Section 14 (1 )(f), (g) & (h) of the Lokpal & Lokayukta Act 2013 Are Unconstitutional!
Unreasonable
restriction on the rights of a person under Article 19(1)(c) of the
Constitution to form associations as well as under Article 19(1)(g) of the
Constitution of India.
restriction on the rights of a person under Article 19(1)(c) of the
Constitution to form associations as well as under Article 19(1)(g) of the
Constitution of India.
The Lokpal & Lokayukta Act, 2013 (LLA) is an Act intended to Regulate and Control
Corruption in ‘Public Institutions’.
Corruption in ‘Public Institutions’.
Unfortunately NGOs and charitable institutions which are voluntary organisations for public purposes and
public good have also been included within the purview of this Act.
public good have also been included within the purview of this Act.
The Act has deemed trustees and officers of charitable
institutions and NGOs as ‘Public Servants’ and requires them under this law to declare their assets to
the ‘competent authority’
institutions and NGOs as ‘Public Servants’ and requires them under this law to declare their assets to
the ‘competent authority’
Definition of ‘Public
Servants’ under the Act?
Servants’ under the Act?
Section 14(1) (f), (g) & (h) are of particular relevance for
most charitable institutions
most charitable institutions
Under Section
14(1)(f):
14(1)(f):
“Any person who is or has been a Chairperson or Member or Officer or
Employee in any Body or Board or Corporation or Authority or Company or Society
or Trust or Autonomous Body (by whatever name called) established by an Act of
Parliament or Wholly or Partly financed by the Central Government
or Controlled by it”.
Employee in any Body or Board or Corporation or Authority or Company or Society
or Trust or Autonomous Body (by whatever name called) established by an Act of
Parliament or Wholly or Partly financed by the Central Government
or Controlled by it”.
Several charitable institutions are ‘partly
financed’ by the Central Government and the term ‘partly financed’ is neither
defined nor explained where this particular sub-clause is concerned.
financed’ by the Central Government and the term ‘partly financed’ is neither
defined nor explained where this particular sub-clause is concerned.
Under Section
14(1)(g):
14(1)(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 Rs. 1 Crore”
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 Rs. 1 Crore”
This section clearly deems as ‘public
servant’ every trustee, manager, officer etc., of a charitable trust or society
which is wholly or partly financed by the Government and the annual
income of which exceeds Rs. 1 Crore.
servant’ every trustee, manager, officer etc., of a charitable trust or society
which is wholly or partly financed by the Government and the annual
income of which exceeds Rs. 1 Crore.
There is also a technical loop-hole. This
sub-clause does not refer to Section 8 (earlier Section 25) companies, although
some feel Section 8 companies would get covered under “by whatever name
called”, as also, the ‘Explanation’ u/s 14(1) does clarify that a ‘corporate’
entity would be covered under clause (f) and (g).
sub-clause does not refer to Section 8 (earlier Section 25) companies, although
some feel Section 8 companies would get covered under “by whatever name
called”, as also, the ‘Explanation’ u/s 14(1) does clarify that a ‘corporate’
entity would be covered under clause (f) and (g).
Under Section
14(1)(h):
14(1)(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 lakhs Rupees
in a year or such higher amount as the Central Government may, by notification,
specify.
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 lakhs Rupees
in a year or such higher amount as the Central Government may, by notification,
specify.
The Explanation
under Section 14(1) adds:
under Section 14(1) adds:
“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”
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”
The implications and consequences of the arbitrary
deeming fictions in the said Act are serious and unconstitutional and we are of
the view that the inclusion of the persons enumerated in Section 14(1 )(f), (g)
& (h) of the Lokpal & Lokayukta Act 2013 within the definition of “public servant” is
arbitrary, illegal, unconstitutional and void for the following reasons:
deeming fictions in the said Act are serious and unconstitutional and we are of
the view that the inclusion of the persons enumerated in Section 14(1 )(f), (g)
& (h) of the Lokpal & Lokayukta Act 2013 within the definition of “public servant” is
arbitrary, illegal, unconstitutional and void for the following reasons:
1)There is no cogent foundation
for treating private individuals as “public servant” simply because they happen
to work (often in a voluntary or fiduciary capacity) in a charitable organization
receiving more than one million Indian Rupees from a private foreign source.
This classification amounts to treating un-equals as equals since private
individuals and entities, such as persons enumerated in Section 14(1) (f) (g)
& (h) of the Lokpal & Lokayukta Act 2013, do not wield or exercise the same powers nor do they have the same duties,
responsibilities and obligations as functionaries of the State enumerated in the other clauses
of Section 14(1) of the Act.
for treating private individuals as “public servant” simply because they happen
to work (often in a voluntary or fiduciary capacity) in a charitable organization
receiving more than one million Indian Rupees from a private foreign source.
This classification amounts to treating un-equals as equals since private
individuals and entities, such as persons enumerated in Section 14(1) (f) (g)
& (h) of the Lokpal & Lokayukta Act 2013, do not wield or exercise the same powers nor do they have the same duties,
responsibilities and obligations as functionaries of the State enumerated in the other clauses
of Section 14(1) of the Act.
2) The term “corruption” has
not been defined under the Lokpal Act. In the broadest sense, corruption
includes the improper or selfish exercise of power and influence attached to
“Public Office”. The persons enumerated in Section 14(1) (f), (g) & (h) of
the Lokpal & Lokayukta Act 2013 do not occupy a “public office” nor are
they discharging any “official government duty”. The entities in these three clauses of Section 14(1) cannot be equated
with the State or the Government.
not been defined under the Lokpal Act. In the broadest sense, corruption
includes the improper or selfish exercise of power and influence attached to
“Public Office”. The persons enumerated in Section 14(1) (f), (g) & (h) of
the Lokpal & Lokayukta Act 2013 do not occupy a “public office” nor are
they discharging any “official government duty”. The entities in these three clauses of Section 14(1) cannot be equated
with the State or the Government.
3)
Adequate regulatory and
legislative measures already exist to safeguard against any misappropriation
and/or breach of trust that may be committed by private individuals who are
officers of the entities enumerated in Section 14(1)(f) (g) & (h) of the
Lokpal & Lokayukta Act 2013.
Adequate regulatory and
legislative measures already exist to safeguard against any misappropriation
and/or breach of trust that may be committed by private individuals who are
officers of the entities enumerated in Section 14(1)(f) (g) & (h) of the
Lokpal & Lokayukta Act 2013.
4)
The object and purpose of
the Lokpal and Lokayukta is to provide an independent and impartial institution
for expeditious means of redress in respect of matters, such as the dishonest exercise of discretion by
Ministers and other Government authorities arising out of bribery, for which remedies
are either not available or to which recourse is not reasonably accessible.
The object and purpose of
the Lokpal and Lokayukta is to provide an independent and impartial institution
for expeditious means of redress in respect of matters, such as the dishonest exercise of discretion by
Ministers and other Government authorities arising out of bribery, for which remedies
are either not available or to which recourse is not reasonably accessible.
5)
The Lokpal and Lokayukta are institutions that do not have any
Constitutional recognition. Besides Section 14(1) purports to regulate the functioning of
trusts, societies and associations which are entities within the exclusive
jurisdiction of the Sate under List II of the Seventh Schedule of the
Constitution. The provisions of Section
14(1) (f) (g) & (h) are beyond the legislative competence of the Union
Legislature.
The Lokpal and Lokayukta are institutions that do not have any
Constitutional recognition. Besides Section 14(1) purports to regulate the functioning of
trusts, societies and associations which are entities within the exclusive
jurisdiction of the Sate under List II of the Seventh Schedule of the
Constitution. The provisions of Section
14(1) (f) (g) & (h) are beyond the legislative competence of the Union
Legislature.
6)
Clause (h) of Section 14(1) is totally arbitrary and violates Article 14
of the Constitution of India. There is absolutely no “public duty” being
carried out by a trust or society that receives a donation of above one million
rupees under FCRA and there is no justification whatsoever to deem persons who
are officers in such associations to be deemed “public servant” for the purpose
of the Prevention of Corruption Act. The
FCRA and the Rules framed there under have sufficient safeguards and adequately
regulate not just the acceptance of foreign contributions but also the
utilization thereof.
Clause (h) of Section 14(1) is totally arbitrary and violates Article 14
of the Constitution of India. There is absolutely no “public duty” being
carried out by a trust or society that receives a donation of above one million
rupees under FCRA and there is no justification whatsoever to deem persons who
are officers in such associations to be deemed “public servant” for the purpose
of the Prevention of Corruption Act. The
FCRA and the Rules framed there under have sufficient safeguards and adequately
regulate not just the acceptance of foreign contributions but also the
utilization thereof.
7)
Unlike persons holding
Government office, persons who are officers in associations described in
section 14(1) (f) (g) & (h) may have legitimate independent sources of
professional or business income. These are not persons who have a fixed salary
such that any amount not disclosed by them can be deemed to be the product of
corruption.
Unlike persons holding
Government office, persons who are officers in associations described in
section 14(1) (f) (g) & (h) may have legitimate independent sources of
professional or business income. These are not persons who have a fixed salary
such that any amount not disclosed by them can be deemed to be the product of
corruption.
8)
The deeming provision
effectively suggests that non disclosure of an asset leads to an inference that
it is ill-gotten. While this may make sense in the context of what is per se a
public office, it is apposite to one that is only deemed to be a ‘public
office’.
The deeming provision
effectively suggests that non disclosure of an asset leads to an inference that
it is ill-gotten. While this may make sense in the context of what is per se a
public office, it is apposite to one that is only deemed to be a ‘public
office’.
9)
Placing onerous conditions
and exposing the persons enumerated in Section 14(1) (f) (g) & (h) of the
Lokpal & Lokayukta Act 2013 to liability and scrutiny under the provisions
of the Act has resulted in needless anxiety and resignations and going forward
it is going to get really difficult for charitable institutions to attract and
retain talent and good human resource both at Board and officer levels.
Placing onerous conditions
and exposing the persons enumerated in Section 14(1) (f) (g) & (h) of the
Lokpal & Lokayukta Act 2013 to liability and scrutiny under the provisions
of the Act has resulted in needless anxiety and resignations and going forward
it is going to get really difficult for charitable institutions to attract and
retain talent and good human resource both at Board and officer levels.
These provisions are acting as a dampener
and discouraging individuals from participating in or running charitable
institutions and from carrying out social activities. This amounts to
unreasonable restriction on the rights of a person under Article 19(1)(c) of
the Constitution to form associations as well as under Article 19(1)(g) of the
Constitution of India.
and discouraging individuals from participating in or running charitable
institutions and from carrying out social activities. This amounts to
unreasonable restriction on the rights of a person under Article 19(1)(c) of
the Constitution to form associations as well as under Article 19(1)(g) of the
Constitution of India.
Noshir H. Dadrawala