Attachment, Confiscation, and the Rest of the Powers

Why the Income-tax Act's Schedule. Because attaching property requires machinery, and India already had a worked-out set of rules for attaching and selling property to recover tax. Rather than write a new code, Parliament borrowed one. This is a common drafting technique and worth naming in an answer as legislation by reference.

Section 29(2). Immediately after attachment the Lokpal or the authorised officer forwards a copy of the order, with the material in his possession, to the Special Court.

Section 30: confirmation by the Special Court

Section 30(1). Within thirty days of a provisional attachment the Lokpal shall direct its Prosecution Wing to file an application before the Special Court stating the facts and praying for confirmation of the attachment until the proceedings against the public servant conclude.

Section 30(2). The Special Court may, if of the opinion that the property was acquired through corrupt means, confirm the attachment until the proceedings conclude.

Section 30(3). If the public servant is subsequently acquitted, the property shall, subject to the court's orders, be restored to him together with the benefits that accrued during the attachment.

Section 30(4). If he is subsequently convicted, the proceeds relatable to the offence are dealt with accordingly.

The design in one sentence. The Lokpal may freeze for ninety days on its own; anything longer requires a court, and the court must form an opinion that the property came from corruption. That is the safeguard, and it is the reason the attachment power is defensible in a body that is not a court.

Section 31: confiscation

Section 31(1). Without prejudice to sections 29 and 30, where the Special Court, on prima facie evidence, has reason to believe or is satisfied that assets, proceeds, receipts and benefits have arisen or been procured by means of corruption by the public servant, it may authorise their confiscation till his acquittal.

Section 31(2). Where a confiscation order is modified or annulled by the High Court, or the public servant is acquitted by the Special Court, the property shall be returned; and where return is not possible for any reason, he shall be paid the price, including the money confiscated, with interest at five per cent per annum from the date of confiscation.

Two things to notice. The power is the court's, not the Lokpal's, which is a real distinction from section 29. And section 31(2) provides a compensation rule, which most Indian confiscation statutes do not, with a stated rate.

Section 32: transfer or suspension

Section 32(1). Where the Lokpal, while making a preliminary inquiry, is prima facie satisfied on the evidence available that:

1. (i) the continuance of the public servant in his post while the preliminary inquiry is being conducted is likely to affect the inquiry adversely; or
2. (ii) he is likely to destroy or tamper with evidence or influence witnesses,

it may recommend to the Central Government the transfer or suspension of that public servant for the period specified.

Note the persons covered: clause (d), (e) or (f) of section 14(1), that is Group A and B officers, Group C and D officials, and office bearers of bodies financed or controlled by the Centre. Not the Prime Minister, a Minister or a member of Parliament, who are clauses (a), (b) and (c). There is no power to recommend that a Minister be moved.

Section 32(2). The Central Government shall ordinarily accept the recommendation, except for reasons to be recorded in writing where it is not feasible for administrative reasons.

"Shall ordinarily accept, except for reasons recorded in writing" is a formula worth learning. It is not binding and it is not merely advisory. It creates a presumption in favour of compliance and requires a written justification for refusal, which is reviewable. The same formula recurs across Indian administrative law wherever a recommending body is meant to be taken seriously without displacing the executive's responsibility.

Section 33: preserving the record

The Lokpal may issue appropriate directions to a public servant entrusted with the preparation or custody of any document or record:

1. (a) to protect it from destruction or damage;
2. (b) to prevent the public servant from altering or secreting it;
3. (c) to prevent him from transferring or alienating any assets allegedly acquired through corrupt means.

A quiet but important power. Most corruption cases are lost on documents that disappear between the complaint and the inquiry. Section 33 lets the Lokpal act before it has any case at all, which is earlier than section 29 allows.

Section 34: delegation

The Lokpal may, by general or special order in writing and subject to specified conditions and limitations, direct that any administrative or financial power conferred on it may also be exercised by such of its Members, officers or employees as the order specifies.

Read the words carefully. Administrative or financial. Not the power to inquire, to grant sanction, to attach or to recommend transfer. Those are not delegable, and the omission is deliberate.

A worked example

The Lokpal is conducting a preliminary inquiry into a Group A officer.

Section 33. On the first day it directs the Ministry's record officer to protect the relevant files and forbids the officer from altering them. No prima facie case is needed for this.

Section 32. The officer is the head of the very division holding the files. The Lokpal is prima facie satisfied that his continuance is likely to affect the inquiry adversely and recommends his transfer. The Central Government must ordinarily accept, and must record reasons in writing if it does not.

Section 29. Material comes in showing that he holds a flat bought with the proceeds and that he has begun to sell it. All three conditions are met: proceeds of corruption, accused of an offence relating to corruption, and property likely to be dealt with so as to frustrate confiscation. The Lokpal records its reasons in writing and provisionally attaches the flat for ninety days, in the manner of the Second Schedule to the Income-tax Act 1961.

Section 29(2). A copy of the order and the material go at once to the Special Court.

Section 30(1). Within thirty days the Prosecution Wing applies to the Special Court for confirmation.

Section 30(2). The Special Court forms the opinion that the flat was acquired through corrupt means and confirms the attachment until the proceedings conclude.

Section 31. On prima facie evidence the Special Court authorises confiscation until acquittal.

And if he is acquitted. Section 30(3) restores the property with the benefits that accrued; section 31(2) requires return of confiscated assets, or payment of the price with interest at five per cent per annum from the date of confiscation.

Distinctions: attachment against confiscation

What beginners get wrong

That the Lokpal can confiscate. It cannot. It attaches for up to ninety days; confirmation and confiscation are the Special Court's.

That any one of the three conditions in section 29(1) will do. All three must be satisfied.

That the Lokpal can suspend an officer. It recommends; the Central Government acts, and must ordinarily accept.

That a Minister can be transferred out of the way. Section 32 covers only clauses (d), (e) and (f) of section 14(1).

That section 34 lets the Lokpal delegate its work. It permits delegation of administrative and financial powers only.

Quick revision

s.29: provisional attachment up to ninety days, on three cumulative conditions, reasons in writing, in the manner of the Second Schedule to the Income-tax Act 1961; copy and material to the Special Court at once.

s.30: application by the Prosecution Wing within thirty days; the Special Court confirms till the proceedings conclude; on acquittal the property is restored with benefits accrued.

s.31: confiscation by the Special Court on prima facie evidence, till acquittal; on annulment or acquittal, return, or the price with interest at five per cent per annum.

s.32: recommendation of transfer or suspension for section 14(1)(d), (e) and (f) public servants; the Central Government shall ordinarily accept, except for reasons recorded in writing.

s.33: directions to protect records and to prevent alteration, secreting or alienation.

s.34: delegation of administrative or financial powers only.

Test yourself

1. State the conditions for a provisional attachment under section 29 and the period it may run. The Lokpal or its authorised officer must have reason to believe, on the basis of material in his possession and for reasons recorded in writing, that a person is in possession of proceeds of corruption, that he is accused of an offence relating to corruption, and that the proceeds are likely to be concealed, transferred or dealt with so as to frustrate confiscation proceedings. All three must be satisfied. The attachment may be for a period not exceeding ninety days, in the manner provided in the Second Schedule to the Income-tax Act 1961.

2. Who confirms an attachment and who confiscates, and what happens on acquittal? The Special Court does both. On an application by the Prosecution Wing within thirty days it may confirm the attachment until the proceedings conclude if of the opinion that the property was acquired through corrupt means, and under section 31 it may authorise confiscation on prima facie evidence until acquittal. On acquittal the attached property is restored with the benefits that accrued, and confiscated property is returned or, where return is impossible, its price is paid together with the money confiscated and interest at five per cent per annum from the date of confiscation.

3. Explain the formula "shall ordinarily accept, except for reasons to be recorded in writing". It sits between a binding direction and mere advice. It creates a presumption that the recommendation will be acted on, and it requires the Government to justify a refusal in writing, which makes the refusal examinable and reviewable. In section 32(2) it applies to a recommendation for the transfer or suspension of a public servant during a preliminary inquiry, and the only permitted ground of refusal is that compliance is not feasible for administrative reasons.

4. Why does an ombudsman statute contain attachment and confiscation powers at all? Because the Act's preamble recites that India has ratified the United Nations Convention Against Corruption and that the law is enacted for its more effective implementation. The Convention requires States Parties to provide for the identification, tracing, freezing, seizure and confiscation of the proceeds of corruption, and Parliament placed those powers in the Lokpal rather than creating a separate body. It is also the clearest reason for calling the Lokpal a hybrid rather than a classical ombudsman.