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2016-07-22
1. Background:
1.1 The Lokpal and Lokayuktas Act, 2013 (“the Act”) was enacted by the Parliament with effect from 16th January 2014 to provide for the establishment of a body of Lokpal for the Union and Lokayukta for States to inquire into allegations of corruption against certain public functionaries.
1.2 Essentially, the Act applies to public servants in and outside India. For this purpose, the definition of “public servant” covers, inter-alia, Ministers, Members of Parliaments, Government Officers, etc. The definition also covers office bearers of certain charitable institutions.
This article explains the provisions of the Act as applicable to office bearers of charitable institutions.
2. Text of relevant sections
Section 44 of the Act – Declaration of assets
“(1) Every public servant shall make a declaration of his assets and liabilities in the manner as provided by or under this Act.
(2) A public servant shall, within a period of thirty days from the date on which he makes and subscribes an oath or affirmation to enter upon his office, furnish to the competent authority the information relating to—
(a) the assets of which he, his spouse and his dependent children are, jointly or severally, owners or beneficiaries;
(b) his liabilities and that of his spouse and his dependent children.
(3) A public servant holding his office as such, at the time of the commencement of this Act, shall furnish information relating to such assets and liabilities, as referred to in subsection (2), to the competent authority within thirty days of the coming into force of this Act.
(4) Every public servant shall file with the competent authority, on or before the 31st July of every year, an annual return of such assets and liabilities, as referred to in sub-section (2), as on the 31st March of that year.
(5) The information under sub-section (2) or sub-section (3) and annual return under sub-section (4) shall be furnished to the competent authority in such form and in such manner as may be prescribed.
(6) The competent authority in respect of each Ministry or Department shall ensure that all such statements are published on the website of such Ministry or Department by 31st August of that year.
Explanation.—For the purposes of this section, "dependent children" means sons and daughters who have no separate means of earning and are wholly dependent on the public servant for their livelihood.”
Section 2(1)(o) – Definition of “public servant”
“‘Public servant’ means a person referred to in clauses (a) to (h) of sub-section (1) of section 14 but does not include a public servant in respect of whom the jurisdiction is exercisable by any court or other authority under the Army Act, 1950, the Air Force Act, 1950, the Navy Act, 1957 and the Coast Guard Act, 1978 or the procedure is applicable to such public servant under those Acts;”
Section 14 – Jurisdiction of Lokpal (as relevant to office bearers of public trusts):
“(1) Subject to the other provisions of this Act, the Lokpal shall inquire or cause an inquiry to be conducted into any matter involved in, or arising from, or connected with, any allegation of corruption made in a complaint in respect of the following, namely:—”...
(g) any person who is or has been a director, manager, secretary or other officer of every other society or association of persons or trust (whether registered under any law for the time being in force or not), by whatever name called, wholly or partly financed by the Government and the annual income of which exceeds such amount as the Central Government may, by notification, specify;
(h) any person who is or has been a director, manager, secretary or other officer of every other society or association of persons or trust (whether registered under any law for the time being in force or not) in receipt of any donation from any foreign source under the Foreign Contribution (Regulation) Act, 2010 in excess of ten lakh rupees in a year or such higher amount as the Central Government may, by notification, specify.”
Explanation.—For the purpose of clauses (f) and (g), it is hereby clarified that any entity or institution, by whatever name called, corporate, society, trust, association of persons, partnership, sole proprietorship, limited liability partnership (whether registered under any law for the time being in force or not), shall be the entities covered in those clauses:”
3. Preconditions for applicability:
An office bearer of a charitable institution is regarded as a public servant in the following two situations, if ALL conditions mentioned hereinbelow are fulfilled:
Situation 1:
(a) The person is or has been a director, manager, secretary or other officer of an entity or institution [section 14(1)(g)].
(b) Such entity or institution may be a corporate, society, trust, association of persons, partnership, sole proprietorship, limited liability partnership, etc. [Explanation to section 14(1)]
(c) The entity or institution is wholly or partly financed by the Government [section 14(1)(g)]
(d) The annual income of the entity or institution exceeds a sum notified by the Central Government [section 14(1)(g)].
[The Central Government has specified that office bearers of institutions which receive grants or financial assistance from Central Government in excess of Rs. 1 crore in a year will be covered by this clause (see Notification No. S.O. 2155(E) dated 20th June 2016)]
Situation 2:
(a) The person is or has been a director, manager, secretary or other officer of an entity or institution [section 14(1)(h)].
(b) The institution is a society or association of persons or trust [section 14(1)(h)].
[It may be noted that Explanation to section 14(1) does not apply to clause (h)]
(c) The institution is not covered in section 14(1)(f) of the Act [see para 2(ii) of Notification S.O. 2156(E) dated 20th June 2016].
(d) The institution receives donation [section 14(1)(h)].
(e)The donations are from a foreign source as defined in the Foreign Contribution (Regulation) Act, 2010 (“FCRA”) [section 14(1)(h)]
(f)The donations referred to in (e) above exceed Rs.10 lakh in a year or such higher amount as the Central Government may notify* [section 14(1)(h)].
* The Central Government has not notified any higher amount as yet.
4. Consequences if conditions are satisfied:
If the conditions in Situation 1 or Situation 2 are satisfied,
(a) The public servant shall be deemed to be a public servant under section 2(c) of the Prevention of Corruption Act, 1988 (“PCA”) and the provision of PCA shall apply to him.
(b)(i) The public servant shall make a declaration of his assets and liabilities [section 44(1)]
(ii) The public servant shall file with the competent authority an annual return.
(iii) Such return shall be in the prescribed form.
(iv) Such return shall be filled with the competent authority.
(v) Such return shall be filed on or before 31st July of every year.
(vi) The assets and liabilities shall be as on 31st March of that year.
(vii) The assets shall be such in which he is jointly or severally an owner or beneficiary.
(viii) The assets shall include the assets of his spouse and dependent children.
(ix) The liabilities shall include those of his spouse and dependent children.
(x) The information shall be furnished to the competent authority in such form and in such manner as may be prescribed.
(xi) The competent authority in respect of each Ministry or Department shall ensure that all such statements are published on the website of such Ministry or Department by 31st August of that year.
For the above purposes,
(i) “dependent children” means sons and daughters who have no separate means of earning and are wholly dependent on the public servant for their livelihood [Explanation to section 44].
(ii) the Central Government has notified Minister-in-charge of the Ministry of Home Affairs as competent authority [Notification No. S.O.2156(E) dt. 20/06/2016].
(iii) the Central Government has notified Minister-in-charge of the Ministry or Department of the Government of India providing financial assistance as competent authority [Notification No. S.O.2154(E) dt. 20/06/2016].
(c) The Lokpal is empowered to inquire into any matter arising from any allegation of corruption made in a complaint in respect of such public servant [section 14(1)]. However, he cannot inquire or investigate into any complaint made after the expiry of a period of seven years from the date on which the offence mentioned in such complaint is alleged to have been committed [section 53].
(d) It appears that the requirement to furnish information within 30 days of becoming office bearer, etc. is not applicable to officer bearers under Situation 2 [please see para 6.12].
5. Consequences of non-compliance with the requirement to file annual return
An asset shall be presumed to belong to the public servant and shall be presumed to be assets acquired by corrupt means if he
(a) fails to declare his assets; or
(b) gives misleading information in respect of his assets and is found to be in possession of assets not disclosed or in respect of which misleading information was furnished.
The presumption
(a) will not apply unless such failure is wilful or for reasons which are not justifiable;
(b) is rebuttable and will not apply if the servant proves otherwise.
[section 45]
The competent authority is empowered to condone or exempt a public servant from furnishing information in respect of assets not exceeding a prescribed minimum value [proviso to section 45].
6.Analysis for situation 2, that is, office bearers of institutions receiving foreign donations
6.1 Competent Authority
Hitherto, the requirement of filing the information / annual return was not enforceable in respect of such trustees since the Government had not appointed a Competent Authority to whom the information / annual return could be furnished. On 20th June, 2016, the Government appointed Minister-in-charge of the Ministry of Home Affairs as Competent Authority for this purpose [Notification No. S.O.2156(E) dt. 20/06/2016]. Hence, every office bearer of an institution covered by the Act and which has received donation of an amount exceeding Rs.10 lakhs in a year from a foreign source as defined in FCRA is now required to file his personal information with the Competent Authority.
6.2 Director, Manager etc. - Meaning
A person is regarded as a public servant only if he is or has been director, manager, secretary or other officer of the entity.
(a) “Director”
The term is normally applicable to companies and not to societies or trusts. However, in case an entity refers to the officer as director, then such director would be covered by the Act.
(b) “Manager”
The term ‘manager’ has been judicially explained / defined in other contexts as follows:
(i) “manager" means an individual who, subject to the superintendence, control and direction of the Board of Directors, has the management of the whole, or substantially the whole, of the affairs of a company, and includes a director or any other person occupying the position of a manager, by whatever name called, whether under a contract of service or not” [section 2(53) of the Companies Act, 2013]
(ii) In Words & Phrases legally defined (Butterworths, 3rd, pg. 93) the phrase "manager of the company" is explained thus :
"The phrase "manager of the company", prima facie, according to the ordinary meaning of the words, connotes a person holding, whether de jure or de facto, a post in or with the company of a nature charging him with the duty of managing the affairs of the company for the company's benefit."
The Court of Appeal, in its judgment in Re a Company, (1980)1 All ER 284, interpreted Section 441 of the Companies Act 1948. The question was whether an employee had committed an offence in connection with the management of a company's affairs. Lord Denning M. R. held thus :
"The expression "manager" should not be too narrowly construed. It is not to be equated with a managing or other director or a general manager. As I see it, any person who in the affairs of the company exercises a supervisory control which reflects a general policy of the company for the time being or which is related to the general administration of the company is in the sphere of management. He need not be a member of the board of directors. He need not be subject to specific instructions from the board. If he fulfils a function which touches the central administration of the company, that in my view is sufficient to constitute him an officer or manager of the company for the purposes of Section 441 of the 1948 Act."
[Inthru Noronha v. Colgate Palmolive (India) Ltd., (2005) 3 Bom CR 805, 2005-III-LLJ-96 (Bom), (2005) 2 Mhlj 884]
Thus, essentially “manager” is a person whose duty is to manage an organization.
It is not clear whether employees who are merely designated as manager of a particular department (e.g. Accounts Manager, Estate Manager, etc.) but who are not managers “of” the institution and who do not “manage” the institution are covered. It appears that whether a person is a manager or not would also depend on his role, responsibilities, etc.
(c) “Secretary”
The term “secretary” has been judicially explained in other contexts as follows:
Ordinarily, the functions of a secretary of a corporation would be ministerial and administrative. As a secretary only, he would have no authority to bind the corporation by entering into contracts or other commitments on its behalf [Lakshmiratan Cotton Mills Co. Ltd. v. Aluminium Corporation of India Ltd., AIR 1971 SC 1482, (1971) 2 SCC 623 (SC) ; Naganath v. Common Cadre Committe, ILR 2001 Kar 1716, (2001) ILLJ 655 Kant]
It appears that the expression covers secretary of a governing council (say, in the context of a society registered under the Societies Registration Act, 1860) and also secretary of a trust looking after statutory and ministerial functions.
(d) “Officer”
The term ‘officer’ has been judicially explained / defined in other contexts as follows:
(i) “"officer" includes any director, manager or key managerial personnel or any person in accordance with whose directions or instructions the Board of Directors or any one or more of the directors is or are accustomed to act;” [section 2(59) of the Companies Act, 2013]
(ii) The ordinary dictionary meaning of the term 'Officer' is:
"A person appointed or elected to a position of responsibility or authority in a Government, society etc.”
[Mohinder Singh v. State of Haryana, AIR 1989 SC 1367, (1989) 2 SCR 437].
(iii) The expression 'officer' in the dictionary sense means one who holds an office. In relation to companies or societies, it is a person who holds and takes part in the management or direction of a society or institution, for instance, one who is holding the office of President, Treasurer or Secretary. Associations and corporate bodies have normally these officers. But the list is not exhaustive
[Sarbeswar Bardoloi v. U. K. Gohain, AIR 1955 Assam 148].
Thus, the term ‘officer’ includes office bearers such as governing council members, trustees, managing committee members, etc.
It is not clear whether employees who are merely designated as officer (e.g. Accounts Officer, Estate Officer, etc.) but who are not officers “of” the institution are covered. It appears that whether a person is an officer or not would also depend on his role, responsibilities, etc.
6.3 Office bearer remains public servant even after cessation of office
The definition covers a person who “is or has been” a director, trustee, etc. Hence, a person remains a public servant even after his resignation. Notification S.O. 2156(E) states that the trustee needs to file the annual returns only until the foreign donations are utilised. However, it appears that on a literal reading, that fact by itself cannot mean that the trustee is no longer a public servant. It may be argued that a trustee once covered under section 14 continues to remain a public servant for the rest of his life, although
(a) he may no longer have to file annual return;
(b) he may not be liable to be preceded against by the Lokpal by virtue of limitation in section 53 (see para 4(c) above)
6.4 Trustee for short period – whether covered?
Strictly speaking, a person is covered by the definition even if he is a trustee or manages the organisation for even one day during the year.
6.5 Nationality or place of residence – whether relevant?
The office bearer may be-
(a) in India or outside India [section 1(3) of the Act];
(b) a citizen of India or not
6.6.The institution should be a society, association of persons or trust. It may or may not be registered under any law.
(a) “Society”
(i) The expression “every other society” means a society not covered by section 14(1)(f) of the Act, that is, a society established by an act of parliament or wholly or partly financed by the Central Government or controlled by it [Notification No. S.O.2156(E) dt. 20/06/2016].
(ii) On a literal reading, the term ‘society’ will include societies registered under the Societies Registration Act, 1860 as well as co-operative societies.
(iii) The society may be formed for any purpose, namely, literary, scientific or charitable or for any purpose described in section 20 of the Societies Registration Act, 1860.
(iv) The society may be regulated under other statute (e.g. the Maharashtra Public Trust Act, 1950).
(b) “Association of persons”
The term has been judicially explained as follows:
(i) An association of persons must be one in which two or more persons join in a common purpose or common action [CIT v. Indira Balkrishna, (1960) 39 ITR 546 (SC), [TS-7-SC-1960-O]].
(ii) Association of persons can be formed only out volition of parties and not when persons join together by operation of law [CIT v. Govindbhai Mamaiya, (2014) 367 ITR 498 (SC), [TS-5011-SC-2014-O]].
(c) “Trust”
On a literal reading, the expression ‘trust’ covers all trusts whether
(i) specific or discretionary
(ii) public or private
(iii) charitable or non-charitable
(iv) religious or non-religious
(v) regulated under other statutes (e.g. the Maharashtra Public Trust Act, 1950) or not
Further, it has been held that religious trusts could be public trust or private trust [see Mahant Ram Saroop Dasji v. S. P. Sahi, AIR 1959 SC 942].
However, having regard to the objective to cover “public functionaries” (see the Preamble to the Act), it appears that the expression should be restricted to public charitable or religious trusts.
(d) Companies, partnerships, Limited Liability Partnerships - whether covered?
For Situation 1, it is expressly clarified that office bearers of companies, partnerships, LLPs are public servants. However, the clarification does not apply to Situation 2 [see Explanation to section 14(1)]. Hence, in the context it appears that it does not cover companies, partnerships, LLPs, etc.
If companies are ostensibly excluded because they are governed and regulated by the Companies Act, then it is pertinent that so far as trusts in Gujarat and Maharashtra are governed, they are also governed by the Maharashtra Public Trusts Act and Gujarat Public Trusts Act respectively.
6.7 The entity may be registered under FCRA or not: it may have obtained a prior permission under FCRA.
6.8 “Donation”
The institution should receive ‘donations’ exceeding Rs.10 lakhs from a foreign source.
(a) The term ‘donation’ has been judicially explained as follows:
(i) When a person gives money to another without any material return, he donates that sum. An act by which the owner of a thing voluntarily transfers the title and possession of the same from himself to another, without any consideration, is a donation. A gift or gratuitous payment is, in simple English, a donation
[CIT v. P.V.G. Raju, (1975) 101 ITR 465 (SC), [TS-5046-SC-1975-O]]
(ii) It is true that when amounts are given to public institutions by way of charity they are normally referred to as donations, but there is no warrant for saying that in common parlance or in legal terminology, gifts and donations can be regarded as mutually exclusive. It is only a monetary gift to an institution which is called a donation. Donation is thus only a type of gift
[Nirmala Keshavlal v. CED, (1982) 138 ITR 604 (Bom), [TS-5420-HC-1982(BOMBAY)-O]]
In the context, it appears that it covers donations to public charities, institutions and not gifts to private individuals, entities.
(b) Receipts other than donations (e.g. loans, sale proceeds, etc.) are not covered.
(c) The provision applies to only “donations” from a foreign source. It does not use the phrase “foreign contribution”. The definition of “foreign contribution” under FCRA is wider and includes “donation, delivery or transfer” made by any foreign source. Also, FCRA considers even donations received through intermediaries or secondary income arising out of the foreign contribution (such as interest on foreign donation) as foreign contribution [see Explanations 1 and 2 to section 2(1)(h) of FCRA]. However, it appears that in the absence of use of the phrase “foreign contribution” in the Act, it appears that this wide meaning cannot be imported into the Act.
6.9 “Foreign source”
The donation should be received from a “foreign source”.
The term ‘foreign source’ has been defined in FCRA [see section 2(1)(j) of FCRA].
From the definition, the following important exclusions can be derived:
(a) Non-resident Indians who are not foreign citizens;
(b) Subsidiaries in India of foreign companies;
(c) Indian companies in which foreign companies and others own more than 50% shares;
(d) Any LLP formed in India even if 99% of its profits / assets belong to a foreign source
However, the definition includes:
(a) Persons of Indian Origin (PIOs) who have taken foreign citizenship;
(b) 100% subsidiary of an Indian company, including a company formed overseas by a PSU (say, 100% subsidiary of ONGC);
(c) any LLP formed outside India by Indian entities.
6.10 “Year”
The donation should be in excess of Rs.10 lakhs from foreign source under the FCRA in a year. For this purpose, “year” means calendar year [section 3(66) of the General Clauses Act, 1897].
6.11 Whether initial statement of information is required to be filed?
Section 44(2) provides that a public servant shall, within a period of thirty days from the date on which he makes and subscribes an oath or affirmation to enter upon his office, furnish to the competent authority the information relating to-
(a) the assets of which he, his spouse and his dependent children are, jointly or severally, owners or beneficiaries;
(b) his liabilities and that of his spouse and his dependent children.
Thus, an initial statement of assets and liabilities is required to be given by public servant within 30 days from the date on which he “makes and subscribes an oath or affirmation” to enter upon his office.
Now, “oath” has been explained as follows:
(a) In this Act, and in all Central Acts and Regulations made after the commencement of this Act, unless there is anything repugnant in the subject or context,...
"oath" shall include affirmation and declaration in the case of persons by law allowed to affirm or declare instead of swearing;
[As defined in section 3(37) of the General Clauses Act, 1897]
(b) A solemn statement in the name of God made by the member of a Legislature before he takes his seat in the House affirming his allegiance to the Constitution and his resolve to uphold the sovereignty and integrity of the country (Constitutional and Parliamentary term)
(The Major Law Lexicon by P. Ramanatha Aiyar, Vol. 4, 4th edn.)
(c) An ‘oath’ is a form of attestation by which a person signifies that he is bound in conscience to perform an act faithfully and truthfully. It involves the idea of calling in God to witness what is averred as truth, and it is supposed to be accompanied with an invocation of His vengeance or renunciation of His favour in the event of falsehood. Oath includes affirmation
[Haridasan Palayil v. Speaker, Kerala Legislative Assembly, AIR 2003 Ker 328]
(d) A solemn appeal to God (or to something sacred) in witness that a statement is true or a promise binding; an act or swearing; the form of words in which such a statement or promise is made
(Legal Glossary 1992 published by the Ministry of Company Affairs, Law Justice)
“Affirmation” has been explained as follows:
(a) ‘Affirmation’ means a solemn declaration without oath. Wharton’s Law Lexicon. Under Section 5 of the Oaths Act, 1969, a witness, interpreter, or juror may, instead of making an oath, make an affirmation.
‘Affirmation’ means a solemn declaration made under the penalties of perjury by a person who conscientiously declines taking an oath. Webster’s Seventh New Collegiate Dictionary.
(Encyclopaedic Law Dictionary by Dr. A. R. Biswas, 3rd Edn. 2008)
(b) A positive declaration, Webster Law Dictionary, p. 35 (Wharton’s Law Lexicon, 16th Edn).
(c) A solemn declaration without oath (Legal Glossary 1992 published by the Ministry of Company Affairs, Law Justice).
In a case of a trustee or a managing committee member in a society, it appears that there is no statutory requirement to take an oath or make an affirmation upon becoming a trustee.
Further, Article 99 of the Constitution of India reads as follows:
“Every member of either House of Parliament shall, before taking his seat, make and subscribe before the President, or some person appointed in that behalf by him, an oath or affirmation according to the form set out for the purpose in the Third Schedule.”
Thus, members of parliament have to “make and subscribe an oath or affirmation”, which is the same as the expression used in section 44(2).
[Further, all government employees are also required to take an oath / make an affirmation as per Department’s Handbook].
In view of the above, it appears that this requirement to submit initial statement is applicable to members of parliament and other public servants but not to trustees or managing committee members of charitable trusts or society.
7. Annual return
7.1 An annual return is required to be furnished by a public servant till the foreign donations received by the trust are fully utilised [Notification No. S.O.2156(E) dt. 20/06/2016]. However, there could be certain types of donations which may not be utilised at all, such as corpus donation. In such a case, it is not clear till when is such annual return required to be furnished.
7.2 Such annual return is required to be filed by 31st July of every year [section 44(4)].
7.3 The annual return requires information in following forms:
|
Form No. |
Regarding |
|
I |
Details of Public Servant, his / her spouse and dependent children |
|
II |
Statement of movable property as on the 31st March, 20___ |
|
III |
Statement of immovable property or as on the 31st March, 20___ |
|
IV |
Statement of Debts and Other Liabilities as on the 31st March, 20___ |
[Please click here to see the format (revised) of the Forms]
7.4 Notes to assist in filling up the abovereferred forms are given in the attached Exhibit.
7.5 The physical copy of the duly-filled annual return, along with a covering letter, should be addressed to the Minister-in-charge of the Ministry of Home Affairs.
8. Issues:
8.1 The information seeks details of assets and liabilities of trustees, etc. Now, the assets of a trustee could increase significantly on account of his personal activities and income unlike a Government employee whose known sources of income are very limited.
8.2 The Supreme Court in Unni Krishnan v. State of Andhra Pradesh, AIR 1993 SC 2178 has stated that the expression personal liberty in Article 21 of the Constitution includes the right to privacy [also laid down in Govind v. State of Madhya Pradesh, AIR 1975 SC 1378 (para 28) (Source: Shorter Constitution of India by D. D. Basu, 14th, 2009, pg. 372)].
Also, in the context of the Right to Information Act, 2005, the Supreme Court in Girish Ramchandra Deshpande v. CIC, SLP (Civil) No. 27734 of 2012 (order dated 3rd October 2012), has observed that the disclosure of personal information of an individual which has no relationship to any public activity or public interest would cause unwarranted invasion of privacy of that individual.
In view of the above, it is a moot point as to whether this requirement to give information regarding assets and liabilities and to put it in public domain violates Article 21 of the Constitution?
8.3 In Vinita Singla v. UOI, W.P.(C) 6010/2014, the petitioner was the wife of a public servant. She impugned that section 44(2) and 44(6) of the Act compelled the disclosure of income earned and assets owned by spouses of public servants, who are not public servants themselves. It was submitted that this provision invaded her right to privacy.
The Delhi High Court considered the submissions and observed as follows:
“Prima facie, there is merit in the petitioners contention that as a private citizen, the indirect method adopted by Section 44 in compelling disclosure, which is essentially falling within her exclusive control, results in violation of Article 21. However, this aspect requires to be gone into. At the same time, in the absence of an interim order, there is likelihood of prejudice.
Balancing all these factors, the petitioner shall comply with Rule 3 by furnishing the particulars in a sealed cover to be submitted by her husband to the respondents, which in turn be furnished to the competent authority under the Rules. This interim order shall subsist till the final disposal of the petition.
It shall be the responsibility of the competent authority to ensure that the secrecy of the declaration is maintained during the pendency of the proceedings.”
8.4 Now, preamble to a statute can be referred to in interpreting a provision [CWT v. Chander Sen, (1986) 3 SCC 567 cited in Uttam v. Saubhag Singh, SLP Civil No. 6036 of 2014]. The preamble to the Lokpal Act reads as follows:
“AND WHEREAS India has ratified the United Nations Convention Against Corruption;
…
NOW, THEREFORE, it is expedient to enact a law, for more effective implementation of the said Convention and to provide for prompt and fair investigation and prosecution in cases of corruption”
Thus, the Act has been enacted to give effect to the UN convention. Now, Article 10 of United Nations Convention Against Corruption reads as follows:
“Article 10. Public Reporting
Taking into account the need to combat corruption, each State Party shall, in accordance with the fundamental principles of its domestic law, take such measures as may be necessary to enhance transparency in its public administration, including with regard to its organization, functioning and decision- making processes, where appropriate. Such measures may include, inter alia:
(a) Adopting procedures or regulations allowing members of the general public to obtain, where appropriate, information on the organization, function- ing and decision-making processes of its public administration and, with due regard for the protection of privacy and personal data, on decisions and legal acts that concern members of the public;
(b) …
(c)…”
Thus, the Convention requires each State to give due regard for the protection of privacy and personal data at the time of public reporting of information pertaining to the public servants.
Further, Article 13 of the Convention reads as follows:
“Article 13. Participation of society
1. Each State Party shall take appropriate measures, within its means and in accordance with fundamental principles of its domestic law, to promote the active participation of individuals and groups outside the public sector, such as civil society, non-governmental organizations and community-based organizations, in the prevention of and the fight against corruption and to raise public awareness regarding the existence, causes and gravity of and the threat posed by corruption. This participation should be strengthened by such measures as:
(a) …
(b) …
(c) …
(d) Respecting, promoting and protecting the freedom to seek, receive, publish and disseminate information concerning corruption. That freedom may be subject to certain restrictions, but these shall only be such as are provided for by law and are necessary:
(i) For respect of the rights or reputations of others;
(ii) …”
Therefore, the Convention further requires each State to provide restrictions on public access of information and respect the rights and reputation of others.
In light of the above, it may be argued that the provision for public disclosures under section 44(6) is not in accordance with this International Convention to which the Government of India has ratified and which is the basis on which the Act was enacted.
8.5 The Lokpal and Lokayuktas and other related law (Amendment) Bill, 2014 was introduced in the Lok Sabha in 2014. It, inter alia, seeks to (a) omit section 44(5) which deals with information and annual return to be furnished to competent authority in the prescribed manner, substitute section 44(6) by the following:
"(6) Notwithstanding anything contained in any other law for the time being in force, the competent authority shall, in public interest, ensure that the information referred to in sub-section (2), is published in such manner as may be prescribed, by 31st August of that year.”
Thus, the Amendment Bill dispenses with the requirement to put up the information in the public domain; instead it requires the Central Government to prescribe the manner in which information furnished by public servants of different categories is to be published by the competent authorities keeping public interest in view.
8.6 The Standing Committee in its Seventy-Seventh Report on the proposed Amendment Bill (presented to the Rajya Sabha on 7th December 2015) has also recommended as follows:
(a) Information of independent spouse and children should not be sought because, inter-alia, such declaration may even be held to be in breach of their right to privacy guaranteed under Article 21 or even violative of Article 14 of the Constitution of India.
(b) Disclosure should be restricted to the particulars of dependent spouse, dependent children and any other person dependent on the public servant.
(c) The public disclosure of assets and liabilities of public servants is not necessary since it might lead to misuse of information by miscreants and criminals and may endanger the safety and security of the public servants and their family members.
(d) The declaration should be made to the Competent Authority who should forward a copy of the assets and liabilities so declared by the public servant to the Lokpal who shall keep these declarations in a fiduciary capacity. Both the competent authority and the Lokpal would be competent to review the returns filed by the public servants in suspicious cases.
In the circumstances, it is a moot point as to what extent is the insistence on compliance with existing law (and display on website) justified.
8.7 Under the Act (as it stands today), the Chairperson and Members of Lokpal are required to be appointed on the recommendation of Selection Committee [section 4]. The Selection Committee inter alia includes the Leader of Opposition in the Lok Sabha. Since the 16th Lok Sabha does not have a Leader of Opposition, the Selection Committee cannot be constituted and consequently, it is not clear whether a procedural provision such as furnishing of annual return be implemented in the absence of the implementation of the ‘substantive’ provision regarding appointment of Lokpal.
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Conclusion The inclusion of trustees and other office bearers of public trusts within the ambit of the Lokpal Act is a very far reaching provision. It could subject such office bearers to intrusive scrutiny of their personal affairs and also brings to public domain the personal information where apparently such information may not have any direct nexus with corrupt practices in a trust. |
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This article was first published by the authors in Legatax’s Charities Taxation and Law Reporter (CTLR) |
