Disproportionate Assets Liability: Prevention of Corruption Act, 1988

The author in this article discusses the disproportionate assets liability under the Prevention of corruption act and that the possession of disproportionate assets under the act itself constitutes an offence of criminal misconduct.

Under the Prevention of Corruption Act, 1988, (the Act) the possession of disproportionate assets itself constitutes an offence of criminal misconduct. Based on the unstated presumption that the assets to the extent they are disproportionate are acquired by corrupt, illegal means, or by abuse of official position, without a requirement of any proof thereof is a unique provision.

It may be pertinent here to mention that this kind of offence was for the first time included in the statute books with the introduction of clause (e) in subsection 5(1) of the erstwhile Prevention of Corruption Act, 1947. The clause was added through the Criminal Law Amendment Act, 1964 (No. 40 of 1964) based on the recommendation of the Santhanam Committee, appointed by the Government of India.

43rdand 44th points of the Santhanam Committee Reportsuggest the following in relation to the Prevention of Corruption Act:

43. (i) The words ‘in the discharge of his duty’ should be deleted from Section 5of the Prevention of Corruption Act.

(ii) Possession of assets by a public servant disproportionate to his known sources of income for which he cannot satisfactorily account should be brought within the definition of criminal misconduct and treated as a substantive offence.

(iii) Habitual corrupting of public servants or abetment of such conduct should be made a substantive offence by the addition of anew sub-section.

A draft of Section 5 incorporating the above suggestions is given.

44. Section 5A of the Prevention of Corruption Act may be amended so as to authorize all Inspectors of the Special Police Establishment and such Officers of similar rank of the Anti-Corruption agencies of the State Governments to be specified by the respective State Government by general or special orders to make investigations without obtaining the permission of a Magistrate.

Before it became a substantive offence for the first time in 1964, the possession of disproportionate assets by a public servant was merely a rule of evidence defined in subsection 5(3) of the Prevention of Corruption Act, 1947, providing for an alternative method of proving the offence of criminal misconduct as it then existed. The Government of India repealed the Prevention of Corruption Act 1947 and replaced it by the Prevention of Corruption Act, 1988.

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Topics Covered in this article

What Constitutes an Offence?

As laid down in Section 13(1)(e) of the Act, apublic servant is said to commit an offence of criminal misconduct of possession of disproportionate assets, “if he or any person on his behalf, is in possession or has, at any time during the period of his office, been in possession for which the public servant cannot satisfactorily account, of pecuniary resources or property disproportionate to his known sources of income”.

Thus, a public servant renders himself liable under section 13 of the Act if he or any person on his behalf, at any time during the period of his service, is in possession of such pecuniary resources or property that are disproportionate to his known sources of income and if he cannot satisfactorily account for such disproportion.

The offence on the part of the public servant is his being in possession of assets disproportionate to his known sources of income and his not being able to account for the disproportion. The public servant commits the offence by neither a specific act of his, nor on any day relatable to any act of his. He commits the offence not merely by acquiring assets but by being in possession of assets and such assets of which he is in possession being disproportionate to his known sources of income. Acquisition of assets or possession thereof per se does not constitute an offence.

What are Disproportionate Assets?

The assets are disproportionate if on a given date chosen for the purpose, they exceed his/her total savings in relationto the total expenditure incurred by him/her. It is an offence only if the assets are disproportionate to his known sources of income.  The date of commission of the offence is the day chosen for the purpose, on which date it is established that the public servant is in possession of disproportionate assets whatever be the date of acquisition of the assets.

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What are the known Sources of Income?

TheAct has defined the expression ‘known sources of income’ by way of an explanation attached to clause (e) of subsection 13(1) of the Act in the following words: –

Known sources of income means income received from any lawful source, and such receipt has been intimated in accordance with the provisions of any law, rules or orders for the time being applicable to a public servant.

Therefore, for a source of income to qualify as a known source of income for the purposes of section 13(1)(e) of the Act it is essential that it satisfies the following two conditions, namely: –

  1. It should be a lawful source of income.
  2. The receipt of income from such a source should have been intimated as per the provisions of any law, rules or orders for the time being applicable to the concerned public servant.

As a natural corollary, it immediately follows that any income received from a source which is not lawful cannot be considered for inclusion in the known sources of income for the purposes of section 13(1)(e) of the Act, even if such an income was actually received by the concerned public servant, and any income, even though received from a lawful source, cannot likewise be considered for the inclusion for the aforesaid purposes, if the receipt of such income has not been intimated in accordance with the provisions of any law, rules or orders for the time being applicable to the concerned public servant.

Thus, it is obvious that even if the existence of a particular source of income is proved by a public servant, unless it satisfies the aforesaid both essential conditions of lawful source and receipt of income having been intimated, it cannot be considered as a known source of income while ascertaining whether or not, an offence of possession of pecuniary resources or property disproportionate to known sources of income, under section 13(1)(e) of the Acthas been made out.

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Conclusion

The Prevention of Corruption Act has evolved under the guidance of reports and committees for better transparency and prevention of illegal acts of government officials. This act has always aimed to be a benefit to the public who trust the government officials for aiding them in the smooth and fair functioning of their work.

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