The law that caught up with Jayalalithaa – Section 13(1)(e) of the Prevention of Corruption Act

In an eighteen-year-old case alleging disproportionate assets, a court in Bangalore today found Tamil Nadu Chief Minister J. Jayalalithaa guilty. The allegations go back to her term as Chief Minister between 1991 and 1996, during which she had, without being involved in any businesses and while receiving a monthly salary of Re. 1, allegedly collected assets worth Rs. 66 crore, including 2,000 acres of land, 30 kg of gold, and 12,000 sarees.


The conviction took place under Section 13(1)(e) of the Prevention of Corruption Act, 1988 which defines the offence of criminal misconduct by a public servant. One of the ways in which a public servant is deemed to conduct criminal misconduct is when that person cannot satisfactorily account for pecuniary resources or property disproportionate to his known sources of income. The explanation to the Section defines known sources of income as “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.

Once the prosecution establishes the disproportionate nature of the assets, the public servant will be presumed guilty of the offence under this provision. The onus then, of proving that he acquired the assets through legal means will rest with the public servant.

The punishment for criminal misconduct by a public servant is laid down in Section 13(2), which states “any public servant who commits criminal misconduct shall be punishable with imprisonment for a term which shall be not less than one year but which may extend to 7 years and shall also be liable to fine.” While arriving at a sentence, the court has to consider the amount or value of the pecuniary resource or property for which the accused is unable to account satisfactorily. One of the major changes brought about by this law over the repealed Prevention of Corruption Act, 1947 is that the courts are no longer allowed to impose a sentence less than the one prescribed.

Jayalalithaa will also have to step down as Chief Minister of Tamil Nadu following the Supreme Court’s judgment last year in the famous Lily Thomas Case which stated that any law-maker convicted with a sentence longer than two years should be immediately disqualified from office. The Cabinet had even tried to promulgate an ordinance to nullify the judgment after the Supreme Court rejected a petition by the Centre to review the case, but it was never passed.

Jayalalithaa’s close aide Sasikala Natarajan, her niece Ilavarasi and her disowned foster son Sudhakaran were also convicted in the case.

(Prapti Patel is a student of the Indian Law Society’s Law College in Pune.)

The article was edited for more clarity on the ordinance.


Qui Tam actions to recover the fruits of corruption – A primer

Vasujith_Ram.jpgLast week, Professor Nick Robinson wrote a well received op-ed in Mint, followed by a blog post on Law and Other Things, exploring Qui Tam enforcement as a possible solution to curb corruption in India. This post offers some more detail about the procedure.

Qui Tam is short for the Latin phrase, qui tam pro domino rege quam pro se ipso in hac parte sequitur, meaning “who pursues this action on our Lord the King’s behalf as well as his own”. A Qui Tam action allows a private citizen to sue on behalf of the government. Some part of the compensation or settlement money that is recovered if the suit is successful, is shared with the citizen while the majority goes back to the government. The idea is that a private citizen and the government work together to fight corruption and fraud.

English origins

Qui Tam is said to have been introduced in England in the fourteenth century to supplement an inefficient legal system. The early laws included many bounty provisions that rewarded citizens who successfully brought about civil and criminal actions on the King’s behalf. The procedure remained even after modernisation as it turned out to be valuable in bringing low-visibility cases or cases usually beyond detection before the courts. Though it stood for centuries, the English Parliament slowly strayed away from Qui Tam statutes in the nineteenth century and in the early twentieth till finally in 1951, with the passing of the Common Informers Act, 1951, all Qui Tam provisions were abolished.

False Claims Act

In the United States, Qui Tam action is usually taken under the False Claims Act (“FCA”), (31 USC §37293733). The FCA was passed during the U.S. Civil War to deter the corrupt actions of defence contractors. In 1943, during the Second World War, amendments weakened Qui Tam actions. They reduced the share of the private citizen and increased government powers to intervene. However in 1986, due to large scale fraud, especially in the defence sector, the FCA was again strengthened, to include greater penalties and a greater share of the recovery for citizens.

Staring a Qui Tam in the United StatesUnder the law, a private individual has the locus standi to sue on behalf of the government against corrupt officials defrauding the government. In return, the private citizen would get upto thirty percent of the damages received in addition to the legal and other expenses incurred. If the government doesn’t join in the suit, the individual is entitled to an amount between twenty-five and thirty percent, whereas if the government intervenes in the suit, the individual gets between fifteen and twenty-five percent. While the government is the plaintiff, the private individual bringing out the suit is known as a “relator”.

It is important to note that under the FCA, the false claim need not be made directly to the government. The cause of action will arise even if the false claim is made to other parties, provided it ultimately causes a loss to the government. The complaint is actually served on the government, which keeps it under seal for sixty days and investigates the matter before deciding whether to intervene or not. The government can ask for an extension, and it has usually done so. The identity of the complainant is kept secret for the period that it is under seal but may be revealed at later stages of the suit.

This carries several risks for the complainant. During those sixty days, the private individual and his lawyer have to maintain strict secrecy. The question of personal involvement in the false claim may come up. If the complainant participated in the fraud in some manner, filing a Qui Tam action will not give that person any protection against being implicated by the government.

Constitutional and ethical risks

A constitutional objection rests on the doctrine of separation of powers. According to Article II of the U.S. Constitution, public law enforcement is the executive’s duty. How can a private individual be empowered to represent the polity in public interest? In India, it is important to note, the courts have relaxed the requirement of locus standi to a large extent in cases of public interest.

There are also ethical objections. Whistleblowing is morally justified by good motives. In Qui Tam actions however, the incentive is primarily financial. Since the motives are less altruistic, the potential whistleblower may withhold the complaint or action until the fraud has reached levels where it will generate greater financial gains in a suit. It even leaves scope for harassment and frivolous claims with mala fide intentions, purely out of opportunism. Individuals may even directly go for Qui Tam action without first trying to verify or redress it with appropriate authorities, internal or external. This risk is compounded because there is no requirement of direct knowledge of the fraudulent act.

Recovering billions

Pfizer_GlaxoSmithkline_QuiTam.jpgEven with its manifold problems, the Qui Tam action has been successful in retrieving billions of dollars. In 2009, pharma giant Pfizer settled for 2.3 billion dollars in a Qui Tam lawsuit against it for allegations that included illegal kickbacks and marketing fraud. More recently, in 2012, another pharma giant GlaxoSmithKline settled for three billion dollars, the largest Qui Tam settlement in U.S. history, after a suit was brought about defrauding government funded healthcare programs.

(Vasujith Ram is a student of The WB National University of Juridical Sciences. He can be contacted at