We are a wholly-owned subsidiary of a US company and to some extent need to adhere to provisions of the US Foreign Corrupt Practices Act. Our shareholders are concerned about occasional demands for financial favours made by officials of certain government departments in India. What legal action can we take against such government officials?

Anti-corruption laws and regulations in India prescribe penal actions that can be initiated against public servants who demand gratification, monetary or otherwise, from any person either as (i) a motive or reward for doing or forbearing to do an official act, (ii) for showing or forbearing to show in exercise of their official functions, favour or disfavour to any person, or (iii) for rendering or attempting to render any service or disservice to any person. The term "public servant" includes almost all employees and officers of central and state government departments. A public servant who makes such a demand or receives any gratification from any person, other than his legal remuneration, is punishable with imprisonment of upto seven years and can be fined under the Prevention of Corruption Act, 1988 (Act), and can also be subjected to disciplinary action by his department, including termination/suspension.

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To initiate legal action under the Act against a public servant making an unlawful demand, you should lodge a First Information Report (fir) with the police station which has jurisdiction over the concerned government department specifically naming the employee making illegal demands on your company, together with details of the demand. The police will conduct an investigation pursuant to your fir, may arrest the public servant, and if the investigation discloses the commission of an offence under the Act, will file a charge sheet in the court. However, to take cognizance of an offence punishable under the Act, courts require the sanction of the central/state government. A public servant can also be suspended from office if he is arrested as per the service rules. Alternatively, to invoke departmental disciplinary action against the concerned public servant, you can complain to the Chief Vigilance Officer or head of his department or the Central/State Vigilance Commission depending whether the public servant is an employee of the central or the state government. On receipt of your complaint, these offices will conduct an inquiry and on being satisfied that such demands were made by the public servant, will advise the concerned department to take disciplinary action. These offices may also refer the matter to the CBI for further investigation and report. You may also file a complaint with the CBI which will conduct an investigation and file a charge sheet with the court for prosecution under the Act.

We export certain goods to India from Singapore. On a complaint filed against us to The Monopolies and Restrictive Trade Practices Commission (MRTPC) by an Indian competitor alleging predatory pricing, we apprehend an MRTPC investigation. Can the MRTPC prohibit our exports to India and can we challenge the legal validity of such investigation considering that an anti-dumping investigation has already been conducted against us which was decided in our favour?

The Supreme Court of India has recently held in the case of PT Muliaglass Vs. All India Float Glass Manufacturing Association that the MRTPC does not have extra-territorial jurisdiction to determine export prices to India or to prohibit an exporter from exporting to India even at a low predatory price. The MRTPC may however order post-import restrictions on your goods prohibiting their sale in India if such sales in any manner can be regarded as a restrictive trade practice in India. Anti-dumping provisions contained in the Customs Tariff Act and laws concerning restrictive trade practices contained in the Monopolies and Restrictive Trade Practices Act are different. Therefore, the previous anti-dumping investigation will not oust the powers of the MRTPC to conduct investigations pursuant to the complaint filed by your competitors.

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