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

Vistara Engineering Ltd, incorporated in India, bribed no one itself, but its employee Mr. Iyer gave undue advantage to a public servant to retain a contract for the company. Vistara's counsel makes four claims. Which one is correct under Section 9?

The correct claim is that an employee is presumed, unless the contrary is proved, to have performed services on behalf of the company, so Vistara is exposed and must rely on the adequate procedures proviso. Prior conviction is not required, location is not limiting, and the offence is cognizable.

  1. AThe employee must first be convicted under Section 8 before Vistara can be proceeded against
  2. BVistara is liable only if the bribe is paid within India
  3. CIt is presumed, unless the contrary is proved, that Mr. Iyer performed services for or on behalf of Vistara, and the company may then rely on the adequate procedures provisoCorrect
  4. DVistara cannot be liable because the offence is non-cognizable

Explanation

Explanation 3 presumes an employee performs services on behalf of the organisation unless the contrary is proved. Section 9(2) applies whether or not the person has been prosecuted. An Indian-incorporated body is covered for business in or outside India, and the offence is cognizable under Section 9(4). The proviso remains Vistara's defence.

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