INDIA Law and Practice Contributed by: Priyank Ladoia, Asif Ahmed, Pranav Tomar and Puneet Dhanoa, AZB & Partners
that such a “vigil mechanism” envisaged under Section 177(9) is workable and effective, so that the sanctity of such “vigil mechanism” is not compromised. 6.2 Voluntary Disclosure Incentives The PCA is silent on creating any incentives for companies and individuals to engage in volun - tary self-disclosure of potential violations of anti- bribery and anti-corruption. Various protections are granted to whistle-blowers under numerous statutes (as stated in 6.4 Protections Afforded to Whistle-Blowers ) but do not incentivise this. 6.3 Self-Disclosure Procedures As stated in 6.2 Voluntary Disclosure Incen- tives , Indian law does not lay down relevant procedures for self-disclosure. 6.4 Protections Afforded to Whistle- Blowers In 2014, the Indian Parliament enacted the Whis - tle-Blowers Protection Act, 2014; however, the Act is yet to be put into operation. As stated in 6.1 Disclosure Obligations , Section 177(9) of the Companies Act 2013 casts a duty on listed companies to ensure that their “vigil mechanism” is framed in such a manner that it contains adequate safeguards and sufficient checks and balances for preventing victimisa - tion of employees who report illegal conduct and behaviour. In addition, corporate governance rules intro - duced by the Securities Exchange Board of India (SEBI) require listed companies to intro - duce a whistle-blower policy that is workable and effective, and which also provides adequate safeguards to whistle-blowers.
More recently, one notable change brought in by the legislature is Section 397 of Bharatiya Nagrik Suraksha Sanhita (BNSS), which provides for witness protection schemes to be notified by a state government. A whistle-blower can avail of such protection under the BNSS. Further, given the introduction of the electronic first informa - tion report (e-FIR) under the BNSS – which per - mits even a police office to register an FIR as the complainant – this can come to the aid of whistle-blowers in reporting bribery/corruption- related offences under the PCA. A complaint from a whistle-blower may now be in two forms: • a physical complaint resulting in an FIR; or • an e-FIR filed by a whistle-blower where, even without waiting for a physical complaint, an investigating officer (IO) finds the need for immediate action and registers an FIR without a physical complaint from the whistle-blower. At this point, withdrawal of prosecution under the BNSS can only happen with prior permission of the complainant, which might now include whistle-blowers. 6.5 Incentives Provided to Whistle- Blowers Indian law does not provide any incentive to whistle-blowers. However, it provides adequate mechanisms for presenting victimisation of whis - tle-blowers under the Companies Act, 2013. As stated previously, the Whistle-Blowers Protec - tion Act, 2014 has not been put into operation.
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