Lokpal and Lokayuktas Bill 2011 Introduced in Lok Sabha

Government today introduced in Lok Sabha the  Lokpal and Lokayuktas Bill, aimed at setting up the body of Lokpal at the Centre and  Lokayuktas at the level of the States.  Government also introduced a Bill for amending the Constitution for conferment of Constitutional status on both bodies.  Government also withdrew earlier Lokpal Bill, 2011 as it decided to introduce a new comprehensive Lokpal and Lokayuktas Bill, 2011 Bill after consideration of the suggestions made by the Parliamentary Committee which recommended significant changes in the scope and content of the earlier Bill. The salient features of the proposed new Bills are as under:-

 Focus on improving accountability

Establishment of new institution in the Constitution called  Lokpal for the Union and Lokayukta for the States.  These autonomous and independent bodies, shall have powers of superintendence and direction for holding a preliminary inquiry, causing an investigation to be made and prosecution of offences in respect of complaints under any law for the prevention of corruption.

 The Bill provides a uniform vigilance and anti corruption road map for the nation, both at Centre and States.  The Bill institutionalizes separation of investigation from prosecution and thereby removing conflict of interest as well as increasing the scope for professionalism and specialization.

Structure of the Institution:

 Lokpal will consist of a Chairperson and a maximum of eight Members of which fifty percent shall be judicial Members.  Fifty per cent of members of Lokpal shall be from amongst SC, ST, OBCs, Minorities and Women. There shall be an Inquiry Wing of the Lokpal for conducting the preliminary inquiry and an independent Prosecution Wing. Officers of the Lokpal to include the Secretary, Director of Prosecution, Director of Inquiry and other officers.

Process of selection:

The selection of Chairperson and Members of Lokpal shall be through a Selection Committee consisting of –

Prime Minister; Speaker of Lok Sabha; Leader of Opposition in the Lok Sabha; Chief Justice of India or a sitting Supreme Court Judge nominated by CJI; Eminent jurist to be nominated by the President of India  A Search Committee to assist Selection Committee in the process of selection.  Fifty per cent of members of Search Committee shall be from amongst SC, ST, OBCs, Minorities and Women.


Prime Minister to be brought under the purview of the Lokpal with  subject matter exclusions and specific process for handling complaints against the Prime Minister.  Lokpal can not hold any inquiry against the Prime Minister if allegations relate to:

  1. International relations;
  2. External and internal security of the country;
  3. Public Order;
  4. Atomic energy
  5. Space.

Any decision of Lokpal to initiate preliminary inquiry or investigation against the Prime Minister shall be taken only by the Full Bench with a majority of 3/4th.  Such proceedings shall be held in camera. Lokpal’s jurisdiction to include all categories of public servants including Group ‘A’, ‘B’, ‘C’ & ‘D’ officers and employees of Government.  On complaints referred to CVC by Lokpal, CVC will send its report of PE in respect of Group ‘A’ and ‘B’ officers back to Lokpal for further decision.  With respect to Group ‘C’ and ‘D’ employees, CVC will proceed further in exercise of its own powers under the CVC Act subject to reporting and review by Lokpal.

All entities receiving donations from foreign source in the context of the Foreign Contribution Regulation Act (FCRA) in excess of Rs. 10 lakhs per year are brought under the jurisdiction of Lokpal. Lokpal will not be able to initiate inquiry suo moto.

Other significant features of the Bill

No prior sanction shall be required for launching prosecution in cases enquired by Lokpal or initiated on the direction and with the approval of Lokpal. A high powered Committee chaired by the Prime Minister with leader of the opposition in the Lok Sabha and Chief Justice of India as members,  will recommend selection of the Director, CBI. Provisions for confiscation of property acquired by corrupt means, even while prosecution is pending.

Lokpal to be final appellate authority on all decisions by public  authorities relating to provision of public services and redressal of grievances containing findings of corruption. Lokpal to have power of superintendence and direction over any investigation agency including CBI for cases referred to them. The Bill lays down clear time lines for :

  1. Preliminary enquiry – three months extendable by three months.
  2. Investigation – six months extendable by six months.
  3. Trial – one year extendable by one year.

The Bill proposes to enhance punishment under Prevention of Corruption Act :

(a)     Maximum punishment from 7 years to 10 years
(b)     Minimum punishment from 6 months to 2 years

The Bill proposes to give legal backing to Asset Declaration by public servants. The Bill also seeks to make necessary consequential amendments in the Commissions of Inquiry Act, 1952, the Prevention of Corruption Act, 1988, the Code of Criminal Procedure, 1973, the Central Vigilance Commission Act, 2003, and the Delhi Special Police Establishment Act, 1946.

Constitutional (116th Amendment) Bill

Lokpal and Lokayuktas Bill, 2011



Lokpal and Constitution Amendment Bills

The Lokpal and Lokayuktas Bill, 2011 was introduced along with a Constitutional (116th Amendment) Bill during the winter session of the 15th Lok Sabha on December 22, 2011. Here are the full texts of the Bills along with the errata in PDF format.

Lokpal and Lokayuktas Bill, 2011

Constitutional (116th Amendment) Bill

Panel clears Bill to save kids from sex crimes

THE TRIBUNE / New Delhi, December 21

The landmark law on protection of children from sexual assault and pornography crossed the first big hurdle today as the Parliamentary committee reviewing its provisions cleared the Bill with one major rider. The committee rejected the government’s proposal to treat 16 years as the age of consent and not classify as an offence consensual sexual acts with children aged 16 to 18 years.

Though the Ministry of Child Development, piloting the law, argued for the age of consent saying sexual awareness of children couldn’t be overlooked, the committee said once the law had defined everyone up to 18 years as children, the element of consent should be treated as irrelevant. The ministry’s contention that not having the element of consent would lead to criminalisation of consensual action by 16 to 18-year olds didn’t go down well with the committee which said in its report to the Parliament today, “By having the element of consent, the focus will be on the victim, leading to his or her re-victimisation. Children can’t be exposed to lengthy cross examinations on issues of consent.”

The committee has further asked the government to cover religious institutions like muths, madrasas and monasteries under the law. It accordingly sought amendment to the clause – “Whoever being on the management or staff of an educational institution commits penetrative sexual assault on a child in that institution…would be punished” – to include religious institutions where young boys go to study. The law also covers households, hospitals, schools and juvenile homes.

The parliamentary panel has, however, sought the word “shared household” defined as “a household where the person charged with the offence lives or has at any stage lived in a domestic relationship with the child”. The existing definition is a bit limiting. This clause will protect children from family and is historic considering the 2007 government study which revealed that 53 per cent children had suffered sexual abuse and half of these were at the hands of persons in the position of trust.

The Protection of Children from Sexual Offences Bill 2011 (introduced in the Rajya Sabha on March 23 and referred to the committee) further allows children and anyone from the public to report the offence and its apprehension to the local police or special juvenile police unit. It covers sexual offences against children at the time of communal violence and provides for special courts to deliver justice in a child-friendly environment.

Its landmark features are – definition of sexual assault for the clarity of victims and law enforcers and the presumption that those who committed the offence are accused unless proved otherwise. Though the law has safeguards to prevent false complaints, it ensures that cases don’t fall through for want of evidence which is difficult to collect.

With this law, India seeks to fulfil its commitment to the UN Convention for Rights of the Child that it ratified in December 1992. The law is path-breaking considering 24 per cent rapes in India involve children (11 per cent of these involve those under 14 years). Government data further shows that conviction in rapes fell from 38.7 per cent in 2001 to 30 per cent in 2009; in matters where minors were procured for prostitution, conviction rate fell sharply from 39.1 per cent to 18.9 per cent over the same period.


Parliamentary Committee rejects government proposal to treat 16 years as the age of consent and not classify as an offence consensual sexual acts with children aged 16 to 18 years


Protection of Children from Sexual Offences Bill,2011

A second look at international arbitration


The Supreme Court needs to adopt a ‘pro-arbitration’ stance to provide fast, efficient and predictable remedies to foreign investors.

Global convergence and harmonisation in international commercial arbitration are particularly evident in the area of judicial control of a foreign arbitral award. In most countries, the possibility to bring before a court an action for annulment of an arbitral award rendered abroad is excluded. On the other hand, the Supreme Court of India has over the years adopted a very aggressive nationalistic posture in deciding international arbitration disputes, and is an outlier in this arena. In cases involving foreign arbitral disputes, the Supreme Court has consistently revealed an alarming propensity to exercise authority in a manner contrary to the expectations of the business community.

Observed in this light, the Chief Justice of India’s recent decision to constitute a constitutional bench to hear challenges to the Court’s earlier parochial rulings opens the most important chapter in the legal battle to convert the Indian judicial system into a pro-arbitration regime. The constitutional bench reference was made in the case of Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. A two-judge bench of the Supreme Court had earlier in this case expressed reservation on the correctness of the operating precedent laid down in Bhatia International v. Bulk Trading S.A. (Bhatia International), and subsequently followed in Venture Global Engineering v. Satyam Computer Services (Venture Global) and other cases. Thereafter, in accordance with judicial discipline and propriety, the two-judge bench referred the matter to a three-judge bench setting out the reasons why it could not agree with the three-judge bench operating judgment in Bhatia International. Later, the three-judge bench, which also included the Chief Justice, also came to the conclusion that the ruling in Bhatia International needs to be reconsidered by a five-judge bench. The matter will now be placed before the five-judge constitutional bench on January 10, 2012.

Underlying principle

It must be noted that the underlying principle behind the Indian Arbitration and Conciliation Act, 1996 (“1996 Act”) was to “minimise the supervisory role of the courts in the arbitral process.” However, Bhatia International, decided by the Supreme Court in 2002, laid the foundation for an excessively interventionist role of the judiciary in international arbitrations, thereby negating the intent of the 1996 Act. Part I of the 1996 Act lays down the law governing domestic arbitrations, whereas Part II, entitled ‘Enforcement of Foreign Awards,’ relates to enforcement of foreign awards in international commercial arbitrations under the New York Convention and the Geneva Convention. To make a distinction between the two, Section 2(2) of the 1996 Act provides that Part I “shall apply where the place of arbitration is in India.” However, in Bhatia International, the Supreme Court held that Indian courts had good jurisdiction even in the case of international arbitrations held outside of India. In reaching this decision, the Supreme Court construed the language in Section 2(2) and emphasised that the formulation omits the word “only” (as in “shall only apply”), so that the 1996 Act does not prohibit the application of Part I to an award made outside India. This decision is contrary to established notions of international arbitration law, which posit that municipal arbitration legislation should be restricted to arbitrations seated within the territory of such state.

The unfortunate potential consequence of Bhatia International, delivered in the context of the power of Indian courts to grant injunctions and other interim measures in foreign arbitrations, can hardly be exaggerated. In what came to be one of the most criticised decisions of the Supreme Court in recent times, the decision in Venture Global, paved the way for much increased judicial interference by Indian courts. In Venture Global, the Supreme Court relied on its reasoning in Bhatia International to hold that the “public policy” provision in Part I of the 1996 Act, applies also to foreign awards. In other words, the Supreme Court held that Indian courts would have jurisdiction to set aside an award rendered outside India, for violating Indian statutory provisions and being contrary to Indian public policy. These decisions have strangled the growth of arbitration into a successful alternative dispute resolution mechanism, and have been disastrous for foreign investors, and their Indian counterparts.

‘Risk premium’

Foreign direct investment flows towards locations with a strong governance infrastructure, which includes how well the legal system enforces contracts and protects property rights. A legal system’s protection of property rights and the enforcement of contracts lower transaction costs of trade and allow resources to be transferred to those who can use them in the most productive manner. Internationally, arbitration has evolved as the major means to minimise transaction costs of trade. However, the decisions of the Supreme Court of India have the exact opposite effect. Post Bhatia International and Venture Global, parties are more hesitant in dealing with India, and insist on terms in agreements that compensate for the legal risk. The ‘risk premium’ makes a plethora of transactions commercially unviable. Consequently, the Supreme Court decisions are disincentives to any long-term investment transaction and to entrepreneurial cooperation.

In April 2010, the Ministry of Law and Justice, with the intention of reinforcing the ‘minimum judicial intervention’ standard, had proposed an amendment to correct the error made and followed since the decision in Bhatia International. The proposed amendment to Section 2(2) of the 1996 Act seeks to insert the word “only” with a view to explicitly limit the operation of Part I of the Act to domestic arbitration, albeit, with a solitary exception in the context of interim measures and assistance in collection of evidence. Unfortunately, no progress has since been made towards introducing the arbitration amendments in Parliament.

Therefore, the only light at the end of the tunnel is the constitutional bench reference, which will come up for hearing on January 10, 2012. It is to be hoped that the Supreme Court will reverse these deleterious holdings and assure the business community of its commitment in protecting and promoting international commercial arbitration in India.

(Karan Singh Tyagi, a graduate of Harvard Law School, is an associate attorney with an international law firm in Paris.)