Professional Documents
Culture Documents
Dissertation Paper
Dissertation Paper
73 Pages 256.0KB
Mar 27, 2024 8:48 PM GMT+5:30 Mar 27, 2024 8:49 PM GMT+5:30
Summary
86
WHISTLEBLOWING LAWS IN INDIA: A COMPARATIVE
STUDY WITH THE LAWS OF THE UK AND THE US
113
SUBMITTED TO-
SVKM’s Narsee Monjee Institute of Management
81
Studies(NMIMS) in partial fulfilment of requirements for the
degree of
B.B.A.,L.L.B(Hons.)
By
DEEKSHA KANKANE
ROLL- A013, SAP ID- 81022019016
178
SVKM’s NMIMS, SCHOOL OF LAW
2024
9
Chapter 1: Introduction
CHAPTER-1
-
86
WHISTLEBLOWING LAWS IN INDIA: A COMPARATIVE
STUDY WITH THE LAWS OF THE UK AND THE US
1.1 ABSTRACT
Corruption is a negative phenomenon that causes deviation in formal duties because of private
gains. Corruption acts like a worm, if stayed in an organization will consume the ethical and
efficient practices of the company. Whistleblowing is an anti-corruption instrument. It is a
recognized tool to prevent and detect corruption and other malpractices. It refers to a person
that reports illegal, inappropriate, and unethical activities that are going on in the organization,
the person can be an insider or an outsider of an organization. The point that flashes in mind is
whether there are enough regulatory frameworks to protect whistleblowers. Unfortunately, the
answer to that is negative as there exists a regulatory lacuna that forbears whistleblowers from
approaching the authorities. This paper sheds light on the critical evaluation and analysis of the
inefficient conceptual and inefficiency of implementing the already incorporated law
framework which not only marks a dent in whistleblowers’ protection but also hampers the
150
practice of corporate governance. The most important facet of disclosing the truth is to protect
the ones that are blowing the whistle and make people accountable for their wrongful acts
eventually protecting the public interest.
17
To achieve a society where corrupt people are exposed without any danger caused to the
whistleblower it becomes essential on the part of the regulators to lay down a proper framework
17
so that the person is protected by showing his honesty and virtue to the public. The first part of
the paper describes the existing regulatory norms and issues subsisting within those norms
120
which jeopardize whistleblowers’ security and safety. The second part of the paper links Indian
legislation with foreign legislation and highlights the differences and shortcomings among each
legislation. The third part analysis the relationship between comprehensive whistleblowing
30
policy and improvement in the corporate governance standards of the company. The fourth part
critically evaluates whistleblowing policies incorporated by various companies and points out
various gaps that are present in those policies which would make it impossible for them to
achieve an ideal corporate governance standard. The fifth part concludes the issues at hand by
2|Pa ge
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
1.2 INTRODUCTION
The practice of whistleblowing has been historically recognized traces of the same can be found
in the Roman text as well in Greek Mythology. The origin of whistleblowing has its roots in
the United Kingdom where English Bobbies blew the whistle to raise an alert regarding illegal
8 8
activity or crime. The scope of whistleblowing is very broad and includes situations where the
general public, public authorities, or the judiciary is been informed about the arbitrariness,
illegality, or misconduct performed by a superior personality may it be State and its agencies,
or private employers.
17
Corruption is a common phenomenon among countries however, the degree of same differs.
Whistleblowing forms a critical part of the corporation and the country which keeps a check
128
on illegal work and makes disclosures on the same. The purpose of whistleblowing is to
disclose unethical behavior in the workplace that may hurt the organization or society at large
with the intent to boost integrity, transparency, and accountability in the organization.
India as a country has been traditionally backward in protecting the interest of whistleblowers.
74
Whistleblowers Protection Act, 2014 was the initial step taken by the legislature to safeguard
the rights and interests of whistleblowers after the recommendations by the Law Commission
and the constant pressure from the judiciary to enact a comprehensive statute concerning
whistleblowing. However, the 2014 legislation is far from being comprehensive and has its
122
lacunas and issues which need to be resolved in the future times to come by the legislature. The
2014 legislation on whistleblowing was not the last effort to be taken by the legislation to have
a framework for whistleblowing there was an Amendment Bill on whistleblowing passed in
2015 which is pending in the Rajya Sabha due to the non-implementation the bill lapsed. The
Amendment Bill was introduced to erase the errors that are present in the Whistleblowing Act,
2014. It was contended by the opposition leaders that proper procedures were not complied
with while passing the law in the Lok Sabha and the same needs to be reviewed by the Select
Committee. Due to dissent by the majority of the opposition leaders, the Bill was kept pending
and finally, it got lapsed with the dissolution of the lower house. India in comparison to other
1
countries like the United States, and the United Kingdom India is still at the nascent stage of
its efforts in having a complete statute. The United States has different legislations enacted at
different levels to protect and create a safe environment for employees that want to report any
3|Pa ge
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
mischievous activities taking place within the organization. In the United States practice of
whistleblowing is considered an antithesis to employment at will where the employee is
removed from employment due to the reporting of malpractices that are taking place within the
2
organization they can report the same in the public policy.1 Some of these acts are the IRS
Whistleblower Informant Award, The Occupational Safety and Health Act (OSHA), State
Whistleblower Law, Sarbanes Oxley Act (SOX), and Whistle Blower Protection Act. On the
2
other hand, the United Kingdom is the first European state to pass whistleblowing laws in wake
of various frauds that happened in the 1980s.2 Due to ever increase in corruption and fraud,
71
the United Kingdom passed its first legislation on whistleblowing the Public Interest Disclosure
Act, 1988. To date, it is considered a well-regulated statute. Other legislations that protect the
interest of whistleblowers include the Employment Act, 1996. The common benefit of having
168
complete legislation is the strengthening of the corporate governance framework.
Whistleblowers are of various types each of them has a unique role in disclosing the truth and
eliminating corruption from society.
18
1 Cummins v. E.G & Seallol Inc. (1988)690 F.2d. 134. Many major American companies have established formal
53
ombudsman systems. see Thomos M. Devine, the Whistleblower Protection Act of 1989: Foundation for the
Modern Law
50
of Employment Dissent’, 51 Administrative Law Review (1999).
2 Pratima Barde, Whistleblowing mechanism: Positive step towards enhancing corporate governance,
2
https://www.ijlmh.com/whistleblowing-mechanism-a-positive-step-towards-enhancing-corporate-
governance/, retrieved on 7th March 2023.
4|Pa ge
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
PROCEDURE OF WHISTLEBLO
The public
authority shall
Reporting the then
investigate
Collaborating mischievous and penalize
Identifying sufficient behavior to the those that are
the unethical evidence public responsible.
practices against those
authority.
conducted that are
within the committing
company the frudulenty
activitries
5|Pa ge
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
laws on whistleblowing and even in those countries the laws are ambiguous and uncertain. To
eliminate the ever-increasing menace of corruption the practice of whistleblowing needs to be
given a boost so that they are self-confident to blow the whistle without fear of their protection.
Many whistleblowers to extract the truth have been victimized, Mr. Satyendra Dubey and Mr.
Shanmughan Manjunath are examples where an act of public good costed their life. The paper
highlights the need and importance of having exhaustive and complete legislation so that the
whistleblower can live in a safe environment instead of a fearful one.
72
3
Bhavya Gupta and Parth Kumar, Protection of whistleblowers in India: A Need? Law Colloquy Journal of Legal
studies,https://lawcolloquy.com/journals/4v1c2.pdf, retrieved on 5th April, 2023.
6|Pa ge
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
whistleblowers had to bear the brunt of making the truth public with the intent to protect
the societal interest. The Law Commission has provided various recommendations to
improve the current regulatory framework on the safety of informers and whistleblowers
but all the efforts have gone in vain as no positive results have come out.
The research paper concludes by emphasizing that employee vigilance is increasing, and
whistleblowers’ complaints are on the rise, the law governing how to treat such complaints
and protect whistleblowers is murky and changing. As a result, having a strong
whistleblowing policy in place is critical.
5
2. Mrs. Trupti Rathi, Prof. Dr. Bindu Ronald, and Prof. Lindsay Trotman, A
woeful state of whistleblower protection in India. International Conference on
Research and Social Science & Humanities, (2019).4
In this research paper, the authors have critically analyzed the framework of whistleblowers
protection in India. A strong whistleblowing system enhances the practice of corporate
governance in the country. In India, there are frameworks incorporated to protect the
interest of whistleblowers namely the listing agreement 49, Companies Act, 2013, and the
Whistleblowers’ Protection Act, 2014. Though these regulations are in place it misses two
key elements
a) The regulations leave out the protection of whistleblowers in private companies.
b) The powers of the Central Vigilance Commission (CVC) are inadequate.
However, there is a failure of the administrative authorities to check whether the enacted
laws are implemented or not. This defeats the purpose of enacting the statute and de-
motivates the whistleblower to file a complaint against the unethical practices happening
within the organization.
Most of the complaints filed by the whistleblowers are concerning the misappropriation of
funds, misuse of official positions, and entering into related party transactions. Though
CVC is in place it fails to adopt satisfactory, transparent, and independent procedures and
the commission would keep on acting like a toothless dog. The Amendment Bill on
whistleblowers has been prepared, but that too has various ambiguities such as the law does
88
4
Mrs. Trupti Rathi, Prof. Dr. Bindu Ronald, and Prof. Lindsay Trotman, A woeful state of whistleblower
protection in India. International Conference on Research and Social Science & Humanities,
https://www.dpublication.com/abstract-of-icrsh/icrsh149/, retrieved on 5th April, 2023.
7|Pa ge
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
The research paper wraps up by highlighting the lack of an effective mechanism that has
resulted in annoyance, death, and physical and emotional harm to the whistleblowers in
India. Whistleblowing, the term is accepted globally to create a sense of transparency,
openness, and disclosure-friendly mechanism. Unfortunately, in India, there is inadequate
protection for whistleblowers.
103
5
Rajashree PR, Whistleblowing: Indian Paradigm and Blemishes, Social Science Research Network,
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2258296, retrieved on 5th April, 2023.
8|Pa ge
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
The paper concludes, by pointing out the inadequate structure of whistleblowers, our
country is too complex to be governed under the scope of the proposed Whistleblowers
Protection Amendment Bill 2015. It also runs short of the standards laid down in
international regulations.
4. Ajay Sharma, Law relating protection of whistleblowers’ in India a critical
study, Shodhganga Publications, (2019).6
In this research paper, the researcher has shared the impact of whistleblowing laws in the
state of Haryana. The researcher during the course of the research paper made various
observations. It was observed that it is not essential to know the law to become a
whistleblower. It was also observed that the companies that have a strong whistleblowing
policy were appreciated by the public and did not make the headlines for the wrong reasons.
The empirical study also indicated that the level of corruption is more in public companies
in comparison to private companies, however, one fact that cannot be ignored is, frauds are
also committed in private companies and that affects the general public too. Till today, no
legislature mandates private companies to have a whistleblowing policy in India.
Along with conducting empirical research the paper also points to various whistleblowers
that played a critical role in uprooting truth namely Shucheta Dalal in the Harshad Mehta
Case, Hari Prasad in Nirav Modi Punjab National Bank Case (PNB), and Satyendra Dubey
in, the, Indian Oil case. The paper also links a comparison between the developing Indian
regulations on whistleblowing with the comprehensive legislations of other countries. The
United Kingdom is updated regularly to meet the upcoming challenges that whistleblowers
face whereas, in India, it took almost a decade after the landmark judgment of the Supreme
Court in State vs Mantu Kumar and Ors7 to enact and pass the legislation on the protection
of whistleblowers. The United Kingdom relies on the Public Interest Disclosure Act, 1999
(PIDA), following are disclosures that are protected such as criminal offences, health, and
safety, damages to the environment, miscarriage of justice, and failure to comply with a
legal obligation. The disclosure is obligated to be made to the individual employer and the
employee are been provided compensation for disclosing the wrongful acts. The Act
provides whistleblowers protection from victimization employed in both private as well as
the public sector. The legislation has gone through several amendments to meet the
changing requirements.
61
6
Ajay Sharma, Law relating protection of whistleblowers’ in India a critical study, Shodhganga Publications,
https://shodhganga.inflibnet.ac.in/handle/10603/304459, retrieved on 4th April, 2023
7
SCC. No.14023/2010 08.01.2010, https://indiankanoon.org/doc/88260274/, retrieved on 8th April, 2023
9|Pa ge
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
The paper concludes by mentioning the importance of the judiciary and the role that it needs
to be played in the cases of whistleblowing and ensure that the persons who blow the
whistle or who believe their rights have been violated because they blew the whistle should
receive timely justice in the course of legal proceedings.
20
5. Dr. Singam Sunitha, A study on whistleblowing mechanism in Corporate
India, International Journal of Business and Management, (2020).8
In this paper, the writer has enumerated the regulations present in India on whistleblowing.
Clause 49 of the SEBI listing agreement that mandates the employee that wants to report
malpractices that are happening in the company can do the same to the audit committee.
This provision only mandated that public companies establish an audit in the interest of the
people working in the company assuming that private companies are immune from
fraudulent practices. A series of corporate failures have resulted in losses like the Enron
scam, Satyam scam, Kingfisher scam9, etc. These frauds have negatively impacted the
investors’ confidence. Whistleblowing has proved to be an effective practice to identify
malpractices at an initial stage.
Whistleblowing practice helps in making noise with an intent to alert others to misconduct
or misappropriation. Whistleblowing at times has been considered risky, to avoid the risk,
Whistleblowers Protection Act, 2011 was introduced it took three years to pass the bill in
the parliament. Even prolonging the regulation did not make sense as the legislation by no
means can be considered a comprehensive one. Therefore, there is a need to revamp the
laws in the interest of the whistleblowers in the true sense. Even after the enactment of the
statute implementation of the Act is a question therefore, there is a dire need to form an
enforcement body to ensure smooth implementation of the statute.
The paper concludes by emphasizing that the whistleblowing mechanism in corporate India
is prominent and the companies provide the best possible environment to check upon
unwarranted practices and ensure transparency in operations. There is a greater onus on
employers to ensure that the organizations provide a positive and friendly environment for
the whistleblowers to respond. It is proved that an organization has a friendly and
supportive environment which is welcoming change and the managers concerned with
14
8 Dr.Singam Sunitha, A study on whistleblowing mechanism in Corporate India, International Journal of
Business and Management, https://www.iosrjournals.org/iosr-jbm/papers/Conf.17037-2017/Volume-
8/4.%2023-30.pdf, retrieved
43
on 4th April, 2023.
9 Kingfisher Airlines vs Union of India, https://indiankanoon.org/doc/101269872/,2010 CPJ 686 retrieved on
10 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
90
coordination and cooperation with the employees seem to work towards providing a
conducive environment for whistleblowers.
6. Ruchica, Critical Issue: Protection of Whistle-blowers in India, International
Journal of Advanced Research and Social Science, (2013)10
Right to Information (RTI) and Whistleblowing are two sides of the same coin. Citizens’
access to information is a critical step to ensure accountancy and transparency in
government systems and companies. The Right to Information acts as a vital tool to expose
fraud and corruption which is the basic premise of whistleblowing. Just like
whistleblowers, RTI activists have also been victimized namely Datta Patil lost his life by
exposing the corruption of the deputy superintendent of police, Shashidhar Mishra was
murdered for exposing corruption concerning the election at Panchayat and Municipal
level, Ramdas Ghadegavka, mysterious death that had exposed political misappropriating
public funds.
The paper concludes by emphasizing disclosing wrongdoing that results in public harm, all
forms of whistleblowing protect the community, promote the public good, and extend the
rule of law. Hence their protection is of utmost importance and the whistleblowers and their
families must be protected.
18
10
Ruchica, Critical Issue: Protection of Whistle-blowers in India, International Journal of Advanced Research
and Social Science, https://garph.co.uk/IJARMSS/Sep2013/18.pdf, retrieved on 5th April, 2023.
11 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
The paper also includes the scandals that were exposed by the whistleblowers and the
relevant piece of their evidence which includes the press notes that were published. One
such example is against Mr. Vikram Kothari of RotoMac Group, Bank of Baroda acted as
a whistleblower.
“The CBI registered a case after receiving a complaint from Bank of Baroda against Kanpur-based
Rotomac Global Private Limited, its director Vikram Kothari, his wife Sadhana Kothari, and son
Rahul Kothari and unidentified bank officials”.
The paper also lays down the suggestion which needs to be considered
The legislature should lay down a clear definition of the terms victimization and
bullying
The new employee should be guided by the whistleblowing policy of the company
Post the framing of the legislation emphasis should be paid on the implementation of the
law or else the statute shall become unproductive and efforts to enact the law shall go in
vain. Further, it would not change the situation of the whistleblowers as poor
implementation instead of promoting the whistleblowers would discourage the
whistleblowers from reporting unethical practices.
6
11
Anupriya Dhule, Whistleblowing of Corporate Frauds in India, Chitkara Publications,
https://www.chitkara.edu.in/global-week/faculty-data/cbs/SHEFALI/Whistle-Blowing-Of-Corporate-Frauds-In-
India_07-03-2020-1.pdf, retrieved on 5th April, 2023.
12 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
The paper lists key aspects important to ensure the safety of the employee during the
process of whistleblowing
Confidentiality
Safe communication
No retaliation.
The researcher has also conducted an empirical survey where the researcher has told to
answer questions related to whistleblowing and corporate governance. The response to the
question that grabs eyeballs is “How likely are you to blow a whistle in case of
misconduct”. Out of the 76 respondents, 36% are unlikely to raise a whistle even if there
is misconduct that is happening. This explains the lack of trust among whistleblowers
present in the law.
117
12Rushil Deshpande, Whistleblowers’ Protection under Corporate Governance System, International Journal of
Law Management & Humanities, https://www.ijlmh.com/paper/whistle-blowers-protection-under-corporate-
governance-system/, retrieved on 5th April, 2023.
13 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
The paper concludes by highlighting rules and regulations that must be applied in order to
protect the welfare of whistleblowers, as well as encourage the culture of reporting in the
workplace. This is to ensure that an organization is always free of any fraudulent and illegal
act that could damage the organization and endanger society.
35
13
Monika Makhija and Sweta Kulshrestha, Quantitative Study on the impact of whistleblowers on the
performance of the organization, International Journal of Engineering Sciences & Research Technology,
http://www.ijesrt.com/issues%20pdf%20file/Archive-2018/February-208/74.pdf, retrieved on 5th April, 2023.
14 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
The paper also enlists various types of whistleblowers namely internal, external, open,
4
personal, impersonal, and corporate. Corruption is a social evil that prevents proper and
balanced social growth and economic development. One of the impediments felt in
eliminating corruption in the Government and the public sector undertakings are the lack
of adequate protection to the complainants, reporting the corruption or wilful misuse of
power or wilful misuse of discretion which causes demonstrable loss to the Government or
commission of a criminal offense. Whistleblowing plays a key role in extinguishing
corruption at the same time negatively impacts the personal life and the safety of
44
whistleblower and their family. On the other hand, there are positive implications of
whistleblowing such as enhancing corporate social responsibility, protecting the societal
183
interest, and building trust and confidence among the shareholders.
In a nutshell, the paper encourages the role of whistleblowers. Companies have to realize
their importance and provide employee-friendly culture, and the top management should
3
take initiative to promote efforts of whistleblowing the government needs to not only frame
but ensure the implementation of laws governing whistleblowing mechanisms and systems.
4
It has to be seen that the Act does not become a paper tiger like many other rules and
regulations and the same should be formulated and ensure that there is a proper
implementation of those regulations.
The research paper concludes by enlisting suggestions to improve the framework such as the
applicability of laws to the private sector, laws compelling rewards or compensation to the
whistleblowers, and laying penalties for revealing the identity of the whistleblower.
46
14
Shikha Patheja, System of Whistleblowing in India, International Journal of Scientific Research,
https://www.worldwidejournals.com/international-journal-of-scientific-research-(IJSR)/article/system-of-
whistle-blowing-in-india/NTkzNw==/?is=1&b1=345&k=87, retrieved on 5th April, 2023.
15 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
The literature mostly consists of studies that emphasize the point of inadequate statutory
regulation on the protection of a whistleblower instead of suggesting steps to encourage
whistleblowing activities in corporates. Limited literature is available concerning the loopholes
that exist in implementing whistleblower legislation. The role of whistleblowers in the world
174
of corporates and the level of protection provided to whistleblowers in the country and other
jurisdictions have not been examined in-depth in the research papers.
Restricted research is done on comparative analysis of Indian whistleblowing laws with foreign
legislations on whistleblowing even those that include the same, fail to trace the loopholes
present in the Indian regulation recommending solutions to overcome those ambiguities. There
are limited literature reviews on the need for private companies to have a mandatory
whistleblowing policy, and even those papers fail to highlight case studies where private
companies had committed fraudulent activity. There is a need to evaluate the whistleblowing
policies of corporates on an individual basis and identify their loopholes and recommend
solutions for the same.
India has witnessed a series of corporate failures namely the Kingfisher scam, the Sahara Scam,
and the Satyam Scam which has resulted in the loss of the investor’s confidence. India is a
developing country, for the country to achieve the target of 5 trillion by 2025-26 there is a dire
need for foreign capital. However, the prevalence of corruption strikes a misbalanced with
foreign investments. Corruption is the prime reason for the failure of the economy. Various
commissions have been formed to suggest measures to eradicate the practice of corruption but
all the efforts have gone in vain as the percentage of corruption has increased as the years have
passed by.
Whistleblowers are recognized by many as “crusaders of justice” vital disclosures are made
by the person within the organization or outside the organization that exposes fraud,
wrongdoings corruption taking place within the organization that has the potential to impact
43
society at large. Whistleblowers play a critical role in eliminating the practice of corruption.
The legislature enacted the Whistleblowing Protection Act which would act as a tool to curb
corruption, mismanagement, and malpractices happening within the organization. However,
the law failed to stop the practice of corruption. The law also fails to provide proper protection
to the whistleblowers as well as their families.
16 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
Thus, the problem of lack of regulators norms to protect the interest of the whistleblowers, it
cannot be denied that legislature has taken efforts to have exhaustive legislation due to poor
implementation of the law and lacuna present in the laws thus, legal protection is a must it is
only possible through the efforts of the legislature and the judiciary. The whistleblowing policy
in corporate India is essential as it would keep a check on unwarranted practices and ensure
transparency in the functioning. India in terms of whistleblowing laws is at a nascent stage as
163
compared to other countries. India must take inspiration from countries like the United
Kingdom or the United States.
42
1.5. RESEARCH QUESTIONS
What are the regulatory norms in India that describe the concept of whistleblowing?
22
How do Indian laws stand in front of the laws of the United States and the United Kingdom?
What correlation exists between corporate governance and whistleblowing?
What are the loopholes present in the whistleblowing policies of the specific company?
1.7. HYPOTHESIS
There have been various committees that have been set up to evaluate the relationship between
the two terms which include the Narayan Murthy Committee, Jamshed J Irani Committee, and
8
the SEBI Committee on corporate governance. Corporate Whistleblowing is considered the
best means to ensure good corporate governance.15 Whistleblowing is a positive avenue to
determine right or wrong there are various regulations that explain the relationship between the
61
15
Ajay Sharma, Law relating protection of whistleblowers’ in India a critical study, Shodhganga Publications,
https://shodhganga.inflibnet.ac.in/handle/10603/304459, retrieved on 4th April, 2023
17 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
two such as the Companies Act, 2013, Limited Liability Partnership Act, 2008, Corporate
Governance Voluntary Guidelines, and the Competition Act, 2002.
Thus, it can be concluded that the practice of whistleblowing and corporate governance goes
hand-in-hand.
B. Regulatory norms such as the Whistleblowing Act, 2014, the SEBI Listing arrangements,
and the Companies Act has proved to be inadequate in encouraging and protecting the
rights and safety of whistleblower.
C. India does not have complete legislation and needs to take inspiration from countries like
58
the United Kingdom and the United States at the time of reforming the law.
6
Countries like the United States and the United Kingdom have comprehensive legislation on
whistleblowing. India’s statute on whistleblowing is way backward as compared to the
developed countries. They have made provisions on the following points which include a
reward mechanism for the whistleblowers to appreciate their contribution, inclusion of
corporate whistleblowers in the purview, acceptance of anonymous complaints, and protection
of the interest of the family members of the whistleblower. One of the important aspects of
having effective whistleblowing protection law is to properly implement the law. Inspiration
should be taken from these countries to amend the law on whistleblowing.
31
1.8. RESEARCH METHODOLOGY
The researcher has relied on the doctrinal methods of research, the researcher has relied on
articles, blogs, research papers, and books. The research relied upon the non-doctrinal method,
according to the American Standards of Research, which includes such as interviews with
industry experts and case studies of reputed companies namely Schlumberger India and Tata
AIA Life.
18 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
1.9. CHAPTERIZATION
Chapter 1: Introduction
Chapter 2: Legislation enacted to protect and safeguard the interest and rights of the
whistleblower in India
The legislature has taken steps to have concrete legislation on whistleblowing in India. These
legislations have been passed with the intent to eliminate corruption from the system. The first
74
separate whistleblowing statute in India is the Whistleblowers Protection Act, 2014 the Act,
allows public officials to report wrongdoings that are happening within the public body.
Further, SEBI has enacted a SEBI listing arrangement that allows the whistleblower to have a
whistleblowing policy in all the listed entities. Several provisions allow the authorities to
investigate the wrongdoings happening within the organization on the receipt of the complaint
these authorities include the police authority, the registrar, and the Serious Fraud Investigation
Organization (SFIO).
51
Chapter 3: Comparing the Indian laws with the foreign laws of the United States and the United
Kingdom on the topic of whistleblowing.
Indian Statutes is at a developing stage, the framers should take inspiration from various foreign
2
jurisdictions such as the United States and the United Kingdom. Certain loopholes that the
Indian Statute needs to fill include a reward mechanism for the whistleblower, the inclusion of
corporate whistleblowers, protection should be extended to the family of the whistleblower and
there should be acceptance of anonymous complaints. It is essential that the administration
should take proactive steps to enforce the law throughout the country.
Corporate Governance and whistleblowing are two sides of the same coin. Whistleblowing
practices help in achieving essential corporate governance that includes transparency,
3
accountability, openness, and disclosure. Whistleblowing is an essential element in any
company’s corporate governance strategy as it empowers workers to act against misconduct
19 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
48
and helps maintain a safe environment in the company and secures the interest of the
whistleblower of the company. There exists a straightforward relationship between corporate
governance and whistleblowing.
Under the SEBI listing arrangement listed companies are mandated to have a whistleblowing
policy. However, many companies to eliminate unethical conduct from the company have
formulated a whistleblowing policy. This step of formulating a policy allows the employees to
know the procedure of reporting and approach the right authority. Whistleblowing policies of
various listed companies have been evaluated such as Deloitte, Reliance Jio Infocomm, and
Infosys, and unlisted companies such as Schlumberger Solutions Private Limited and Tata
AIA.
Chapter 6: Conclusion
26
In a democratic society, it is the responsibility of the citizen to come forward and report the
unethical practices that are happening within the company. Due to the lack of protection that is
provided in the regulations, many whistleblowers refrain from reporting due to the fear of
negative consequences. India should
6
take inspiration from countries like the United States, Canada, and the United Kingdom and
enact a complete statute along with enacting ensuring that proper measures are taken to
implement the law.
27
1.10. SCOPE AND LIMITATION OF THE STUDY
The research paper covers the regulatory regime present in India concerning whistleblowing
laws and highlighted the lacunas present in the statutes. The paper further, points to the
22
comparative analysis of Indian Laws on whistleblowing with the laws of the United States and
137
the United Kingdom. The paper explains the relationship between the two terms corporate
governance and whistleblowing. The paper highlights the whistleblowing policy of various
companies such as Deloitte, Schlumberger Solutions Private Limited, Tata AIA Life, etc
20 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 1: Introduction
of the implemented law. Research can be done on the whistleblower’s intentions such as
psychological factors, financial incentives, religious and cultural events, etc.
21 | P a g e
NMIMS School of Law, Navi Mumbai and 2024
Chapter 2: Regulatory protection concerning whistleblowers in India
CHAPTER-2
A Law Commission was set up to boost the disclosure of corruption and safeguard the interest
64
of the disclosing person. The Law Commission submitted the 179th report the Public Interest
Disclosures and Protection of Informers in the year 2001. The report of the bill was circulated
189
in the year 2003. During the period the country witnessed the infamous case of Mr. Sateyandra
40
Dubey, where a 32-year-old project director at the National Highway Authority of India
(NHAI) spotted a huge financial misuse in the Quadrilateral Highway Project, 2003. The
171
person acted like a whistleblower and wrote various anonymous letters to the Prime Minister’s
Office (PMO) with the intent to protect his identity. There was no response to the claims by
the PMO to Sateyandra Dubey. The result of all this was the unfaithful death on 27th November
2003. The issue concerning the death of the whistleblower finally reached the judiciary, and
the Supreme Court instructed the legislature to form a machinery to address the complaints of
the whistleblowers till the law is enacted.
Finally, in the year 2010 after witnessing widespread safety issues of various whistleblowers,
27
renamed the law from The Public Interest Disclosure and Protection of Persons Making the
Disclosures Bill, 2010 to The Whistle Blowers’ Protection Bill, 2011. The same was introduced
80
in the Lok Sabha in the year 2010. The report on the standing committee was out in the year
3 144
2011. The Bill was passed in the Lok Sabha 2011. After three years the Bill was finally passed
in the Rajya Sabha and received Presidential assent in the same year.
22 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 2: Regulatory protection concerning whistleblowers in India
124
2.1. WHISTLEBLOWER PROTECTION ACT, 201416
The primary intent behind the Act is to establish strong and effective legislation that would
redress the complaints of the whistleblower and ensure that whistleblowers are not victimized
and all fraudulent and unethical practices are reported. The preamble of the regulation has an
inquiry framework against the victimization of whistleblowers. The legislation addresses the
following situations
Compliant to
Inquiry by the Acceptance/Reje CA takes the
the public
Competant decision and
authority by ction of
Authhority acts
the Complaint
(CA) accordingly
whistleblower
91
16
Whistleblowers Protection Act, 2014, https://legislative.gov.in/sites/default/files/A2014-17.pdf, retrieved on
1st April, 2023.
23 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 2: Regulatory protection concerning whistleblowers in India
Chapter III, the chapter lays the outline of conducting the inquiry, and the procedure of filling
the complaint is highlighted above. Provided that the complaint shall not be investigated after
the expiry of 7 years.
134
Chapter IV, the chapter deals with the powers of the competent authority, it shall be equivalent
to the Civil Court having the power to issue a summons, receive evidence, issue commissions,
examination of witnesses, and discover and production of documents. The competent authority
175
can take assistance from police authorities or the Central Bureau of Investigation (CBI).
Chapter V, the chapter deals with providing protection to the whistleblower and protecting
26
them from victimization. It shall be the responsibility of the authority to keep the identity of
the whistleblower confidential. The competent authority is been given the right to pass interim
orders and ensure that police protection is provided to whistleblowers if needed.
Chapter VI, the chapter points out the penalties applicable for committing various breaches
under the statute. The chapter bars the civil court from taking matters of breach of the statute.
If the party is aggrieved by the decision of the competent court, then an appeal can be made to
the High Court.
Chapter VII, the chapter lays down the obligation of the competent authority for making annual
disclosures and debars filing of a suit against the whistleblower if the complaint is made in
good faith. The parliament has the power to make amendments to remove ambiguities clauses
or provisions and update the law.
The intent of the legislation is in the right direction it has various limitations which are as
follows
Fails to include private sector companies within the purview: Frauds are also prevalent
in private companies the same was witnessed by Sahara India Properties Private Ltd17
and Grow More Productions Private Limited18. If the failure of any private company
1
negatively affects stakeholders associated with the private company. The private sector
contributes a lot to the Indian economy and cannot afford any misconduct it will
negatively affect large groups of people. Thus, making it necessary to make induction
of whistleblowing in unlisted companies. If the whistleblowing policy is made
mandatory the employees would have the proper chain of communication so that they
17 https://economictimes.indiatimes.com/company/sahara-india-properties-private-
limited/company/U92413DL2022PTC400294#:~:text=Grow%20More%20Productions%20Private%20Limited
%20is%20an%20unlisted%20private%20company,and%20is%20located%20in%20%2C%20Delhi, retrieved on
18th March 2023.
24 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 2: Regulatory protection concerning whistleblowers in India
can approach the right person. In the year 2007, the Administrative reforms commission
suggested various reforms concerning whistleblowing laws they suggested that in the
private sector, as well whistleblowing policy should be included. However, the
recommendation was excluded.
5
Limited Scope of the Act: The law deals with complaints against public servants but
not against corporate scams, India has not been alien to the concept of corporate failure
Ketan Parekh Scam, the PNB Scam of Nirav Modi19, and the Sahara Scam20. Due to
the restricted scope, there is a decrease in the effectiveness of the law. In the last decade
from the year 2010-20, it has been a victim of various corporate failures which
expresses the need for concrete legislation for companies against the policy of
whistleblowing.
Does not cover anonymous complaints filed by the whistleblower : Unlike foreign
legislation, the Whistleblowing Blowing Act, 2014 does not include anonymous
complaints. The anonymous complaints shall not be addressed by the competent
authority. It is critical for a whistleblower to conceal their identity for the safety of the
whistleblower and their family. It is essential that anonymous complaints should be
addressed so that sufficient evidence is provided by the whistleblower.
Fails to include a reward mechanism for the whistleblower : The Whistleblower
Protection Act, 2014 does not include a reward mechanism for the whistleblower upon
the proving of claims. Due to the lack of a reward mechanism many whistleblowers are
3
demotivated to report malpractices of the company. As whistleblowers have to face
various negative consequences. Therefore, to appreciate the effort of the whistleblowers
they should be rewarded with monetary incentives.
4
The Act fails to include the definition of “victimization”: The term victimization is
20
key for the protection of the whistleblower. However, the Act fails to define the term
the non-inclusion of the definition highlights the unimportance given to the negative
consequences faced by the whistleblowers. It is critical to define so that not only
physical harm but also mental harm is covered in the Act.
19 Punjab National Bank vs NCT of Delhi and Ors, (2021) 16 SCC 299,
https://indiankanoon.org/doc/188402504/,
141
retrieved on 8th April, 2023
20 Sahara Real Estate vs Securities Exchange Board of India, 2012 (110) CLA 476 (SC), 2012,
25 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 2: Regulatory protection concerning whistleblowers in India
After receiving huge criticism for the Act of 2014, the legislature was forced to pass an
Amendment Bill, the next year to fill the gaps that are present in the legislation. The Bill instead
of eliminating the shortcoming weakens the efficiency of the Act. The Act itself is confronted
with many drawbacks or shortcomings, but instead of addressing those issues, the Bill has
182
further diluted its effectiveness of the Act. The features of the bill include
75
The provision safeguards, the disclosures that are prejudicially affecting the sovereignty
and integrity and relation with the foreign state.
The information that is expressly forbidden by the court or tribunal to be published if done
so would amount to contempt.
The details or a disclosure that can affect the Parliamentary and State Legislature privileges
under the Indian Constitution.22
Overall, this was a failed attempt on the part of the legislature to fill the lacunas present in the
Whistleblowers Protection Act, 2014, the Amendment Bill only covered non-public interest
disclosures. It failed to include important issues which still prevail in the law that are enlisted
above.
185
2.3. COMPANIES ACT, 201323
The Companies Act is legislation that is passed to ensure that the companies that are
functioning in the country should conduct their activities without any oppression and
mismanagement. The Companies Act includes various whistleblowing laws they are covered
as follows
23
Section 177(9) of the Companies Act, 2013: The provision mandates all the Public listed
companies to have a whistleblowing law in India.
The change from listed to every publicly listed company is brought post the amendment of
2017. As the vigil mechanism is made a part of the audit committee the committee shall
111
21 Whistleblowers Amendment Bill, 2015,
https://loksabhadocs.nic.in/Refinput/New_Reference_Notes/English/The_whistle_blowers_Bill.pdf, retrieved
on 1st April, 2023.
22 Articles 105 and 194 of the Indian Constitution, 1950.
101
23 Companies Act, 2013, https://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf, retrieved on 1st April,
2023.
26 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 2: Regulatory protection concerning whistleblowers in India
deal with the financial, accounting, and managerial valuation of the assets. The provision
lays down the frivolous complaints that shall be addressed and action can be taken against
those that make such complaints.
Section 210 of the Companies Act: The provision mentions the control that the government
has to order inquiries and investigations on the affairs of the company. It is however
179
essential that initiation should be provided to the government about the mismanagement of
the company.24
Section 206 of the Companies Act25: This provision provides power to the registrar to
inspect the books of the company and ensure that no mismanagement is going on in the
13
company proper information must be furnished by a person or group of persons to the
registrar before conducting the inquiry.
Section 212 of the Companies Act26: The provision states that the SFIO has the power to
inquire about the affairs of the company the investigation can be started after intimation
6
made by an individual or group of people of the company. The investigation by the SFIO
3
shall be initiated by the order of the Central/State Government, in case a special resolution
is passed by the company or the receipt by the registrar or the inspector.
Though this is a good initiative by the legislature to have an audit committee within the
organization so that the employee of the organization can easily report the malpractices that
are happening within the organization. There are no consequences mentioned if the audit
committee fails to perform the function. Further, private unlisted companies are not mandated
to have an audit committee. Private companies also witness various mismanagement issues.
32
Under Section 210 of the Companies Act, 2013, the government shall have the authority to
order an investigation on many occasions even after various requests sent by the whistleblowers
the government acts ignorant and does not conduct the investigation. Which have been
witnessed in Hari Prasad PNB Bank Scam, Mr. V, Saseendran Malabar Cement case, etc. Thus,
the legislature has enacted the law but there is an issue concerning the poor implementation of
the law by the administration.
38
Further, under Section 206 of the Companies Act, 2013 registrar has the authority to inspect
books, it has been witnessed that the registrar fails to implement this provision even after
63
24 Section 210 of the Companies Act
25 Section 206 of the Companies Act
26 Section 212 of the Companies Act
27 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 2: Regulatory protection concerning whistleblowers in India
various complaints are being filed. Thus, there has been a failure on the part of the registrar
when it comes to the implementation of the enlisted provision.
Under Section 212 of the Companies, SFIO has the power of investigation but it comes with a
lot of limitations as a suo moto investigation cannot be conducted by the SFIO they can only
act according to the orders of the government. The SFIO act as a tied wolf by the order of the
government. SFIO has inadequate manpower resources which is another restraint faced by the
investigating body.
116
2.4. CLAUSE 49: OF SEBI EQUITY LISTING AGREEMENT
108
The Security Exchange Board of India introduce the Act to protect the interest of the
shareholders and investors and ensure regularity in the security market. The SEBI Act also
includes a provision about whistleblowing and creates more transparency.
42
Clause 49(I)(B)(1)(e) of the SEBI Act27: It is a mandatory clause that should be complied
21
with by all publicly listed companies which states to establish a whistleblowing mechanism
that would enable the employees and its bodies to report any unethical practice happening
in the company.
Clause 49 (X) (A) of the SEBI Act28: A mandatory clause that states that there should be a
disclosure of whistleblowing policy and no individual should be denied the right to
approach the highest authority.
Clause 49 (III) (d) (18) of the SEBI Act29: The clause adds a burden on the audit committee
to check the implementation of the whistleblowing policy of the company.
Clause 49(II) (F) (3) of the SEBI Act:30 The clause makes it mandatory to disclose the
5
establishment of whistleblowing mechanisms on the company’s website and board report.
Clause 49(VIII) (X) (B) of the SEBI Act:31 The SEBI mandates that every publicly listed
company should be submitted every quarterly to the SEBI and it should be signed by the
CEO of the company.
15
It is a bold move by the legislature working in tandem with the Securities Exchange Board of
India (SEBI) to have a mandatory whistleblowing policy for listed entities. However, it
42
27 Clause 49(I)(B)(1)(e) of the SEBI Act
28 Clause 49 (X) (A) of the SEBI Act
29 Clause 49 (III) (d) (18) of the SEBI Act
30 Clause 49(II) (F) (3)
31 Clause 49(VIII) (X) (B)
28 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 2: Regulatory protection concerning whistleblowers in India
excludes public unlisted companies and other unlisted companies. These companies are not
alien to fraud and mismanagement. Thus, it enacting body should have thought of including
these companies and making sure that they also have incorporated a whistleblowing policy this
would in-store confidence among the employees and members working within the organization
to report unethical practices.
Unfortunately, the law in India is not that advanced as compared to the developed countries, it
is essential that government should introduce measures to improve the law. The same can be
done by
After, this inclusion the whistleblowers would be motivated to expose the unfair happening
within the company.32
32
Interview with the Senior Counsel of Schlumberger India.
29 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 2: Regulatory protection concerning whistleblowers in India
the complaint is taken by them to their ego. Therefore the accused can cause physical harm
to the whistleblower and their family so that the whistleblower is pressured to take back
the complaint.
False suits filed against the whistleblowers: The whistleblower is subject to legal action.
False suits of defamation are been filed against the whistleblowers. The company or the
alleged employee shall claim that the information reported is false and is done to deteriorate
19
the reputation and name of the company. Which acts as pressure to withdraw the complaint.
Termination of employment: Employees that act as whistleblowers are not generally liked
by the organization. The organization tends to terminate the contract either in the name of
non-performance or implicating false charges of a criminal offense against the employee.
In other situations, to remove the employee the company shall create a toxic work
environment forcing the employee to resign from the organization.
Negative impact on the personal reputation of the whistleblower: If the complaint is been
19
filed against a senior manager or a senior official of the company, due to the influence that
person has in the company attempts are made by the alleged accused to defame the image
of the whistleblower which impacts their personal as well as their professional life. Thus,
compelling the whistleblower to withdraw their complaint.
This explains that whistleblowers have to undergo various adverse consequences the major
reason why whistleblowers face these consequences is the lack of comprehensive legislation
enacted by the legislature and poor implementation of the laws. Whistleblower is one of the
most essential pieces in the puzzle that plays a critical role in identifying the fraudulent
activities that are happening within the company
Air Asia is a private limited company that was established in the year 2013. It was established
via Tata Sons acquiring an 83% stake and Air Investment Company having a stake of 17%. Air
Asia India is the 4th largest carrier in India having a share of 7.2%. Air Asia has its registered
office in Bangalore.
In the year 2020 pilot named Gaurav Taneja after his termination openly spoke about various
safety lapses committed by Air Asia in running their functions. Gaurav Taneja stated that pilots
30 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 2: Regulatory protection concerning whistleblowers in India
were forced to do flap 3 landing to save fuel. However, sometimes it is not safe to do a flap 3
landing and can affect the safety of the passengers. There was a guideline issued by the
company to make 98% OF flap 3 landing breaching the SOP issued by the Directorate General
of Civil Aviation (DGCA). The whistleblower (Mr. Gaurav Taneja) also accused the head of
operations Mr. Manish Upphal and the Head of safety Mr. Mukesh Nema both involved in this
irregularity. The impromptu investigation by DGCA against Air Asia found various
irregularities in their functions. Further, Mr. Manish Upphal and Mr. Mukesh Nema were
suspended. The whistleblower also states that during the period of employment, he had reported
various safety lapses in the company and the functioning of the company which he feels was
the major reason for the termination.
The company made various efforts to defame the image of the whistleblower and shut him
down by filing various false cases of defamation against him.
From the case study, it can be concluded that the whistleblower during the journey of disclosing
the truth has to face various negative consequences. Mr. Gaurav Taneja faced consequences
such as the impact on his reputation, loss of job due to termination of employment, defamation
case against Gaurav Taneja, and future employment issues. Due to the lack of adequate
mechanisms present in the statutory laws to provide protection to the corporate whistleblower
32
against retaliation of the company. The poor implementation of the laws and regulations is the
reason due to which Mr. Gaurav Taneja had to undergo these consequences.
Indian Oil Corporation is one of the most profitable Public Sector Undertakings (PSU). It is
97
the largest government oil producer in India. The Public Sector Undertaking is engaged in the
exploration, and production, of crude oil natural gas, and petrochemicals.
Mr. Shanmugam Manjunath an Indian Institute of Management (IIM) graduate and was
14
recruited by the Indian Oil Corporation as a sales officer. During the tenure of his employment,
73
he had sealed two petrol pumps station for selling adulterated oil at the petrol pump in the
Lakhimpur Kher area of Uttar Pradesh. The shutdown was ordered for a period of three months.
The aftermath of his action was that Mr. Shanmugam Manjunath has to face constant death
threats.33 After three months of suspension, Mr. Shanmugam Manjunath recommended the re-
opening of the petrol pumps on the condition that Mr. Monu Mittal who was the owner of the
54
33Mugdha Kapoor, India times, https://www.indiatimes.com/news/india/failingthehonest-this-ias-officer-who-
took-on-the-govt-now-considering-leaving-the-country-244592.html, retrieved on 1st April 2023.
31 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 2: Regulatory protection concerning whistleblowers in India
two petrol pumps that were sealed by Mr. Shanmugam Manjunath would not engage in
adulteration. However, Mr. Monu Mittal was again engaged in the adulteration of oil, thus Mr.
Shanmugam Manjunath requested his seniors to shut down the petrol pump. Due to the acts of
Mr. Shanmugam Manjunath, Mr. Monu Mittal got animated and became a troublemaker for
him.
Due to the animosity, Mr. Monu Mittal with the help of his aides murdered Mr. Shanmugam
29
Manjunath, the body was found in the backseat of his car and he was shot with six bullets. This
case study explains the miserable conditions of the whistleblower which take efforts to identify
the wrongs happening in society and report them the return that they get i s death threats,
153
murder, and constant pressure from the higher authorities. In the current case, the government
5
failed in its duty to provide adequate security to a public official.34 Due to the lack of adequate
laws to protect whistleblowers in India many whistleblowers just like Mr. Shanmugam
Manjunath, lose their lives on a day-to-day basis.
Death of Mr. V Saseendran for blowing the whistle against the company
162
Malabar Cement is a cement manufacturer in Kerala. The company was incorporated on April
135
1978 as a state public sector unit. The Public Sector Undertaking (PSU) is fully owned by the
Government of Kerala. Malabar Cement provides direct employment to nearly 850 people and
indirect employment to 1,000 persons. The company is the only grey cement manufacturer in
Karela.35
Mr. V Sasheendran, a Company Secretary working with the Malabar Cement Private Limited
in Kerala. Mr. V. Sasheendran acted as a whistleblower and pointed out the illegal transactions
of raw material happening within Malabar Cements Limited and the amount of corruption that
was alleged that came across Rs. 400 crores. He wrote about this corruption to the authorities
The allegation made by the whistleblower was the secretary of the managing director was
involved in the leak of confidential information. The audit reports were forged and loss was
hidden from the stakeholders of the company. Despite blowing the whistle regarding the
alleged malpractices that are happening within the company which can impact society, there
was no response from the authorities, and no protection was provided to the whistleblower and
his family.
34 Pawan Kumar vs State of UP, https://indiankanoon.org/doc/117898238/, SCC 2527 of 2015, retrieved on 8th
April, 2023
35 https://www.malabarcements.co.in/en/overview-3.retrieved on 1st April 2023.
32 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 2: Regulatory protection concerning whistleblowers in India
The outcome of which was the whistleblower had received serious threats from the company
and the employees working around him to withdraw the complaint. There was a toxic work
environment that was created around him. The whistleblower and his family received constant
threats. Later, Mr. V Saseendran and his two sons were found dead at his residence in Kerala.
This explains the poor implementation of the law that whistleblowers have to go through in the
current case, due to constant threats the and lack of protection that was provided by the
67
authorities to the whistleblower, Mr. V, Sasheendran has to take up his own life. Thus, to
protect the interest of the general public as the company is a PSU the whistleblower had to lose
his life.
These laws have been introduced with a positive intent to have complete legislation on
whistleblowing but the efforts have proved to be irrelevant as the laws have gaps and lacunas
which need to be resolved if the country wants to achieve the dream of having minimum fraud
and corporate failures. The lack of an efficient mechanism leads to annoyance and harassment,
death of the whistleblowers.
The attempts made by the legislature can be called “paper tiger”. There is a positive intent to
have a statute on whistleblowing but it all goes in vain due to the loopholes that are present in
the enacted statutes. Whistleblowers Protection (Amendment) Bill, 2015 was criticized by
many RTI activists and anti-corruption crusaders. To curtail corruption in society it is essential
that complete protection of whistleblowing regulations needs to be passed and implemented in
a well-organized manner.
33 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 3: Comparative Study on Whistleblowing protection legislation
______________________ _ _ _ _ _ _ _ _ _ _ _ _ __
CHAPTER-3
______________________ _ _ _ _ _ _ _ _ _ _ _ _ __
Provide machinery to report the wrongdoings and illegality occurring within the company
or public body.
Ensuring that whistleblowers are not victimized due to the blowing of the whistle.
1
3.1. WHISTLEBLOWING PROTECTION IN THE UNITED STATES OF
AMERICA
The United States has enacted numerous laws on whistleblowing to safeguard their interest.
Legislations have been passed concerning federal as well as in the interest of the private sector
workers. The United States is the first country to pass protection of whistleblowing laws. The
whistleblowing legislation in the United States is divided into two categories a) Sector and
Industry-specific legislation b) Comprehensive whistleblowing legislation
34 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 3: Comparative Study on Whistleblowing protection legislation
The legislature of specific states has taken active steps to pass regulations. These regulations
have been incorporated to provide confidence among whistleblowers so that they can report
illegal activity. These sector-specific regulations are divided into two parts
102
36
Civil Rights Act, 1964, https://www.ilo.org/dyn/travail/docs/1583/CIVIL%20RIGHTS%20ACT.pdf, retrieved
on 4th April,
100
2023.
37 Section 704(a), as amended, 42 U.S.C.A. section 2000e-3(a), (1972).
38 False Claims Act, 1986, https://aei.pitt.edu/1943/1/PB43.pdf, retrieved on 4th April, 2023.
99
39Consumer Protection and Safety Improvements Act, 2008, https://www.govinfo.gov/content/pkg/COMPS-
35 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 3: Comparative Study on Whistleblowing protection legislation
Sarbanes-Oxley Act, 2002 (SOX)40: Post the fraud witnessed by the world in Enron and
World-cum, there was a dire need of eliminating corruption from the system. Congress
passed the Sarbanes-Oxley Act with the intent to protect whistleblowers so they are not
hesitant to come out and report unethical deeds. The Act was enforced on the 30th July
75
2002. The main objective of the Act was to safeguard both the private as well as public
sector employees making disclosure of the federal offense. The Act, covered in its ambit
40 million employees. After the complaint is been filed the investigation shall be
conducted by the appropriate authority. Retaliation is considered a criminal offence
under the Act. There are various civil benefits that are provided to the whistleblower if
147
they have faced retaliation. The final decision shall be pronounced by the Secretary of
labor within 180 days of filing the complaint.
114
Dodd-Frank Wall Street Reform and Consumer Protection Act, 201041: It is a
whistleblower protection program that was enacted post the financial crisis of 2008.
The statute protects the employee that acts as a whistleblower in anti-retaliatory action.
The Act has defined whistleblowers as “any person who gives, or two or more persons
acting together who give information concerning breach of the securities laws to the
Commission, in a prescribed way”.42 The Act protects the whistleblower from
termination, suspension, threat, and reduction in rank. The complaint shall be initiated
by the whistleblower to the secretary of labor within the prescribed period of limitation.
70
The statute extends protection to the employees not only of the publicly traded
corporations but also Parent Corporations. The Act has proven to be very successful
since its enactment there are about 5,100 reports through the hotline and more than 57
million are awarded to 13 whistleblowers. The aggrieved party can appeal to the District
Court. The period of limitation for filling the complaint is 180 days after the violation.
85
40 Sarbanes Oxley Act, 2002,https://www.govinfo.gov/content/pkg/COMPS-1883/pdf/COMPS-1883.pdf,
retrieved
49
on 4th April, 2023.
41 Dodd-Frank Wall street reform consumer protection Act, 2010,
2023.
36 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 3: Comparative Study on Whistleblowing protection legislation
claims made by the whistleblowers should be in good faith. The disclosures should be made
on the following points, malpractice, abuse of power, health and safety, and misuse of the
law. Remedies are available to the employees against retaliation such as rehiring in case of
termination of employment, monetary compensation, and promotion for blowing the
whistle. Following are the forums through which the employee can get protection against
the retaliation
115
A. Merit System Protection Board
B. Office of Special Counsel
C. Merit System Protection Board
To overcome the defects that are present in the legislation an amendment was passed in the
year 2012 through the Whistleblower Protection Enhancement Act.44 The Act eliminates
certain shortcomings
not the first person who disclosed the alleged misconduct or in other words;
if the information is already known before the disclosure by that person;
made a revelation to a co-employee;
disclosed to a supervisor;
disclosed the consequence of the policy decision;
We’re not the first person to disclose the given misconduct.
However, the same was removed even after making such disclosure the Amendment Act, 2012
protects the whistleblower.
The United States has numerous pieces of legislation that safeguard the well-being of
whistleblowers and their families. Congress and the state governments have done a
commendable job in taking a gradual step in enacting statutes that are sector-specific and
151
industry-specific. The safeguards are provided to the employees of the private sector as well as
the public sector.
89
44
Whistleblower Protection Enhancement Act, 2012, https://www.congress.gov/112/bills/s743/BILLS-
112s743enr.pdf, retrieved on 3rd April, 2023
37 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 3: Comparative Study on Whistleblowing protection legislation
16
3.2. WHISTLEBLOWERS PROTECTION IN THE UNITED KINGDOM
The United Kingdom is the first country among the European countries to have whistleblowing
laws in the country. The United Kingdom decided to grant protection to whistleblowers on the
133
verge of various corporate failures. After the incorporation of the Public Interest Disclosure
Act, 1998 (PIDA) which is considered one of the most comprehensive legislation. The
legislation is updated from time to time to meet the changing needs.
76
3.2.1.PUBLIC INTEREST DISCLOSURE ACT, 1996
The Act came into operation on the 2nd July 1999. The Act was enacted post the
1
recommendation of the Nolan Committee Report, 1995. The introductory part of the Act
7
expresses the intent of the Act which is to provide protection to the whistleblowers enabling
them to pursue legal remedies against victimization or retaliation.45 The Act protects both
private as well as public employees
The legislation has defined worker as “workers that are working in public-private or
voluntary” Conditions for essential disclosures include
The Act provides protection for three forms of disclosures which include
Internal Disclosure: The Act provides protection that reports the wrongdoings that are
happening within the organization to the apex management. At the time of making the
3
claims adequate evidence needs to be furnished and the claims should be made in a good
faith.
Regulatory Disclosure: The disclosure is made by the whistleblower to the prescribed
7
authority as mentioned in the Act. The prescribed authorities include Financial Services
Authority, Health, and Safety Executives, or the Care Quality Commission. The claim
made by the whistleblower should be in a good faith.
Wider Disclosure: In this form of disclosure external whistleblowers are protected. The
whistleblower should disclose in a good faith and ensure that it is in the public interest.
68
45Public Interest Disclosure Act, 1998,
https://www.legislation.gov.uk/ukpga/1998/23/pdfs/ukpga_19980023_en.pdf, retrieved 4th April, 2023
38 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 3: Comparative Study on Whistleblowing protection legislation
50
The Act treats an attempt to silence the whistleblowers as void. The whistleblowers are
protected from any form of retaliation.
In the situation of retaliation, employees can approach the employment tribunal and the
limitation period is three months from the commission of retaliation may it be unjust
termination or an attack on the whistleblower or the family of the whistleblower. In
exceptional circumstances, the period of limitation can be breached. In a situation of
retaliation interim relief can also be availed by the employee in case of unfair termination.
191
Provision 48(2) lays the duty on the employer to prove the dismissal and deliberate failure
to take action.46 In cases of unfair termination, the employee can claim interim relief from
the employment tribunal.47 The Act also grants protection to the family of the
whistleblowers thus, whistleblowers can blow the whistle without any hesitation.
181
3.2.2 ENTERPRISE AND REGULATORY REFORM ACT, (ERRA) 201348
4
The Act was implemented and enforced in the year 2013. The main intent of the Act is to
provide confidence to whistleblowers so that they can report misconduct. The Amendment
Act has replaced the “good faith test” with the “public interest test”. The protection is
provided to the employee if they are making qualified disclosure.
Section 19 of the legislation protects the employee when they are making disclosures from
any kind of harassment, or intimidation from co-workers or the employer.
The Act49 was enforced in the year 1996 post the wake of various financial frauds. If
there is following protected disclosure made by the whistleblower then protection shall be
granted to the whistleblower as well as to the family of the whistleblower.
98
Commission of Criminal offence
Breaching of legal provision
Miscarriage of justice
The health and safety of the individual are hampered
29
46 Section 48(2) of the Public Interest Disclosure Act, 1998.
47 Section 9 of the Public Interest Disclosure Act, 2010
57
48 Enterprise and regulatory reform Act, 2013,
https://www.legislation.gov.uk/ukpga/2013/24/pdfs/ukpga_20130024_en.pdf,
92
retrieved on 4th April, 2023.
49 Employee Rights Act, 1999, https://www.ilo.org/dyn/natlex/docs/ELECTRONIC/94144/110398/F-
39 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 3: Comparative Study on Whistleblowing protection legislation
It is essential that the disclosure should be made to the prescribed person and in good
faith and ensure that sufficient pieces of evidence are presented to back the claims made
against the accused.
195
There prevails comprehensive legislation for the protection of whistleblowers in the United
Kingdom which not only safeguards the interest of the whistleblowers but also the family
76
members of the whistleblowers. The Public Interest Disclosure Act, 2010 does not limit the
protection to internal whistleblowers such as the employees and contractors of other members
associated with the company but also provides protection to external whistleblowers such as
media, police authorities, etc. Amendments have been passed to ensure that the law does not
7
get outdated. The enactment of PIDA has encouraged superior transparency and accountability
in the workplace by offering legislative protection for whistleblowers.
1
3.3. COMPARATIVE STUDY OF WHISTLEBLOWERS LAW OF INDIA
WITH THE LAWS OF THE UK AND THE USA
Points INDIA United States United Kingdom
Applicable Indian legislation has The United States has numerous Public Interest Disclosure
Legislations also enacted a few regulations concerning Act (PIDA) is a complete
pieces of legislation whistleblowers such as Sarbanes- statute in addition to that
Whistleblower Oxley Act, Dodd-Frank Wall they have an Employment
Protection Act, 2014, Street Reform Consumer Rights Act, 1996
the Companies Act, Protection Act, Consumer
2013, and Clause 49 of Protection and Safety Act, False
the SEBI listing Claims Act, Civil Rights Act,
106
arrangement. Civil Service Reform Act, and
the Whistleblower Protection
Act.
Purpose of The main intent of the In the United States legislation is The main intent of the
the Whistleblower’s enacted with the intent to abolish regulations is to safeguard
regulations Protection Act, 2014 is wrongdoings that are happening the interest of the
to report the abuse of within the company or whistleblower from
corruption happening government and protect victimization and ensuring
within the government whistleblowers from negative that stability between
initiate an inquiry and consequences.
40 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 3: Comparative Study on Whistleblowing protection legislation
50
Ajay Sharma, Law relating protection of whistleblowers’ in India a critical study, Shodhganga Publications,
(2019), https://shodhganga.inflibnet.ac.in/handle/10603/304459, retrieved on 4th April, 2023.
41 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 3: Comparative Study on Whistleblowing protection legislation
42 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 3: Comparative Study on Whistleblowing protection legislation
filing of an anonymous
complaint. The
investigation can only
proceed if there is a
disclosure of the
identity.
Provision for The legislation in India In the United States, The legislation in the
Reward does not reward whistleblowers are eligible to United Kingdom does not
whistleblowers for receive around 15-30% of the reward whistleblowers for
their contributions. wealth recovered by the their contributions.
government.
In comparison to the developed countries, India lacks in having complete legislation the ambit
of the implemented law is also narrow. There exist many similarities between the Indian laws
110
and the laws of the United States and the United Kingdom such as having similar objectives,
41
protection of the identity of the whistleblower, and the intimation of the result of the
investigation to the whistleblower. Along with similarities there exist various points of
difference such as a provision to reward the whistleblower, anonymous complaints by the
121
whistleblower, the burden of proof in case of victimization, the ambit of the employees
196
covered, and the types of disclosures. Indian legislation needs to fill the gaps that are present
for it to become the best legislation in the world. Along with executing a strong whistleblowing
law, it should not only be on paper, the administrative body should ensure that there is proper
implementation of the law.
43 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
24
Chapter 4: Relationship between corporate governance and whistleblowing
______________________ _ _ _ _ _ _ _ _ _ _ _ _ __
165
CHAPTER-4
__________ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
India was lagging due to a poor corporate governance system. It was due to poor governance
practices that caused various corporate failures in India. The change was witnessed due to the
coming of liberalization in the year 1991 which strengthen the governance practice. SEBI
2
51 Organization for Economic Cooperation and Development, OECD Principles of Corporate Governance 11
(2004), http://www.oecd.org/dataoecd/32/18/31557724.pdf, retrieved on 29th March 2023.
136
52 Prithiv Sahu, History of Corporate Governanace in India. https://lexpeeps.in/history-of-corporate-
44 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 4: Relationship between corporate governance and whistleblowing
which was earlier only engaged in stock trading started to frame rules and regulations regarding
corporate governance.
Whistleblowers are considered keepers of corporate conscience, conscience refers to the ability
to differentiate between right and wrong. Whistleblowers in the organization act as “keeper”
and ensures that inappropriate and unethical practices are eliminated.53 The mechanism that is
51
essential for protecting the essence of corporate governance includes
2
53
Ajay Sharma, Whistleblowing as a tool for good corporate governance- An Indian Perspective,
56
https://rjhssonline.com/HTMLPaper.aspx?Journal=Research%20Journal%20of%20Humanities%20and%20Soci
al%20Sciences;PID=2018-9-3-33,
3
retrieved on 1st April, 2023.
54 Section 177(1) of the Companies Act, 2013.
45 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
24
Chapter 4: Relationship between corporate governance and whistleblowing
Over the years to enhance the concept of corporate governance various committees have been
154
formed, whistleblowing is an integral tool of corporate governance, as the concept of
whistleblowing ensures that the companies adopt and monitor the operation of the business
successfully achieving the objectives. Many committees have stressed the concept of
whistleblowing.
Despite clear and effective guidelines laid down by the Narayan Murthy Committee, there was
pressure inserted by the corporates to not comply with these policies, thus, SEBI was forced to
make suggestions, non-mandatory in nature. The government should not have bowed down to
164
the pressure of the corporates instead should have implemented the suggestions that were put
forward by the Narayan Murthy Committee as it would have boosted the ethical practices of
the corporates. The action of non-implementing ideal practices of improving the standards of
whistleblowing has caused various misconducts within corporates which in turn can impact the
interest of society at large.
10
55 The Report by Shri Narayan Murthy Committee on Corporate Governance,
https://www.sebi.gov.in/reports/reports/mar-2003/the-report-of-shri-n-r-narayana-murthy-committee-on-
corporate-governance-for-public-comments-_12986.html, retrieved on 29th March 2023.
56 Clause 49 of SEBI Listing Agreement.
46 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 4: Relationship between corporate governance and whistleblowing
The committee from one of the many issues that it dealt which recommended protecting the
whistleblower that exposes the fraud. Such protection should be provided to the whistleblower
in case of harassment. The committee also stressed recognizing the concept of the
whistleblower as that there was not a single regulation that could provide protection to the
whistleblower. In situations where the employee gives evidence and he has taken part in the
commission of the offence, the organization should take measures to mitigate the penalty
against the informing employee.
30
57 J.J.
Irani Report of the expert committee, retrieved on 29 th March 2023.
52
https://ibbi.gov.in/uploads/resources/May%202005,%20J.%20J.%20Irani%20Report%20of%20the%20Expert%
20Committee%20on%20Company%20Law.pdf,
10
retrieved on 29th March 2023.
58 Report on the committee on corporate governance, https://www.sebi.gov.in/reports/reports/oct-
47 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
24
Chapter 4: Relationship between corporate governance and whistleblowing
1
connected person that comes out to disclose a violation with the quantum of penalties that are
waived when lenient treatment is meted out and the protection of whistleblowers. Currently,
11
this power is only with the Competition Commission of India to provide clemency to the cartel
1
members. The committee authorized SEBI to grant leniency in the term. In a nutshell, availing
of the leniency provisions is a win-win situation for SEBI as well as the whistleblower.
69
4.2. FOREIGN COMMITTEES EXAMINING THE RELATIONSHIP
BETWEEN CORPORATE GOVERNANCE AND WHISTLEBLOWING
107
Cadbury Committee Review on the financial aspect of Corporate Governance59
The committee was established in May 1991, the major reason why the committee was set up
was due to, the loss of confidence of the investors, lack of accountability by the board members,
and financial collapses of various corporations. The committee was chaired by Adrain
198
Cadbury. Mr. Adrian Cadbury has defined corporate governance as “It is a system by which
the companies are directed or controlled”60.
The committee has suggested strengthening the governance of the organization it needs to
empower the employees so that they can act as a whistleblower through which all unethical
practices happening within the company are been passed on to the top management of the
company.
19
Whistleblowers ensure that there is a prevalence of strong corporate governance practices
16
within the company which positively reflects on the performance of the company.
Whistleblowers play a pivotal role in disclosures of governance errors that are committed by
the company which allows the organization to rework the governance strategy and ensure that
those misconducts are eliminated.
The Cadbury committee was supposed to draw the importance between the two concepts so
that efficiency and targets of the organization are met.
12
59Cadbury Committee Review on the financial aspect of corporate governance,
https://www.frc.org.uk/getattachment/9c19ea6f-bcc7-434c-b481-f2e29c1c271a/The-Financial-Aspects-of-
Corporate-Governance-(the-Cadbury-Code).pdf,
145
retrieved on 29th March 2023.
60 Corporate Governance, https://blog.forumias.com/corporate-governance-in-india-explained-
pointwise/#:~:text=to%20know%20more-
,What%20is%20the%20meaning%20of%20Corporate%20Governance%3F,which%20a%20firm%20is%20gove
rned., retrieved on 1st April, 2023.
48 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 4: Relationship between corporate governance and whistleblowing
The committee has emphasized the contribution of the employees as they are the ones that are
30
involved in the day-to-day affairs of the company. Thus, for any company to enhance its
governance standards it should focus on a whistleblowing policy.
177
4.3 REGULATIONS THAT RECOGNIZE THE RELATIONSHIP
BETWEEN CORPORATE GOVERNANCE AND WHISTLEBLOWING
The laws have been passed in India that correlates the two terms “corporate governance” and
“whistleblowing”. The legislature has not enacted a specific statute that entirely highlights the
connection between the two terms. However, few statutes entail provisions highlighting the
reference between the two.
The Ministry had taken significant steps after evaluating and examining numerous committee
reports to strengthen the framework of corporate governance. The government finally
introduced guidelines such as Corporate Governance Guidelines, 2009.
The guidelines have laid down procedures and rules through which best practices can be
139
imbibed. Chapter VI of the Corporate Governance Guidelines deals with the mechanism of
whistleblowing. The guidelines mandate the organization to have an environment where
whistleblowers are not afraid of disclosing information relating to corruption or fraud. The
49 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
24
Chapter 4: Relationship between corporate governance and whistleblowing
148
employees should not be penalized for the act of blowing the whistle that is in the interest of
the stakeholders.
The guidelines also cover having an independent director in the organization who should have
161
a fixed salary. It is necessary to define the role of the audit committee ensuring that
transparency and openness are kept with the stakeholders. Post the establishment of the audit
committee the company must conduct a secretarial audit on regular basis and ensure that the
whistleblowing system is revamped from time to time.
The Act was enacted with the intent to ensure that there exists separate liability between the
individual and the partners. The Act also deals with the aspect of whistleblowing. While
forming the Act, the legislature has considered the suggestion put forward by Dr. Jamshed J.
Irani Committee, the provision 31 of the LLP Act, 2008 relinquishes the liability of partners,
and employees if they disclose any vital information concerning the fraud. The protection under
the statute can be provided if two essentials are met
1. The partner or the employee has provided vital information during the investigation being
conducted against the limited liability partnership.
2. Information given to the partner or the employee leads to the conviction of any other partner
or the employee involved in the fraud64.
The partner or the employee shall act as a whistleblower which would disclose vital
information which can help the authorities. This is beneficial for both the authority as well as
the whistleblower.
The provision also protects the whistleblower may it be an employee or the partner from any
166
kind of discrimination, threats of suspension, or a discharge that benefits the whistleblowers to
come forward and disclose essential information concerning the commission of the unethical
activity.
55
63 Limited Liability Partnership Act, 2008,
https://legislative.gov.in/sites/default/files/The%20Limited%20Liability%20Partnership%20Act,%202008.pdf ,
retrieved
172 on 1st April, 2023.
64 Section 31 of Limited Liability Partnership Act, 2008.
83
65 Competition Act, 2002, https://www.cci.gov.in/images/legalframeworkact/en/the-competition-act-
50 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 4: Relationship between corporate governance and whistleblowing
The Act was enacted with the intent to ensure that monopoly is restricted and fairness in
60
competition is kept. The purpose of the legislation is to ensure that consumers and producers
are prohibiting unethical practices designed to garner greater market space that could be
realized through honest competition.
The regulation emphasized that the confidentiality of the discloser or the whistleblower should
be protected. The disclosure of the identity can be made only after obtaining the consent of the
whistleblower.
Due to the protection of confidentiality, there is less exposure to the risk of life to the
whistleblower. The provision of leniency is added in the statute which is key for breaking the
cartel activity. It also benefits the Competition Commission of India to investigate the situation
and arrive at a solution in faster way.
87
66 Section 46 of the Competition Act, 2002.
67 Competition Commission of India Lesser Penalty Regulation, 2009
93
https://www.cci.gov.in/images/legalframeworkregulation/en/cci-lesser-penalty-regulations-
20091652175951.pdf,
33
retrieved on 1st April, 2023.
68 Skilling vs United States ( No. 08-1394 ) 2010, https://sherloc.unodc.org/cld/case-law-
51 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
187
Chapter 4: Relationship between corporate governance and whistleblowing
192
The organization must comply with the standards of governance which would improve the
image of the company in society. It is spotted by the UK Corporate Whistleblowing
Commission, 201371, which highlighted whistleblowing in support of good governance.
“Effective whistleblowing arrangements are a key part of good governance. A healthy and open
culture is one where people are encouraged to speak out, confident that they can do so without
adverse repercussions, confident that they will be listened to, and confident that appropriate
action will be taken. The company should provide appropriate development programs and
training to create a better and healthy corporate culture or corporate environment and should
also strengthen whistleblowers by making effective whistleblowing policies. This is to the
benefit of organisation, individuals, and society as a whole.”72
Human resource plays the most vital role in the growth of any organization. This corporate
governance has a link with the success of any organization. Whistleblowing ensures that
discloses the malpractices and makes sure that good standards have adhered which is critical
131
to the concept of corporate governance.73
There is an indirect link between the two terms as the company where the members are
71
encouraged to blow the whistle without fear of negative consequences. Due to such a boost,
146
the principle of corporate governance is protected, and the maintenance of efficient practices
in the company is ensured.74
It can be concluded that there exists a direct relationship between policies of whistleblowing
and corporate governance whistleblowing intrinsic part of corporate governance if the policies
186
and procedures are improved it would strengthen the growth of corporate governance in the
country.
22
71 UK Corporate whistleblowing Commission, 2013, https://Corporate whistleblowing/public-concern-at-
work/wp-content/uploads/images/2018/09/08222935/wbc-report-final.pdf retrieved on 1st April, 2023.
72 Supra at 3 pg. 672.
73 Interview with Senior Counsel of Schlumberger India.
74 Interview with the Vice President of Tata AIA in Legal & Compliance.
52 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 5: Analysis of whistleblowing policies of companies having operations in India
__________________________________ _ _ _ _ _ _ _ _ __
CHAPTER-5
_____________________________________________ _ _ _ _ _ __
5. ANALYSIS OF WHISTLEBLOWING POLICIES OF
COMPANIES HAVING OPERATIONS IN INDIA
A whistleblowing policy is an organization-written policy that explains the organization’s
approach to counter unethical and malpractices happening within the enterprise. It can be
12
defined as a means to persuade internal whistleblowers such as employees, shareholders, and
workers, and external whistleblowers such as media, higher government officials, and police
authorities to report the wrongdoings happening within the corporation. The organization
should take active steps to instore confidence among the whistleblowers so that they would not
have fear or fright to inform about the malpractices and file complaints against those that are
involved in the commission of the fraud. The corporation must instill confidence among the
whistleblowers that they won’t be retaliated then they can come forward to report a complaint
by complying with the organization’s whistleblowing policy. For the same to happen the higher
management of the company should be focused on safeguarding the interest of the
whistleblowers and should be dedicated to eliminating unethical practices from the company.
Employees are an integral part of the organization and policy should be enacted in such a
manner that there is a curb on wrongdoings. Employees detect fraudulent activities at an early
stage but due to fear of negative consequences, many remain silent.
The whistleblowing policy shall be formulated by the management but the same needs to be
25
presented before the audit committee and the Board of Directors for their approval.75 It is vital
that the whistleblowing policy is updated from time to time so that it can adapt to the change
15
in time. Post the circular passed by the Securities Exchange Board of India (SEBI) passed on
21
26th November 2003 which inserted Clause 49 of the SEBI listing Arrangement the legislature
has held that it is mandatory for all the listed entities to have a whistleblowing policy.76 Many
unlisted companies that were not mandated to formulate the whistleblowing policy have taken
75 Shilpi Thapar, “Whistleblowing: An important62 Aspect in Corporate Governance and Role of Company
Secretary as Effective Whistleblower”, souvenir of 40th National Convention of Company Secretaries, available
at:23https://www.icsi.edu/docs/40nc/40%20NC-Souvenir.pdf. Retrieved on 2nd April, 2023.
76 https://www.sebi.gov.in/legal/circulars/aug-2003/corporate-governance-in-listed-companies-clause-49-of-the-
53 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 5: Analysis of whistleblowing policies of companies having operations in India
an active step to establish a channel for reporting complaints and the end goal is to eliminate
corruption from the system. Further, stock exchanges shall set up monitoring cells to obtain
quarterly compliance reports and regarding the compliance of the master circular, the
compliance report to the SEBI shall be furnished within 30 days of every quarter.77
At the time of formulating the whistleblowing policy, the company should consider the
following points
193
Introductory part: In this part of the whistleblowing policy the company should ensure that
the company should carry business in an ethical way and ensure that transparency is kept
with the stakeholders and instill company principles in every member that is associated
with the company.
176
Scope and objectives of the policy: The scope and objectives of the policy should be laid
down so that the members can relate to the policy and come forward and file complaints.
The concerns happening within the organization shall be dangerous to the safety and life of
an individual, misconduct or corrupt practices, and failure to abide by lawful duty.
All the necessary definitions should be covered: The definition clause tends to make
reading and interpretation of the agreement simpler and it reduces ambiguity. Certain
essential definition under the whistleblowing policy includes victimization, whistleblower,
improper activity, and Audit Committee.
Protection of the whistleblower: The most integral aspect of the policy should be to protect
and safeguard the interest of the whistleblower and their family. The same can be done by
following the ways of assuring the whistleblower and their family by protecting against
retaliation, whistleblower’s details are not disclosed, and ensuring that the whistleblowers
shall not face any adverse employment consequences.
Confidentiality: It is integral for the safety of the whistleblower that confidentiality is not
leaked which can endanger the well-being of the whistleblower. It is very common that
whistleblower as well as their family members after their identity is disclosed physical and
mental trauma is caused so that they would withdraw the complaint against the accused.
Clearly defining the reporting procedure: The whistleblowing policy should clearly define
the reporting procedure which would give clarity as to which authority to report. The
77 Ibid.
54 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 5: Analysis of whistleblowing policies of companies having operations in India
organization should clearly define the competent authority and members of the competent
authority which would make it easier for the whistleblower to lodge a complaint. The
whistleblower should be allowed to make a complaint online or through physical mode. In
this stage, the policy should determine the appeal procedure and the timeline for disposing
of each case.
False Complaint: As much as the company is inclined towards eliminating corruption it
should take strict action against those that are filing false complaints. After, a thorough
investigation the company should take steps to mitigate false complaints and take actions
like imposing monetary penalties if not enough can terminate the employee.
Rewarding the whistleblower: After the claim made by the whistleblower against the
accused is proven the whistleblowing policy should entail a reward provision that would
motivate the other members of the entity to report unethical practices to the competent
authority.
The main intent of the whistleblowing policy should be to have a smooth process so that they
can report complaints and ensure that perpetrators are brought to justice and there is an
elimination of fraudulent practices from the company and employees are motivated to
contribute towards the corporate goals in a legal way.
5.2.1. DELOITTE78
Deloitte is a UK-based accounting organization that has expanded across the globe. India is
also the country where the company carries out its functions. The company is a publicly listed
companying to the SEBI Listing regulations they have made a whistleblowing policy. The
whistleblowing policy of the company was previously updated in the year 2021.
The policy mentions people eligible to be whistleblowers and includes both internal as well as
external persons. It also prescribes a number that whistleblower can use to report any
irregularity in the company. Further, there is a clear list of offences that can be reported by a
whistleblower. Further, the policy also mentions the procedure that a whistleblower i s supposed
to follow such as the reporting of the complaint shall be done through a telephone or an online
65
78
Whistleblowing policy of Deloitte, https://www2.deloitte.com/content/dam/Deloitte/au/Documents/about-
deloitte/deloitte-au-about-whistleblower-policy-201219.pdf, retrieved on 2nd April 2023.
55 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 5: Analysis of whistleblowing policies of companies having operations in India
submission. The complaint can be filed before the Chief Executive Officer, Ethics Officer,
business unit leaders, Chair of the Board, and Chief Taxation Officer. The whistleblowing
129
policy allows the filing of an anonymous complaint to ensure that the identity of the
whistleblower is kept confidential. The policy also lists the situations of reportable conduct.
84
a) Illegal conduct, theft, violence, and criminal damage against the property;
b) Fraud, money laundering, or misappropriation;
c) Financial irregularities;
d) Breach of legal and regulatory requirements.
The policy enumerates the protection that is provided to the whistleblower which includes
Shortcomings
Along with the positives, various gaps are present in the whistleblowing policy. The
whistleblowing policy fails to include a reward mechanism for the whistleblowers if their claim
20
is proven. The policy fails to provide protection to the family of the whistleblower. Under the
definition clause, the policy fails to describe the definition of victimization. The corporation
tends to establish separate authority which would deal with the whistleblowers complaints in
this whistleblowing blowing policy the company does not establish a separate authority to deal
with whistleblower complaints.
79
5.2.2. INFOSYS
15
79
Whistleblowing policy of Infosys,https://www.infosys.com/investors/corporate-
governance/documents/whistleblower-policy.pdf, retrieved in 2nd April 2023.
56 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 5: Analysis of whistleblowing policies of companies having operations in India
At the start of the policy purpose of the whistleblowing policy is enumerated as the company
and its subsidiaries believe in complying with domestic as well as international laws and
working in compliance with the company’s ethics. Directors, trainees, and other people
associated with the organization can raise concerns regarding the potential violation and would
not have any fear of retaliation. The policy explains the procedure of reporting which can be
done by calling a specific number or emailing at an ID that is specified in the policy. After the
report is lodged then an investigation is been conducted to check whether the complaint that is
filed is false or not. The policy strictly prohibits retaliation against the whistleblower and shall
conduct disciplinary action against the offender. The documents concerning the investigation
shall be kept with the company.
Shortcomings
Reliance Jio Infocomm Limited is a subsidiary company of Jio Platforms and has business
across India. The company is one of the biggest telecom giants in India. The company believes
in the principle of transparency and openness the company is not a listed entity but still has a
39
80 https://www.ril.com/getattachment/cc59b9bf-7776-492d-a65f-0e458410e062/Vigil-Mechanism-and-Whistle-
Blower-
Policy.aspx#:~:text=RJIL%20prohibits%20its%20Employees%20from,may%20include%20dismissal%20from
%20employment., retrieved on 2nd April, 2023.
57 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 5: Analysis of whistleblowing policies of companies having operations in India
whistleblowing policy to provide clarity to the members of the company about the reporting
mechanism and protect them from retaliation.
The Introductory part of the whistleblowing policy obligates the employees that are critical
pieces of the organization to report fraudulent practices happening within the organization. The
reporting of the complaint can be made via email, by contacting the number specified in the
whistleblowing policy, or through the issuance of a letter. The identity of the whistleblowers
shall be kept confidential so that their safety is not hampered. It is essential that the complaint
18
should be investigated, if the complaint is found to be false then disciplinary action cannot be
taken. The Audit Committee is responsible for overviewing the whole process it shall also
25
receive reports from the ethics and compliance task force concerning the investigation. In case
25
of conflict of interest, the members of the Ethics & Compliance Task Force shall be prevented
from acting in that protected disclosure.
Shortcomings
To have a whistleblowing policy of an unlisted company explains that the company is inclined
towards disclosure making to the stakeholders. However, the policy needs significant addition
for it to become complete. The whistleblowing policy mentions that the investigation shall not
be conducted for anonymous complaints which can affect the safety of the whistleblower. The
26
whistleblowing policy neglects to protect the family of the whistleblower in turn negatively
impacting the interest of the whistleblower. The policy fails to define the term “victimization”
which makes it unclear what can constitute a threat or retaliation against the whistleblower.
The policy fails to external whistleblowers in the ambit of whistleblowers, thus external
whistleblowers such as media enforcement agencies, and police authorities. The
whistleblowing policy fails to cover the reward mechanism for the whistleblowers which
negatively impacts their intent to report a complaint against the wrongdoings that are happening
within the company.
58 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 5: Analysis of whistleblowing policies of companies having operations in India
28
company whereas AIA Group holds a 49% stake in the company. The vision of the company
is to be a pre-eminent protection provider enabling dreams and inspiring healthier and happier
lives. The mission of the company is to provide the best and simplest life and health insurance
solutions81. Types of insurance policy
The whistleblowing policy of the company was last updated in the year 2022. The company in
its introduction has emphasized conducting affairs fairly and transparently. The policy
recognizes the role of the employees, directors, and stakeholders pointing out the code that
cannot be undermined. Under the definition of whistleblower, only the employee and the
director are covered. The disclosure made by the whistleblower shall be protected. The
38
reporting shall be done to the chairman of the ethics committee. The investigation shall be
completed by the committee within 45 days. Proper protection is provided to the whistleblower
48
against any kind of retaliation. The company shall be retaining the documents for a minimum
period of seven years.
The whistleblowing policy of the company makes sure that the whistleblower does not have to
go through negative consequences. The company tries to create an environment where the
whistleblower is emotionally and mentally stable which is critical at the time of investigation
of the claim. The whistleblowing policy ensures that protection is provided to the
whistleblower and actions are taken against those that are responsible.83
Shortcomings
Tata AIA being an unlisted company has taken an effort to enact a whistleblowing policy which
is a commendable act. However, the policy needs to be relooked at and updated. The policy
misses out on certain key essentials such as failure to protect the family of the whistleblowers.
Failure to provide protection discourages whistleblowers to report a complaint. The
43
81 https://www.tataaia.com/about-us/who-we-are.html. Retrieved on 3rd April, 2023.
132
82 https://www.tataaia.com/life-insurance-plans/types-of-life-insurance.html, retrieved on 3rd April, 2023.
83
Interview with the Vice President of Legal and Compliance in Tata AIA Life
59 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 5: Analysis of whistleblowing policies of companies having operations in India
whistleblowing policy fails to cover external whistleblowers. The policy does not reward the
whistleblower for their contribution to disclosing wrongdoings that are happening within the
company. The definition clause fails to include the definition of victimization which creates an
84
ambiguity as to what can amount to retaliation or intimidation to the whistleblower. The
policy does not describe the repercussions of filing a false complaint, due to the lack of such a
provision numerous irrelevant complaints can be filed by the members of the company thus
disciplinary action can be taken against those that file a baseless complaint.
Incident of whistleblowing
The whistleblower played a critical role in reporting the unethical disclosure concerning the
audit of the company. The manager of the whistleblower was involved in making the unethical
disclosure. The whistleblowing before making the complaint to the ethics committee collected
all the necessary evidence. A thorough investigation was conducted to analyze whether the
complaint filed was false or not after the investigation the complaint was found to be true and
acute and strict action was taken against the offender and he was terminated from
employment.85
The initial part of the whistleblowing policy highlights the purpose of the whistleblowing
policy which creates a kind of environment for the whistleblower to report unethical conduct
5
and ensures that the company’s code of conduct is maintained. The policy of whistleblowing
defined whistleblowers as the employees and the directors of the company that can report
wrongdoings. Protection is been provided to the whistleblower against any kind of retaliation.
The reporting by the whistleblower should be done in a good faith. The whistleblowers are
60 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 5: Analysis of whistleblowing policies of companies having operations in India
allowed to file anonymous complaint provided strong evidence are provided by the
whistleblower. The complaint can be sent through the following ways
1. Email
2. Writing the complaint to the company secretary
3. Write it to the business head.
125
4. Complaint to the chairperson of the Audit Committee
155
The policy focuses on protecting the confidentiality of the whistleblower without revealing the
identity of the whistleblower during the investigation process. Upon receipt of the complaint,
the preliminary investigation shall be conducted by the value standard committee. Appropriate
action shall be taken if it is filed with malicious intent. The process of investigation shall be
completed within 3 weeks. The appeal provision should be exercised by the aggrieved within
7 days. The appeal shall be closed in the next three weeks. The company in its whistleblowing
policy lists down the reportable conduct such as
Misappropriation of the Company’s assets
Financial Fraud
Sharing of confidential information
Insider trading
Related party transaction
Bribery and corruption
Misuse of authority
The Company inculcates confidence among the whistleblower by conducting seminars every
month where they are taught how to report unethical practices. To reduce the burden of negative
consequences from the whistleblower the company tends to provide emotional as well as moral
support.88
Shortcomings
Schlumberger Solutions Private Limited is an unlisted company that has complied with SEBI
listing regulations. The policy needs certain modifications some of which include
1. Having protection against retaliation members of the whistleblower.
2. Reward mechanism for the whistleblower, if the claim made, is proved
3. Defining the term “victimization”
These upgrades need to be done in the whistleblowing policy for it to become complete.
Incident of whistleblowing
One of the employees of the company acted as a whistleblower in a related party transaction.
One of the whole-time directors wanted to pass a tender for the purchase of equipment from
the supplier company which was controlled by the brother of the whole-time director. The
whole-time director did not want the transaction to get reviewed by the audit committee. The
employee which acted as a whistleblower disclosed that this transaction was a related party
61 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 5: Analysis of whistleblowing policies of companies having operations in India
32
transaction and needs to be reviewed by the audit committee. Post the review of the audit
committee it was found that the supplier was charging more than the market price thus saving
the company from huge loss.89
201
It is essential that the whistleblowing policy of the company needs to be revamped from time
to time so that it does not become ineffective. Common points that are missing in the majority
of the whistle-blowing policies include a lack of reward mechanism for the whistleblower,
refraining from protecting the family of the whistleblower, failure to define the term
29
victimization, and revealing of the identity of the whistleblower. These points need to be
addressed for that the whistleblowing policy of the company becomes complete. Unlisted
companies should take inspiration from companies like Tata AIA Life and Schlumberger
Solutions Private Limited and enact their whistleblowing policy irrespective of whether it is
mandatory or not. The policy in the company would be the first step towards the goal of
eliminating corruption in the country.
89 Interview with the Senior Legal Counsel of Schlumberger Solutions Private Limited
62 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
96
Chapter 6: Conclusion
CHAPTER-6
6.1. CONCLUSION
5
The term whistleblowing is gaining acceptance worldwide as it is an important means to ensure
disclosure and transparency of the global market. The fortitude and the high moral
5
responsibility of the whistleblower can play a vital role in fighting loose ethics and poor
corporate governance practices. Though whistleblowers play such a critical role in identifying
fraudulent activities, they have to go through insult, retaliation, boycott, and even death. Due
to such negative repercussions, many individuals refrain from reporting their complaints it is
essential that a threat-free environment needs to be created where the complaints can be filed
without any fear. India lacks to have comprehensive legislation, it cannot be denied that the
legislature has taken attempts but all in vain as there is a poor implementation of the laws. The
statutes implemented contain various loopholes which impact the effectiveness of the
legislation the same has been enumerated under Chapter 2. The prominent reasons for
inefficient legislation include an inadequate effort to pass amendments to the Whistleblowers
Protection Act, 2014, poor implementation of the existing statutes failure to include private
corporate bodies within the purview of the Act, and lack of comprehensive protection for
whistleblowers. It is essential that efforts need to be shown from top management support,
culture, and high-level leadership to encourage the practice of whistleblowing within the
2
company. India has witnessed various scams such as Punjab National Bank Scam, Sahara
Scam, and the Kingfisher Scam, in all these scams whistleblowers had provided early warning
to the authorities however, their contentions were ignored by the authorities. Whistleblower
complaints are on the rise however, the governing law to treat the complaint and protect the
whistleblower is murky and changing. This explains the dire need to revamp the laws and not
bow down to the pressure of the corporates as a better regulatory framework reduces the
prevalence of fraudulent activities.
6
Countries like the United States and the United Kingdom have a long history of regulations
concerning whistleblowing, and the framers of the legislation have taken active steps to update
156
the regulations so that it does not get outdated. The administration has ensured that active steps
have been taken to implement the law. It is essential that India should take inspiration from
58
countries such as the United States, United Kingdom, and Japan that have complete statutes.
63 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 6: Conclusion
India has witnessed various examples where whistleblowers were victimized due to a lack of
complete regulations on whistleblowing the same has been highlighted in Chapter 3. There are
104
some similarities between the Indian Statute and the statutes of the United Kingdom and the
United States such as informing the complainant about the outcome of the complaint. Purpose
of the legislation and protection of the identity of the whistleblower. Prominent lacunas that
3
need to be fixed include extending the coverage of the Whistleblowers Protection Act, 2014 to
the corporates, extending protection under the Act to the family of the whistleblower,
incentivizing the whistleblower for their efforts and contribution, and allowing investigation
over anonymous complaints.
To combat the problem of corruption that is prevalent and increasing tremendously year-on-
year basis. Strengthening the whistleblowing system would increase the practice of integrity
64 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 6: Conclusion
within the system It is observed that a friendly and supportive environment within the
organization motivates whistleblowers to eliminate unethical practices. Thus, allowing
whistleblowers to provide evidence and safeguarding them from victimization are the objects
of the enacted legislation in India, however, the purpose is not getting realized due to the
shortcomings the same can be amended by the legislature ensuring that it is a constructive effort
of the legislature not like the Amendment Bill of 2015.
6.2 SUGGESTIONS/RECOMMENDATIONS
Whistleblowing is recognized as an important aspect of reducing corruption. The menace of
corruption can only be cured if there is the participation of people in reporting unethical
activity. In a democratic society, it is a need to have the participation of whistleblowers in
eliminating wrongdoings that persist within the organization. The main problem that persists
with the Indian legislation is poor implementation. Many whistleblowers refrain from filing a
complaint as they are subject to retaliation. The legislature has taken active steps to enact
legislation in the interest of the whistleblower the prominent one being the Whistleblower
Protection Act, 2014 however, the legislation has a narrow scope and only extends protection
to the public official that reports wrongdoings that are happening within the government body.
Whistleblowing practice is a prominent tool to create transparency and check on the
unwarranted practices that are happening. The SEBI Listing arrangement only mandates the
listed entities to have a whistleblowing policy in the company however, frauds and unethical
activities are prevalent even in the unlisted entities. At the same time, it cannot be denied that
awareness of the regulations has increased among whistleblowers. Certain pre-conditions of
whistleblowing include
Assurance should be provided to the whistleblower that they and their family are protected
after the disclosure or the complaint against the accused is been registered.
16 138
The whistleblower should act in a good faith and provide sufficient evidence and the
disclosure should be made in the public interest.
The disclosure must be made complying with the process as specified in the whistleblowing
policy or the legislation.
Internationally many agreements and conventions have been entered to ensure that corruption
2
is eliminated from the system. Some of the International Conventions include the United
65 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 6: Conclusion
RECOMMENDATIONS
78
90 United Nations Convention against corruption,
https://www.unodc.org/documents/brussels/UN_Convention_Against_Corruption.pdf. Retrieved on 5th April,
2023
123
91 Council of Europe protection on whistleblowers, 2013, https://rm.coe.int/16807096c7, retrieved on 5th April,
2023
44
92 European Convention on Human Rights, https://www.echr.coe.int/documents/convention_eng.pdf, retrieved
on59
5th April, 2023
93 International Covenant on Civil and Political Rights,
https://www.ohchr.org/sites/default/files/Documents/ProfessionalInterest/ccpr.pdf,
34
retrieved on 5th April, 2023.
94 African Union Convention on Combating Corruption, https://au.int/sites/default/files/treaties/36382-treaty-
66 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 6: Conclusion
complainant, and retaliation against the whistleblowers. The same is witnessed due to
inadequate laws. The Act should protect the whistleblower from civil and criminal liability.
37
The appropriate authority was established under the Whistleblowers Protection Act, 2014
is under the influence of the government. The authority should be an independent body that
addresses the complaints and issues of the whistleblower. Thus, the authority established
should be autonomous and free from any kind of influence of the government to arrive at
an appropriate decision.
13
The Law Commission of India at the time of drafting the legislation on whistleblowing had
8
defined the term “victimization” which included “compromise, transfer, discharge
extraction of power or duties. The Whistleblower Protection Act, 2014 excluded the
definition of victimization, thus creating ambiguity at the time of reporting complaints
against retaliation. The Act also misses laying provisions for punishment against those that
8
victimize the whistleblower. The definition framed by the Law Commission should be
inserted in the Whistleblower Protection Act, 2014 through an amendment.
Unlike the legislation of the United States, which reward the whistleblower with around
15-30% of the wealth recovered by the government. The same is missing in the
Whistleblower Protection Act, 2014. It is essential that the Act, provide compensation for
their efforts to report wrongdoing and also should be compensated in case they face
victimization and the same is proved.
In today’s time, litigation costs have skyrocketed many whistleblowers that are registering
complaints are not financially sustained to fund their litigation costs. It is essential that in
such case government assistance should be provided by the Government. It is essential that
a separate corpus needs to be established for the whistleblowers which covers a huge
amount of litigation debt.
Many corporations and individuals are getting aware of the importance of whistleblowing.
However, the major population in the country is not aware of the practice, regulations, and
modes of reporting. Companies must take inspiration from Schlumberger which organizes
monthly seminars on the topic of whistleblowing and make them aware of the mode of
reporting unethical practices to the appropriate authority. Along with the corporation, the
administration should take active steps to increase awareness about whistleblowing in print
and electronic media.
The Whistleblower Amendment Bill, 2015 could not be implemented due to time-lapse.
However. The bill imposes restrictions on making the evidence public on numerous
67 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 6: Conclusion
152
grounds if any information impacting the public interest should be disclosed to the public
and cannot be kept under the official secrets act until it impacts the integrity and sovereignty
of the country.
Clause 49 of the SEBI Listing arrangement has been enacted through an amendment of
2003. The clause is a positive step toward the growth of whistleblowing but only mandates
the listed entities to pass a whistleblowing policy. Wrongdoings are also witnessed in
private enterprises examples being Sahara India Properties Private Limited and Grow More
Productions Private Limited. Thus, it is essential that the legislature should pass an
amendment to mandate the passing of whistleblowing policy even in unlisted companies.
149
The Whistleblower Protection Act, 2014 unlike in the United States and the United
Kingdom does not entertain anonymous complaints. Due to the lack of provision identity
of the whistleblower is at risk. Due to the leak of identity the whistleblower might face
various negative consequences It is equally correct that anonymous complaints shall lead
to the filing of false and frivolous complaints but due to the disclosure protection of the
whistleblower is hampered. Thus, the Act should be amended to allow anonymous
complaints provided that sufficient evidence is furnished by the whistleblower.
It is essential that penalties should be levied on those that reveal the identity of the
whistleblowers. If the penalty clause is included in the legislation same would act as a
130
deterrent and prohibit them from revealing the identity of the whistleblower.
Under the Whistleblower Protection Act, 2014 limited protection is only granted to the
whistleblower, however, the people that support the whistleblower may it be their family
members, friends, or relatives are not provided any kind of protection which creates fear in
the mind of the whistleblower whether they should complain against the wrongdoing or
126
not. India should take inspiration from countries like Canada, the United States, and the
United Kingdom where it grants protection to the family members of whistleblowers.
It has been seen in many cases that whistleblowers are not been given a fair opportunity to
present their cases. It is essential that a fair hearing should be provided to the
whistleblowers and full access should be provided to a tribunal or the court. This change
will allow the whistleblowers to approach the judicial body and report the case without any
fear.
7
There is no recognition in the Whistleblower Protection Act, 2014 regarding protection and
investigation if the complaint is been filed by external whistleblowers. External
77
whistleblowers play a key role in identifying unethical deeds and reporting them which
68 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 6: Conclusion
protects the public interest. External whistleblowers such as police authorities, media
agencies, etc. are a vital piece in the process of eliminating corruption from the system.
Fraud disturbs the whole financial state of the country one of the most effective to eliminate
fraud at an initial stage is by implementing a strong whistleblowing system in the country. This
would motivate the whistleblowers to come forward can register their complaints. The
Whistleblower Protection Act, 2014 was enacted to eliminate corruption by safeguarding the
interest of the whistleblower. Due to various lacunas that are present in the statutes the purpose
199
of the enactment is not achieved. With the prevalence of unethical practices, there is a negative
impact on the corporate governance system of the country. The same also hurts the investors’
confidence which in turn starts losing faith in the company or the organization which impacts
the flow of capital in the economy. To eliminate this issue the legislature should make the
necessary modification to the existing stature and should ensure that it is not a failed attempt
like the 2015 Amendment Bill the modification should not be disputable like many other
amendments.
69 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 6: Conclusion
6.3. References:
Legislations
Whistleblowers Protection Act, 2014, Available at:
https://legislative.gov.in/sites/default/files/A2014-17.pdf.
Companies Act, 2013 Available at:
https://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf.
Clause 49 of the listing agreements, Available at:
https://www.sebi.gov.in/sebi_data/commondocs/cir2803an1_p.pdf.
Companies (Auditors Report) Order 2020, Available at:
https://www.mca.gov.in/Ministry/pdf/Orders_25022020.pdf.
Sarbanes-Oxley Act, 2002, Available at:
https://www.congress.gov/107/bills/s2673/BILLS-107s2673pcs.pdf.
Public Interest Disclosure Act, 1998, Available at,
https://www.legislation.gov.uk/ukpga/1998/23/contents.
Competition Act, 2002, Available at
https://www.mca.gov.in/Ministry/actsbills/pdf/The_competition_Act_2002.pdf.
Limited Liability Partnership Act, 2008, Available at,
https://www.mca.gov.in/content/dam/mca/pdf/LLP_Act_2008_15jan2009.pdf.
Corporate Governance Voluntary Guidelines, Available at,
https://www.mca.gov.in/Ministry/latestnews/CG_Voluntary_Guidelines_2009_24dec200
9.pdf.
Employee Rights Act, 1996, Available at
https://www.legislation.gov.uk/ukpga/1996/18/contents.
Enterprise and Regulatory Reforms Act,
https://www.legislation.gov.uk/ukpga/2013/24/contents/enacted.
Dodd-Frank Wall Street Reform and Consumer Protection Act, 2010,
https://www.congress.gov/111/plaws/publ203/PLAW-111publ203.pdf.
Sarbanes-Oxley Act, 2002, Available at, https://www.govinfo.gov/content/pkg/COMPS-
1883/pdf/COMPS-1883.pdf.
Whistle-blowers Protection Act, 1989, https://sgp.fas.org/crs/natsec/RL33918.pdf.
Civil Rights Act, 1964, ,
https://www.ilo.org/dyn/travail/docs/1583/CIVIL%20RIGHTS%20ACT.pdf.
70 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 6: Conclusion
Books
Susan Fowler, Whistleblower: My unlikely journey to Silicon Valley and speaking out
against injustice, penguin publishing group.
Myron Glazer, Penina Glazer, Whistleblower, Basic Books publications.
Research Papers
71 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 6: Conclusion
Articles
72 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Chapter 6: Conclusion
73 | P a g e
NMIMS School of Law, Navi Mumbai and 2023
Similarity Report
TOP SOURCES
The sources with the highest number of matches within the submission. Overlapping sources will not be
displayed.
ijlmh.com
2 <1%
Internet
icsi.edu
3 <1%
Internet
legalservicesindia.com
4 <1%
Internet
dpublication.com
5 <1%
Internet
Sources overview
Similarity Report
powershow.com
9 <1%
Internet
iclrap.in
10 <1%
Internet
ijnrd.org
11 <1%
Internet
exampapers.nust.na
12 <1%
Internet
supremoamicus.org
13 <1%
Internet
ijlpa.com
14 <1%
Internet
bseindia.com
15 <1%
Internet
garph.co.uk
17 <1%
Internet
rulebook.centralbank.ae
19 <1%
Internet
rgnul.ac.in
20 <1%
Internet
Sources overview
Similarity Report
dspace.library.uvic.ca
22 <1%
Internet
law.dypvp.edu.in
23 <1%
Internet
jaimataglass.com
25 <1%
Internet
gov.nlujodhpur.ac.in
30 <1%
Internet
img1.wsimg.com
31 <1%
Internet
dlnluassam.ndl.iitkgp.ac.in
32 <1%
Internet
Sources overview
Similarity Report
vdocuments.mx
38 <1%
Internet
ril.com
39 <1%
Internet
transparency.nl
41 <1%
Internet
papasearch.net
43 <1%
Internet
undp.org
44 <1%
Internet
Sources overview
Similarity Report
digitalcommons.law.seattleu.edu
51 <1%
Internet
advocatekhoj.com
52 <1%
Internet
ebc-india.com
53 <1%
Internet
sunilpandeyiitd.org
54 <1%
Internet
Sources overview
Similarity Report
au.archives.gov.ua
57 <1%
Internet
dokumen.pub
58 <1%
Internet
lup.lub.lu.se
59 <1%
Internet
caveatlegal.com
60 <1%
Internet
cvc.nic.in
64 <1%
Internet
d1h79zlghft2zs.cloudfront.net
65 <1%
Internet
playthegame.org
66 <1%
Internet
latestlaws.com
67 <1%
Internet
southdevonsteinerschool.org
68 <1%
Internet
Sources overview
Similarity Report
blog.ipleaders.in
75 <1%
Internet
doczz.net
76 <1%
Internet
fastercapital.com
77 <1%
Internet
amazoniainvestiga.info
78 <1%
Internet
lawaudience.com
79 <1%
Internet
Sources overview
Similarity Report
bibliotecadigital.fgv.br
82 <1%
Internet
ccijournal.in
83 <1%
Internet
geogroup.com.au
84 <1%
Internet
newukrainianlaw.in.ua
85 <1%
Internet
uwe-repository.worktribe.com
86 <1%
Internet
anticor.hse.ru
89 <1%
Internet
iosrjournals.org
90 <1%
Internet
Sources overview
Similarity Report
dypatilunikop.org
96 <1%
Internet
hinduonnet.com
97 <1%
Internet
Mancosa on 2016-04-20
98 <1%
Submitted works
eprints.kingston.ac.uk
103 <1%
Internet
unctad.org
104 <1%
Internet
Sources overview
Similarity Report
bura.brunel.ac.uk
105 <1%
Internet
press-files.anu.edu.au
106 <1%
Internet
en.wikisource.org
115 <1%
Internet
onlinelibrary.wiley.com
116 <1%
Internet
Sources overview
Similarity Report
pure.jgu.edu.in
117 <1%
Internet
aseestant.ceon.rs
118 <1%
Internet
LexisNexis
123 <1%
Publication
Sources overview
Similarity Report
assets.publishing.service.gov.uk
133 <1%
Internet
dokumen.tips
134 <1%
Internet
en.unionpedia.org
135 <1%
Internet
3fdef50c-add3-4615-a675-a91741bcb5c0.usrfiles.com
136 <1%
Internet
Sources overview
Similarity Report
dspace.ceid.org.tr
151 <1%
Internet
hansard.parliament.uk
152 <1%
Internet
Sources overview
Similarity Report
idoc.tips
153 <1%
Internet
pdfs.semanticscholar.org
154 <1%
Internet
sportwhistle.eu
155 <1%
Internet
ti-defence.org
156 <1%
Internet
muellerjens.com
157 <1%
Internet
shashkova.expert
158 <1%
Internet
"Islamic Wealth and the SDGs", Springer Science and Business Media L...
159 <1%
Crossref
Sources overview
Similarity Report
Sources overview
Similarity Report
Sources overview
Similarity Report
ideas.org.my
194 <1%
Internet
images.transparencycdn.org
195 <1%
Internet
pezzottaitejournals.net
196 <1%
Internet
searchpub.nssc.nasa.gov
197 <1%
Internet
chartsec.co.za
198 <1%
Internet
ra-un.org
199 <1%
Internet
researchgate.net
200 <1%
Internet
Sources overview
Similarity Report
sgco.co.in
201 <1%
Internet
Sources overview