted with the activity and success that we witness in Europe; few are the men who will voluntarily endure labour and anxiety, and incur danger, for another person's benefit—for a governor who may appropriate to his own use the profit of any speculation. In cases, indeed, where the merchant is protected by a military man of rank, he may be induced to embark in commercial enterprises; but still he must be the slave of his patron, who will exact whatever terms he pleases as the price of his protection.'
See: Travels in the Mogul Empire 1656-1668 by Francos Bernier (1916) Oxford University Press, London.
Francois Bernier thus corroborates the massive corruption in the so called Mughal Rule when it was not possible to conduct a normal business without payment of bribe and fear of confiscation without reason.
British Invasion:
In this background the British arrived and violent brutality of previous invaders was replaced with gentle diplomatic loot of soft spoken officials of East India Company. But soon they too became atrocious tax collectors. When British arrived India's share in world's GDP was over 20% but when they left, it fell to less than 2% of global GDP. Regarding corruption Shashi Tharoor eloquently writes:
"...Corruption, though not unknown in India, plumbed new depths under the British, especially since the Company exacted payments from Indians beyond what they could afford, and the rest had to be obtained by bribery, robbery and even murder. Everybody and everything, as the 1923 edition of the Oxford History of India noted, was on sale…."
See: An Era in Darkness; The British Empire in India by Shashi Tharoor (2016) Aleph Book Company.
In 1857, when the East India company under Lord Dalhousie started to annex the territories of smaller Kingdoms on flimsy pretexts and gave a free hand to it's officials and priests to convert the natives (Hindus and Muslims both) to Christianity, a violent struggle for freedom broke out which was euphemistically named as "Sepoy Mutiny". It was brutally suppressed on the strength of advanced telecommunication of that time, namely telegram. But it exposed rapacious business of the Company.
The East India Company was divested of it's control of India and Queen of England declared herself to be Queen of India. This was "The Raj" which continued for next 90 years in India. In one of the first enactments for India after 1857, was "the Indian Penal Code, 1860", a penal law embodying Victorian values.
The anti corruption provisions were incorporated in Indian Penal Code of 1860 as section 161 to 165 thereof. These provisions inter alia, prohibited 'taking a gratification other than legal remuneration in respect of an official act' (Sec 161); 'Taking a gratification in order, by corrupt or illegal means, to influence a public servant' (Sec 162); 'Taking a gratification for the exercise of personal influence with a public servant' (Sec. 163); 'Abetment of these acts by public servants' (Sec 164); 'Public servant obtaining any valuable thing, without consideration, from a person concerned in any proceeding or business transacted by such public servant' (Sec. 165). All these offences were punishable with imprisonment of 3 years or fine except section 163 where it was one year imprisonment or fine. The abettor (including bribe giver) was also punishable for imprisonment of 3 years or fine.
It was quite a simple affair. Be corrupt, get prosecuted, pay fine and that'sit. The provision existed in the Penal Code of British India not to catch the corrupt but to get over with the corruption charge where proof was insurmountable as British Government had to make a pretence of rule of law and its fairness. For the record there are hardly any case of British Officer being punished under these provisions from 1860 to 1947.
The founder of British Empire in India and it's Commander in Chief Robert Clive was historically most corrupt public servant. He did have numerous deceitfully successful military adventures to his credit but at the end of the day he was a corrupt officer of East India Company who amassed so much wealth that he was a multi millionaire without ever doing any business.
Under his leadership the company on June 23, 1757, with 2,000 Indian soldiers and 800 European infantry and artillerymen, overcame Siraj-ud-Daulah's army of 50,000 at Plassey near the mango groves of Lakash Bagh. The key to his victory was the treacherous defections of three of the Nawab's commanders, Mir Jafar, Lutuf Khan and Rai Durlabh, all heavily bribed in a series of duplicitous negotiations which reflected no honour for anyone involved.
According to Tharoor (supra) Clive on his first return to England, took home £234,000 from his Indian exploits (£23 million pounds in today's money, making him one of the richest men in Europe). However Clive was sent back to India in 1765 again to reign in 'corruption' in the officers of the company.
Clive returned to Britain in 1767 with a personal fortune then estimated at 4,00,000 pounds sterling (40 millions pound of today), a vast sum. However, controversy over his character and role in the Company's activities soon led to a parliamentary inquiry. Clive spent much of his remaining life defending himself against charges that during his most recent time in India he had allowed corrupt officials to abuse monopoly rights and, even worse, that the high land taxes he had levied had precipitated the great famine in Bengal of 1769-1773. As to the accusation of enriching himself through corruption, Clive replied,:
"..an opulent city lay at my mercy; its richest bankers bid against each other for my smiles; I walked through vaults which were thrown open to me alone, piled on either hand with gold and jewels… When I think of the marvellous riches of that country, and the comparatively small part which I took away, I am astonished at my own moderation."
Clive died in London in November 1774, aged only 49, after stabbing himself with a pen-knife. His death was perhaps a result of depression. So much for the Karma.
See: 'Fortune's Soldier ' written by Alex Rutherford (a fictional biography of Robert Clive published by Hachette)
According to William Darlymple, his visit to Clive's Powis Castle in England, revealed that:
"..There are more Mughal artefacts stacked in this private house in the Welsh countryside than are on display at any one place in India – even the National Museum in Delhi. The riches include hookahs of burnished gold inlaid with empurpled ebony; superbly inscribed spinels and jewelled daggers; gleaming rubies the colour of pigeon's blood and scatterings of lizard-green emeralds. There are talwars set with yellow topaz, ornaments of jade and ivory; silken hangings, statues of Hindu gods and coats of elephant armour..."
One must add caution here many artefacts especially from Tipu Sultan's treasury were looted by Robert Clive's son Edward Clive while he was the Governor of Madras from 1798 to 1803.
In the year 2004 a 'few articles' of Clive's estate were auctioned for 4 millions pounds by Christie's. These articles were merely a few grains from the total grainery of loot.
See https://www.telegraph.co.uk/news/uknews/1460439/Clive-of-Indias-treasures-fetch-4m.html
According to Tharoor (supra) "It didn't take much to make money if you were a Briton in India. Company official Richard Barwell boasted to his father in 1765 that 'India is a sure path to [prosperity]. A moderate share of attention and your being not quite an idiot are (in the present situation of things) ample qualities for the attainment of riches.' Nabobs were often Company officials who indulged in private trade on their own account while on the Company's business. This was extraordinarily lucrative, given the Company's monopoly on its own territories: profits of 25 per cent were regarded as signs of a moderate man, and vastly higher sums were the norm.
Another author Roy Moxham has explained the method employed by Clive to make his fortune in these words:
"An 'Exclusive Company' was established whose profits would be distributed among the East India Company's senior officers according to seniority. Clive himself was given the largest number of shares. It would have an exclusive monopoly to make what profit it could on tobacco, betel nut and salt. In the three years before London forced its closure, it made a profit of over Rs 6 million, when the basic wage for Bengalis was one or two rupees a month. Once again, these profits left Bengal for Britain. Clive finally left India in 1767…..."
See: The Theft of India, The European Conquests of India, 1498–1765 by Roy Moxham (2016) published by Harper Collins Publishers India.
The point of mentioning a few of these instances is simple. It shows that in 200 years of British legacy, the Anti-Corruption provisions existed only to keep the natives in check and to keep them loyal to the British Raj. Nothing more. Britons were free to be corrupt to the hilt. It also reveals the reasons for deep rooted acceptance for corruption. It had become way of life for the rich and upper class for over 500 years.
While it may seem that the British lacked moral compass but the truth is that what Portuguese were doing in Goa was even more sinister. Talking about human trafficking by Portuguese, according to Roy Moxham:
"...Very few Portuguese women came to India and fewer still that were respectable. The men took concubines – some of whom they married – and women slaves. Goa relied on a huge population of slaves. A relatively low-ranking Portuguese might have had twenty slaves, while a man of substance might have had hundreds. Women slaves were sold semi-naked at auctions and fetched more if they were virgins…."
See: The Theft of India, The European Conquests of India, 1498–1765 Roy Moxham (2016) published by Harper Collins Publishers India.
Before going into various recent legal provisions, it shall be relevant to note the evolution of the legislation on corruption in the last 73 years of independent India.
Evolution of laws from 1947
In 1946 itself, the provisional Government found out that the existing provisions were inadequate to convict any public servant for corruption, who could easily raise frivolous defences to get out scot free. Therefore an Act No 2 of 1947 called "Prevention of Corruption Act, 1947" was enacted to introduce new concepts of burden of proving the bribe, misappropriation, obtaining pecuniary advantage, possessing assets disproportionate to income, etc. In most cases the burden of proof was now shifted to an accused to show that the transaction or possession was obtained by a public servant by lawful means.
Between 1947 to 1988 numerous public servants were prosecuted and some were convicted as well. But a review of all the cases would reveal that the convicts were small fishes. A clerk here, a bus conductor there and the like. No big fish like Secretary or Minister in the Government was ever prosecuted, much less convicted
But it was not that there were no allegations of corruption or scandals of financial nature but political bigwigs were hardly ever prosecuted. There is a list of scandals on Wikipedia but even that list is not complete. For example Malaviya-Serajuddin affair involving Sh. K.D. Malviya, a minister in the government of Jawaharlal Nehru, who was the first Prime Minister from 1947 is not mentioned. A donation of 10,000 rupees made by a mine-owner to a Congress candidate on Malaviya's request was the basis of scandal resulting his resignation.
It is another matter that Shri Malviya is considered to be father of hydro-carbon in India due to his vast knowledge and interest in the subject.
However the very first scandal which took place in independent India had already happened before 1947 with the disappearance of the Treasure of Indian National Army of Subhas Chandra Bose without a trace. But this is not a book about corrupt scandals but it is about the laws that deal with corruption. Therefore we shall stick to only those events that galvanised the Government policies and legislation due to corruption.
Pratap Singh Kairon was a freedom fighter who served prison terms during oppressive rule of the British Raj. He was member of the Congress Party and was Chief Minister of Punjab in 1964 when he had to resign on the allegations that his family had amassed huge wealth due to proximity of power. The charges against Kairon, were first presented to the executive in 1959. But the late Prime Minister Nehru preferred a Congress Party inquiry and on the basis of this enquiry, satisfied himself that the charges were baseless. The opposition leaders then presented a memorandum to the President of India. A Commission of Enquiry called 'Das Commission' was appointed to look into the memorandum submitted to the President of India. The Commission eventually exonerated Kairon from the bulk of allegations.
However when the first most popular scandal was brewing against Pratap Singh Kairon, Government in 1962 appointed Kasturiranga Santhanam (1895 – 28 February 1980), also known as Kumitithadal Santhanam, as a committee to look into the corruption in high offices. K. Sanathanam submitted a report to the Government. He noted three reasons for corruption:
1. Too many regulatory functions managed by Government,
2. Too much personal discretion in the exercise of powers vested in the hands of public servants and
3. Cumbersome procedure to seek facilities to citizens in their day to day affairs.
The detailed report was in over 300 pages and can be accessed here. However, without going into other aspects of his report, a new advisory institution was created in exercise of executive powers of Government. It was called Central Vigilance Commission or CVC. Instead of legislation, it was created under the Executive powers of the Government.
The Central Vigilance Commission (CVC) was established on 11th February,1964 by a resolution of Government of India as an apex body for prevention of corruption in Central Government institutions. It was to be free of control from any executive authority, monitoring all vigilance activity under the Central Government and advising various authorities in Central Government organizations in planning, executing, reviewing and reforming their vigilant work.
In 1965, the India-Pakistan War was on, and a blackout had been imposed on Bombay for fear of naval and air attacks by Pakistan. Hamish McDonald states the story of corruption of police on the street of Mumbai (Bombay) in these words:
"About 10 pm, Dhirubhai said: "Let's go out and take a round of the city." The two drove around the dark Bombay, with Dhirubhai bluffing police at roadblocks that he was on official business and handing out small tips often rupees or so. 'He got saluted all the way'…."
See: The Polyester Prince; Rise of Dhiru Bhai Amabani by Hamish McDonald (1999) Allen & Unwin Academic, Australia.
The aforesaid work is a critical biography of Dhirubhai Ambani who rose from rags to riches to become richest man of India with his timely political nexus to influence Govt. policies to his advantage and to the disadvantage of his opponents. A reading would reveal how it worked in action. In summing up McDonald aptly states:
"...Over decades in India, some of the world's best minds had applied themselves to building a system of government controls on capitalism. Dhirubhai Ambani made a complete mockery of it, admittedly at a stage when the system was decaying and corrupted already. The Ministry of Finance and its enforcement agencies, the Reserve Bank of India, the Central Bureau of Investigation, the Securities and Exchange Board of India and the Company Law Board proved timid and sometimes complicit in their handling of questionable episodes concerning Reliance. The public financial institutions that held large blocks of shares in Reliance and had seats on its board were passive and acquiescent spectators, rather than responsible trustees for public savings…."
Reading above, it can be said in 2020 that recent expose of numerous 'scams' and fraudulent dealings by various business houses, show that things have not changed much, ever since.
From 1947 to 1971, India had already defended itself from three wars inflicted by newly created Islamic State of Pakistan. Food security and human safety were bigger issues. Prime Minister Indira Gandhi imposed "emergency" to wield dictatorial powers in 1975 which lasted till 1977 during which civil liberty of the citizens was, an issue bigger than any other issue. However, the alternative to Indira Gandhi and her Congress Party, the Janta Party replaced her Government in 1977 but it could last only for 3 years.
In 1980 Indira Gandhi returned to power and soon Maharashtra Chief Minister A.R.Antulay, who was also from Congress Party, was accused of 'extortion' of donations for a NGO (Trust) called "Indira Gandhi Pratibha Pratishthan". Antulay had to step down from office but he never went to Jail. He was prosecuted and his case was transferred for trial to High Court under orders of Supreme Court.
See: R. S. Nayak vs A. R. Antulay decided by SC on 16 February, 1984.
Antulay was tried and convicted by Bombay High Court. The Supreme Court later held that the trial was without jurisdiction and set it aside in 1986 on this technical ground. Thus the Supreme Court decided that it'sown earlier order to transfer the case, to High Court, was without jurisdiction. New trial was never ordered.
See: A.R. Antulay vs R.S. Nayak, (decided on 29 April, 1988) AIR 1988 SC 1531, 1988 SCR Supl. (1) 1.
Meanwhile Rajiv Gandhi had became Prime Minister in 1984 and won the elections with thumping majority. He was projected as "Mr. Clean" by his campaign managers with the help of media. The campaign helped immensely to win the elections. However soon he himself found embroiled in allegations of corruption over purchase of Swiss 'Bofors' Howitzer gun. The Bofors proved to be the most virulent news which covered the nation and damaged the 'Mr. Clean' image of Rajiv Gandhi. To off set the blow from 'Bofors' a new law was enacted which replaced Act of 1947 with Prevention of Corruption Act, 1988.
Under the Act of 1988, if the offence against the public servant is proved in the courts, it was made punishable with imprisonment of not less than six months but may extend to a maximum period of five years. Thus minimum six months imprisonment is mandatory and the courts have no discretion in this regard. If public servant is found committing offence habitually, he is to be punished with imprisonment of not less than two years but not more than seven years, besides fine. But yet again, the political masters viz. Ministers were (perceived to be) beyond the scope of the law.
In 1989, the Rajiv Gandhi government failed to secure majority due to corruption and with a rag-tag coalition of partiesV.P. Singh was sworn in as Prime Minister. Earlier V.P. Singh was finance minister of Rajiv and had risen to the occasion on the high ground of opposing the corruption. Singh ensured special powers to Enforcement Directorate which was exercising powers in respect of economic offences. His tenure was known for raids on high profile people but nothing concrete on corruption, as far as law was concerned.
In 1991, P.V. Narsimha Rao, was sworn in as Prime Minister on behalf of Congress Party. His was a minority Government which lasted a full term of 5 years. It was partly due to PVN's personal chemistry with opposition leader Atal Bihari Vajpayee and partly due to corruption.
On 12th March 1993 a terrorist attack with a series of Bomb-Blasts shook the Mumbai. It was the most deadly terrorist attack on the country in which 12 blasts claimed 257 lives and injured over 713 people.
A nexus of criminals and politicians was suspected to have resulted in security lapse. Therefore a Vohra Committee was set up in July 1993 to study corruption in India by taking stock of the links between government functionaries, political personalities, crime syndicates and mafia organizations. The Committee submitted its report in October 1993. The report of this Commission exposed the nexus between terrorists, corruption and politicians. This report has never been made public officially but the same has some how found it'sway into public domain. It shall be referred in detail later.
The various Enquiry Commissions failed to inspire the confidence of either the public to believe it's sincerity or the Government's to act upon it's findings.
In 1993 itself a petition was filed by a news editor in Supreme Court complaining inertia in CBI in investigating the corruption in high places. Supreme Court gave sweeping directions in this matter from time to time. The case continued till 1997. One of the direction was to make Central Vigilance Commission (CVC) a statutory body.
The new Government of Atal Bihari Vajpayee implemented the directions and issued an Ordinance in 1998 which became an Act of Parliament in 2003.
Now CVC was to monitor the Central Bureau of Investigation (CBI) in respect off corruption cases but CVC was not to interfere in the 'investigation'. What does that even mean? What kind of supervision does it entail? Actually it discloses distrust in CVC and CBI, both. Distrust does not help institution building.
In 2003 itself, the Government passed a new law called Prevention of Money Laundering Act, 2003. This was to give effect to Political Declaration adopted by the Special Session of the United Nations General Assembly held on 8th to 10th June, 1998. The Enforcement Directorate was the agency for implementation of this law. But it was a halfhearted and weak legislation. Sweeping changes were made in this law in 2015. Some of these amendments will address problems posed by Vohra Committee in 1993 that is 22 years after the recommendation. In Chapter 10 we shall discuss more about this law.
Between 2004 to 2014, Manmohan Singh was Prime Minister on behalf of United Front put up by Congress Party. As a professional economist he was expected to rise above the political rot which was mired in corruption but he did not prove any better. Inflation was out of control. Rupee fell by 45% against dollar, it's worst ever performance. Scam after scams were happening. There were agitations in Delhi demanding a Lokpal or Ombudsman with powers to investigate Prime Minister and Ministers.
Lok Pal Bills were introduced in the Lok Sabha five times in 29 years (1968, 1971, 1977, 1985 and 1989) for appointing the Lok Pals but these bills were never passed. The government had introduced the Lok Pal Bill in the parliament in September 1996 too, but it was not passed.
However this time the Manmohan Singh Government speeded up the things and the Lok Pal bill was passed in 2013 and became the Act No. 1 of 2014. As we shall notice later, it is more of a scare crow than of a real authority for it has to seek permission of the Government to make serious investigation against Ministers.
In 2014, Narendra Modi was sworn as the Prime Minister of India and in 2015, the Prevention of Money Laundering Act was thoroughly amended. On 8th November 2016 large currency notes of denomination above 500 were declared invalid with liberty to exchange it through bank for few days in limited amount. Rest were to deposit the entire cash in Bank account. It brought in almost all the cash within verifiable identification trail.
The new taxation system of GST introduced next year, also eliminated a large portion of corrupt taxation system. But, as we shall see, in the Chapter on Watchdogs the system of enforcement of anti corruption laws is fundamentally flawed and complicate things rendering it dysfunctional at too many stages. A platitude of institutions have been created to 'satisfy' the public but in reality these institutions overlap each other when they are not hampering the work of each other.
As per Transparency International website in 2019 India was given 41 marks in the index of Corruption rating which ranges from 0 to 100, with zero standing for corruption free country.
See https://www.transparency.org/cpi2018
These marks, a few year ago stood at 38. The marginal improvement is more on account of self imposed restraint of Government rather than permanent institutional reforms.
Criminal justice system mandates that any investigation into the crime should be fair, in accordance with law and should not be tainted. It is equally important that interested or influential persons are not able to misdirect or hijack the investigation so as to throttle a fair investigation resulting in the offenders escaping the punitive course of law. These are important facets of rule of law. Breach of rule of law, in our opinion, amounts to negation of equality under Article 14.
See: Subramanian Swamy v. CBI, (2014) 8 SCC 682.
Two ex Chief Ministers of Bihar are convicted for acts of corruption and were serving their sentences of imprisonment. One died while this book was in progress. An ex Chief Minister along with his ex Minister son, from Haryana are serving their sentences for corruption in Tihar Jail at Delhi. It was unthinkable in Nehru and Indira era and certainly did not happen then.
Corruption charges were also levelled against two Chief Ministers of Tamil Nadu and West Bengal in 1995. The Tamil Nadu Chief Minister was also convicted along with her associate. The charge abated due to death of Chief Minister but her associate was convicted and is presently serving her sentence inside the prison. However this case arose out of a private complaint for possession of disproportionate assets.
See: State of Karnataka vs Selvi J. Jayalalitha decided by SC on 14 February, 2017.
A former Finance/Home Minister was arrested and is presently on bail awaiting Trial for his acts of corruption committed while in office and a few more members of his party were also arrested and are under investigation.
The upshot of above discussion is that with so much legislation and display of will to deal with corruption, it remains less effective as increase in number of institutions to deal with corruption does not automatically reduce the corruption. If India's experience is to be believed, just reverse happens. More discussion about these institutions shall be discussed in Chapter 4 dealing with 'The Watchdogs'.
Let's first understand what exactly is corruption and which part of it is punishable.
Leave a Response