CS Professional · Environmental, Social and Governance (ESG) - Principles and Practice · Business Ethics, Code of Conduct and Anti-Bribery
The board of Nilgiri Power Ltd is reviewing its ethics framework after a sub-contractor's bribe to an official. A director says that because the company is liable only by way of fine under Section 9, the matter is minor, and that offences under Section 9 are non-cognizable so police cannot act without a magistrate's order. Which response is correct on the text of the Act?
The director is right that the company is punishable with fine, but wrong on cognizability. Section 9(4) makes offences under sections 7A, 8 and 9 cognizable notwithstanding the Code of Criminal Procedure, 1973, so the board should not treat the matter as minor.
- ABoth statements are right
- BThe fine point is right but offences under Section 9 are cognizable notwithstanding the Code of Criminal Procedure, 1973Correct
- COffences under Section 9 are cognizable and punishable with imprisonment of the company
- DSection 9 offences are cognizable only if the sub-contractor is convicted first
Explanation
Section 9(1) provides that the organisation shall be punishable with fine. Section 9(4) states that, notwithstanding the Code of Criminal Procedure, 1973, offences under sections 7A, 8 and 9 are cognizable. So the director is right about the fine but wrong about cognizability. A company cannot be given imprisonment under this section, and conviction of the other person is not a precondition.
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