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CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Business Ethics, Code of Conduct and Anti-Bribery

Nirmal Infra Pvt Ltd's associate, Mr Sethi, is alleged to have offered an undue advantage to a public servant for retaining business for Nirmal, but he has not yet been prosecuted. Nirmal's compliance head says the company cannot be proceeded against until Mr Sethi is prosecuted. Which is correct under Section 9?

The compliance head is wrong. The Act treats a person as having given the undue advantage if alleged to have committed the section 8 offence, whether or not that person has been prosecuted. Therefore the organisation's liability does not wait for the associate's prosecution or conviction.

  1. ACorrect, prosecution of the individual is a precondition
  2. BCorrect, but only for offences by agents
  3. CIncorrect, the company can be liable only after conviction of Mr Sethi
  4. DIncorrect, a person is treated as giving the advantage if alleged to have committed the offence under section 8, whether or not prosecutedCorrect

Explanation

Section 9(2) provides that a person is said to give or promise undue advantage if alleged to have committed the offence under section 8, whether or not prosecuted. So prosecution or conviction of the associate is not a precondition for proceeding against the organisation. The offence is also cognizable under 9(4).

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