Section 10 PC Act: When Officers of a Commercial Organisation Face Personal Liability

Section 9 creates liability for a commercial organisation where an associated person gives or promises an undue advantage to obtain or retain business or a business advantage. Section 10 addresses the individuals behind that organisational offence.

Consent or connivance is essential

Where a Section 9 offence is committed with the consent or connivance of a director, manager, secretary or other officer, that individual is guilty and may be prosecuted. Designation alone is not enough. The complaint should plead and prove how the officer approved, encouraged, consciously permitted or participated in the bribery.

Consent and connivance

Consent ordinarily suggests agreement to the conduct. Connivance may involve knowing acquiescence or deliberate turning away from an obvious scheme. Mere negligence or failure of supervision is not automatically identical to either expression, although facts showing a designed compliance failure may support the inference.

Liability of the organisation remains central

Section 10 is linked to commission of the Section 9 offence by the commercial organisation. Investigators should establish the associated person, bribe, business purpose and organisational connection before moving to individual fault.

Evidence and defence

Board records, approval chains, payment descriptions, expense claims, agent contracts, internal warnings and control overrides may prove or rebut consent. A director should be able to demonstrate actual responsibilities, absence from the decision, dissent, compliance escalation and action taken upon learning of misconduct.

Corporate groups

An officer of a parent or affiliate is not liable merely because the entities belong to one group. The prosecution must connect that person to the organisation and offence within the statutory framework. Functional control may matter more than formal title, but it must be proved.

Section 10 rejects both extremes: seniority is not strict criminal liability, and corporate hierarchy is not immunity. Personal punishment follows proven consent or connivance in the organisation’s bribery offence.

Sources

Prevention of Corruption Act, 1988, Sections 9 and 10: https://indiacode.nic.in/bitstream/123456789/9317/1/corruptiona1988-49.pdf

Supreme Court of India, Sunil Bharti Mittal v. Central Bureau of Investigation, (2015) 4 SCC 609.

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