Protecting the Whistle Blower

In one line

Every offence in Module III is committed inside an organisation, so somebody inside always knows, and the whole question is whether that person can afford to say so.

In the wording a student can write in an exam: the Whistle Blowers Protection Act 2014 provides a mechanism to receive complaints relating to disclosure of allegations of corruption or wilful misuse of power or discretion against a public servant, to inquire into them, and to provide safeguards against victimisation of the person making the disclosure; section 1(3) provides that it shall come into force on such date as the Central Government may by notification appoint.

Why the insider matters more than any institution

The chapter on why white collar crime is hard to prove listed eight difficulties. An insider defeats six of them at a stroke: he knows there is an offence, so the absence of a complainant disappears; he knows which of the lawful-looking transactions was not lawful; he can identify the document; he knows who decided; he is not deterred by the diffusion of responsibility because he knows where it lay; and he removes the need for the investigator to understand a business he has never worked in.

Every significant Indian exposure has had one. The audit that finds an entry, the officer who records an objection, the employee who keeps a copy. The chapter on technocrats identified the same thing from the other end: section 143(12) of the Companies Act works because it makes a professional's silence the offence.

And the cost falls entirely on him. He loses his employment, his promotion, his posting and often his safety, while the benefit is diffuse and public. That is a textbook collective action problem and it is why protection has to be statutory.

The Act

Section 3, public interest disclosure. Any public servant, any other person or any non-governmental organisation may make a public interest disclosure to the Competent Authority, alleging against a public servant an attempt to commit or the commission of an offence under the Prevention of Corruption Act 1988, wilful misuse of power or wilful misuse of discretion causing demonstrable loss to the Government or demonstrable wrongful gain to the public servant or to a third party, or the attempt to commit or the commission of a criminal offence. The disclosure must be made in good faith, in the prescribed form, and with the complainant's identity.

The identity provision. The Competent Authority must conceal the identity of the complainant and of any document produced, and not reveal it except to the head of the department where it considers it necessary, with reasons recorded in writing.

Section 4, inquiry. The Competent Authority ascertains from the complainant whether he made the disclosure, seeks a report or explanation from the head of the department, and may then conduct discreet inquiries or direct any agency to do so. It shall not entertain an anonymous complaint.