Why the Delhi HC set aside a CVC inquiry into allegations of bribery by Walmart

The Delhi High Court has set aside the inquiry initiated by the Central Vigilance Commission (CVC) into allegations of bribery of Indian officials by Walmart Inc, that surfaced in an article published in The Wall Street Journal..The article published in October 2015 mentioned that a probe initiated by the United States Department of Justice had found evidence of bribery in India by Walmart Inc. The evidence pointed to thousands of small payments made to low-level local officials to help move goods through customs or obtain real-estate permits..Walmart Stores Inc’s Indian arm, Walmart India, had moved the Delhi High Court against the CVC summons in 2016. The President and the Vice-President of the company were called upon to provide details of these alleged incidents of corruption..However, it was undisputed that the inquiry instituted by the CVC was not against Walmart India, but only in respect of misconduct on the part of certain unnamed public officials..Delivering the judgement, Justice Vibhu Bakhru quashed the summons on the ground that the CVC had no jurisdiction in terms of Section 8 of the CVC Act, 2003, to conduct an inquiry on the basis of a newspaper report..Stating that although the term ‘complaint’ has been construed differently in the context of various enactments, the Court held,.“The expression ‘complaint’ cannot, as commonly understood, extend to include a suo moto action based on information or knowledge gathered. A newspaper report is at best, a source of information; it is not a complaint made to the CVC.”.The Court observed that the expression ‘complaint’ would require a statement indicating a formal allegation to be lodged by a complainant..“A plain reading of the definitions of the word ‘complaint‘ enacted under various enactments indicates a common thread that runs through all the definitions; that is, in order to be construed as a complaint, it must mean an allegation made by a complainant.”, Justice Bakhru held..The Court also stated that there is no power conferred on the CVC to suo motu institute an inquiry and investigation without any complaint being lodged..A complaint in terms of Section 8(1)(d) of the CVC Act must be specific and directed against an official in terms of Section 8(2) of the CVC Act, the Court further held..The Court also observed that since the CVC Act has expressly charged the CVC to make inquiries in a complaint in terms of Section 8(1)(d) of the CVC Act, it cannot expand its jurisdiction to also conduct inquiries on information gathered from various sources by relying on its Vigilance Manual, 2005..Therefore, the Court concluded that the newspaper report could not be construed as a ‘complaint’ for the purposes of conducting the inquiry under Section 8(1)(d) of the CVC Act. Firstly, because it is not a complaint but an information, and secondly, it does not allege that any employee as specified under Section 8(2) of the CVC Act has committed an offence under the Prevention of Corruption Act, 1988..Justice Bakhru, however, rejected the petitioner’s argument that it was a fishing-and-roving-inquiry. He said,.“In these circumstances, the fact that the names of officials/agencies that had paid the bribe or the names of officials who had accepted the same is not disclosed, does not mean that the inquiry being conducted is a mere fishing-and-roving inquiry..Once it is established that there are good grounds to suspect that the bribes were paid, the fact that other details are not known would not render an investigation into the matter as a mere fishing-and-roving inquiry. Thus, the contention that the inquiry being conducted is arbitrary and unreasonable and falls foul of Article 14 of the Constitution of India is unmerited.”, he further noted..The Court, therefore, clarified that the CVC was not under any embargo to re-initiate an inquiry into the corruption allegations in case the Central government makes a reference on the basis of such information..Walmart India was represented through Senior Advocate Kapil Sibal, along with Advocates Siddharth Aggarwal, Anuj Berry, Mahak Bhatt, Nikhil Pillai, Adit Punj, Raghav and Reva Mann..CVC was represented through Advocate Tatini Basu..Read judgement:

Why the Delhi HC set aside a CVC inquiry into allegations of bribery by Walmart

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