Corporate Law - II Project

Paper

Whistleblowing in India, US and UK Corporate Laws: A

Comparative Study

Submitted To

Hemavathi Sekhar

Faculty of Law

Submitted By

Harshed Sundar

BA0160017
 Tamil Nadu National Law University
Tiruchirappalli

March 2019

Page 1
Content

Introduction.....................................................................................................3

The US Position................................................................................................4

The First Whistleblower............................................................................5

Corporate Sentencing ...............................................................................5

Crisis in the US in the year 2001..................................................................6

The UK Position................................................................................................7

Background to the Act...............................................................................8

The Indian Position..........................................................................................10

Justification for Whistleblowing................................................................10

Freedom of information under Article 19(1)(a).............................................11

Right to know under Article 21..................................................................11

Safeguards to Whistleblowers...................................................................13

Conclusion .....................................................................................................14

Page 2
Whistleblowing in India, US and UK Corporate Laws: A
Comparative Study
“​Globalization of business is an accepted fact, as is the growing power of multinational
corporations

(MNCs). Whistleblowing is a procedural way to reinforce the transparency necessary to free

trapped capital, encourage foreign investment, and move economies especially transitional
ones

away from reliance on personal relationships and bribes. Empowering individuals to combat

cronyism and call into question economic decisions made for personal gain rather than the
general

good should allow more resources to be allocated to those at the bottom of the economic
scale.

Whistle-blowers have drawn nearly universal praise for helping to ensure that their employers
obey

the law. They perform valuable civic services by revealing information that their employers
chose to

suppress. Employees are in a unique position to uncover wrongdoing in the workplace. They
can

tell more readily than governmental inspectors whether their employers are violating safety

standards. In recent years, while agency budgets have been cut, the employee whistle-blower
is

often the only source of information about company activities that threaten public health and
safety.

The whistle-blower thus becomes the public's, and the government's, only way of discovering

employer misconduct. Whistleblowing as a governance tool becomes even more important in

this

context because it encourages responsive, and thereby responsible, governance practices. It

gives
individuals a say in their organization, and contributes to a feeling of procedural justice. Giving

individuals a standardized way to speak and be heard also helps reinforce democratic ideas.
This

check on power is crucial for an effective democratic institution. Whistleblowing leads to

accountability, and accountability helps defuse the resentment and opportunities for
corruption.​”

The most commonly accepted modern definition of whistleblowing is "the disclosure by

organization members (former or current) of illegal, immoral or illegitimate practices under the

control of their employers, to persons or organizations that may be able to effect action.". The
word

‘Whistleblowing’ normally refers to the disclosure by individuals of concerns of malpractice as

well

as illegal acts or omissions at

work.

Activities such as arbitrariness, illegality or a wrongful act by the such personality which may
have

a say in the company in one way or the other and the same must be brought into the notice of

general public and courts so that they could become aware of the same and necessary
actions may

be taken accordingly in order to check any such activity. Such a dominant personality can be
any

Page 3
one. It may be the State or any of its instrumentalities or even the private employers because
they

by virtue of their position and resources are capable of suppressing the wrongful
conduct.

It is said that the concept of whistleblowing is the gift of foreign countries, particularly the
USA.
Here it will be relevant to mention that in India to the active role that the media enjoys and the

Constitution also by the way of the Public interest petitions has devised the same mechanism.
The

case of M.C.Mehta is an example in this regard, a public spirited person who has time and
again

come out with such activities that have not only revived the hopes of the persons who were

suffering from such atrocities by the so called influential class but it has also put a check on
the

existing law violators that have been punished by law, but such future persona also who could
have

performed the same activity.

THE US POSITION
The USA is said to have taken the lead in enacting Whistle-blower Protection Statutes. The
Federal

Act called the Whistleblower Protection Act of 1989 was one among the first of its kind that
saw the

daylight under the US regime. This enactment was more or less an amendment to the Civil
Service

Reforms Act of 1978. Under the said Act the object was to provide freedom to Federal
employees to

come out in the open and voice out irregularities, instances of fraud and disclose information
which

they reasonably believe evidences a violation of law, rule or regulation, a gross waste of
funds,

gross mismanagement, abuse of authority or a substantial and specific danger to public

health and

safety. The Adjudicating authority being the United States Merit System Protection Board and
only 1​

if they had erred in the fact finding process would judicial scrutiny be available. The Office of

Special Counsel created under the Civil Service Reform Act of 1978 was to represent the
needs of

the Whistle-blowers before the US Merit System Protection Board. But later this could not
meet the

result for which it was formulated and it turned out to be a big disaster. As part of its merit
system

and philosophy of avoiding arbitrariness, the CSRA created "personnel actions" and
"prohibited

personnel practices. As a result of Mount Healthy Board of Education v. Doyle the cause of
the

Whistle-blowers took a step backwards. The ratio of the case was even if the mistreated
employee

can establish a causative linkage between the earlier and later events, the employer can still
legally

get away with retaliatory action by proving that it would have taken the later action even if the

earlier protected conduct had not

occurred.

Quentin Dempster, ​Whistleblowers, ​1997, ABC Books, Australian Broadcasting

Corporation, 1​​ provides several examples. C Fred Alford, ​Whistleblowers: broken lives
and organizational ​power,​ Cornell University Press, 2001, states
Page 4
The First Whistleblower

“​In the 1794 Jay Treaty, the United States agreed to pay £600,000 sterling to King George III,
as

reparations for the American Revolution. The US Senate ratified the treaty in secret session
and

ordered that it not be published. When Benjamin Franklin's grandson published it anyway
(perhaps

our first whistleblower), the exposure and resulting public up-roar so angered the Congress
that it

passed the Alien and Sedition Acts (1798) so federal judges could prosecute editors and
publishers

for reporting the truth about the government.​” ​Indeed, recent corporate scandals and the
events of

September 11, 2001, have increased support for whistleblowing. Whistleblowing has also
gained

advocates and acceptance as an organizational control strategy in other nations. The United 2​

Kingdom and the Australian states and territories were among the first governments to follow
the

U.S. lead in facilitating whistleblowing. Although whistleblowing laws enacted in the United
States,

the United Kingdom, and Australia have similar antecedents and objectives, legislative bodies
in

these countries have taken a variety of approaches to disclosures of wrongdoing. ​“​The

premise

behind recent governmental promotion of whistleblowing is that people of conscience work

within

these large, complex organizations, and would normally take action against wrongdoing
except for

fear of losing their jobs or other forms of retaliation. Thus, if adequately protected from
retaliation, 3​

they will come forward with evidence of wrongdoing before external detection is possible.
Harms

from the wrongdoing could be reduced, wrongful behavior stopped, and the expense of public

oversight and investigation would be reduced if such reporting occurs. Also, if whistleblowing
proved a relatively common occurrence, wrongdoing would decrease because potential
wrongdoers

would be aware that their activities were not truly

secret.​”

Corporate Sentencing
Guidelines

“​In 1997, the Nolan Committee on Standards in Public Life recommended the setting up of

procedures for whistleblowing, which would allow individuals to rise, concerns internally within
an

organisation and externally in the USA. As public policy supporting whistleblowing has
matured,

there has been a shift toward encouraging internal whistleblowing and away from the almost

exclusive legislative emphasis on reporting outside the organization. This represents a

change in

emphasis away from a primary focus on punishment by governmental bodies toward earlier
and

more complete cessation of wrongdoing. There are many other advantages to internal
reporting. It

Fletcher, JJ, Sorrell, JM, and Silva, MC, ‘Whistleblowing as a failure in

organisational 2​​ politics’, ​Online Journal of Issues in Nursing​, 31 Dec, 1998

Alexander Dyck, Adair Morse, Lugh Zingales (2010) “Who blows the whistle on corporate
3​
​ ol.LXV No.6.
fraud?” ​ Journal of Finance V
Page 5
accords with the actions of most whistleblowers, is less harmful to the organization and the

employee, and is considered more ethical. A variety of laws and decisions both directly and

indirectly have caused employers to establish internal whistleblowing procedures in order to

reap

the benefits that these reports can deliver. The most important direct cause of organizational
establishment of internal whistleblowing procedures is the Corporate Sentencing Guidelines.
These

guidelines check the wrongdoing in the company. Convicted organizations that have made
little or

no effort to prevent or reduce wrongdoing suffer increased monetary penalties and sanctions,

including probation, and mandated negative

publicity.​”

The Supreme Court has also prompted organizations to establish codes and internal reporting

procedures through its hostile environment sexual harassment decisions. But the applications
of

these norms at the end depend on these organizations only and the extent to which they will
abide

by these norms is again their prerogative. The same will be evident from the way these
guidelines

have been enshrined by the companies. They have established such norms that are checking
only 4​

some part of the corruption which includes all types of mismanagement. But certain other
kinds of

wrongdoing have been not included

herein.

Crisis in the US in the year

2001

“​In the year 2001, the world saw the disclosure of fraud and corruption at the highest levels of
the

American corporate hierarchy. One example is when the controlling family of the Aldelphia

Corporation used the public corporation as a personal banking service, thereby causing the

corporation's collapse, and their criminal prosecution. These corporate scandals also have
had other
wide-ranging effects. Among these were the large lay offs of employees, which have
contributed

both to individual suffering and to the already lackadaisical performance of the U.S. economy.
As a

result, the federal government acted, and it acted in a big way. By passing the
Sarbanes-Oxley Act,

the federal government has changed the business landscape in significant ways for four
groups most

intimately connected with the governance of American public corporations—corporate

managers

and directors, accountants, and lawyers Passed in 2002 in the wake of the accounting
scandals that

resulted in billions of dollars of lost value to shareholders, the Sarbanes-Oxley Act has as its
major

goal the prevention of corporate corruption. An example of protection under the said Act has
been

devised out and the same can be configured out from the section 806, the portion of the
Sarbanes-

Oxley Act that provides protections for employees who report securities fraud, and describes
the

effect that Sarbanes-Oxley has on existing employment law. The Act contains a provision, §
806

Wim Vandekerckhove, Eva E Tsahuridu (2010) “Risky rescues and the duty to blow the
4​
whistle”. ​ Journal of Business Ethics ​Vol.97, pg: 365-380.
Page 6
that aims to protect whistleblowers such as Cooper and Watkins who report accounting fraud.
The

whistleblower provision of the Sarbanes-Oxley Act covers disclosures of information

regarding not
only accounting and financial manipulation, but also, in some circumstances, other types of

fraudulent schemes; health and safety violations; environmental misconduct; product risks;

consumer fraud; false claims against the government; disregard of statutes requiring
disclosure to

federal regulatory agencies; violations of anti-discrimination laws; violations of rules and

statutes

protective of labor; conspiracies to violate the antitrust laws; bribery of public officials,
including

foreign officials; and human rights

abuses.​”

Though Sarbanes Oxley Act of 2002 was the first Federal legislation to provide protection to

whistleblowers of private companies, various States within the US have enacted statutes to
protect

employees of Private Corporations or companies. Most of these statutes unlike the Federal
statute

require the reporting of the disclosure to external agencies. Only in seven states require the

whistleblower to contact an internal agency before reporting to an external agency. A few U.S.

states provide for whistleblowing to a particular public officer. Some statutes that provide
financial

incentives for disclosures require contacting a government agency or filing a lawsuit. Most of
these

statues only require that an employee has a reasonable belief of the violation of a law or other

covered conduct. However the SC of few states is of the contrary opinion. There is also a

divergence on whether the employee has to blow the whistle in a reasonable manner or on a

reasonable belief of the

wrongdoing.

U K POSITION
“​The UK Committee on Standards in Public Life defines it as raising a concern about
malpractice

within an organisation or through an independent structure associated with it. The United

Kingdom's Public Interest Disclosure Act (PIDA) focuses on protection and facilitation of

disclosures in the public or private sector. The PIDA aims to protect the person making the

disclosure from reprisal when disclosures meet the criteria for protection under the Act. The
related

Civil Service Code specifically covers public sector employees and has a broader mandate
than the

PIDA. Two important elements of the Code are as follows. First, the Code allows for public
sector 5​

employees to appeal internal disclosure decisions under the PIDA. Second, it also contains
general

principles of conduct, accountability, duties and loyalties of all. The legislative structure in the

United Kingdom is distinctive insofar as the PIDA is an umbrella statute covering disclosures
and

Adrian O’Dowd, Josephine Hayers and Deborah Cohen (2010), ​British Medical Journal, ​Vol.
5​
340, ​ No. 7756, pp. 1110-1113.
Page 7
reprisal protection for public or private sector employees, while the Code provides more
specific

mechanisms for public sector employees. The Code not only outlines the appeal procedure to
reach

the OCSC, but also provides a stricter set of obligations for public servants, including loyalty
to

their employer.​”

Prior to the introduction of the Act on July 2, 1999, an employee's rights, duties and
obligations

were subject to vaguer obligations under common law and left him more exposed. The Court
of 6​

Appeal went one step further in Lion Laboratories v. Evans. In this case, two employees
wanted to

disclose information which showed that the breathalyzer machines which their ex-employer

manufactured were inaccurate. These machines were used by the police to measure alcohol
levels in

drivers. The Court of Appeal held that it was not necessary to find misconduct or wrongdoing
and

that the test was simply that information should be disclosed in the public interest. A public
sector

employee may have recourse against unfair treatment for having blown the whistle on his

employer's activities under the European Convention on Human Rights. Freedom of

expression is

protected under Article 10 of the Convention which states that ""everyone has the right to
freedom

of expression" while recognising that exercise of such freedom ""carries with it duties and

responsibilities".

BACKGROUND TO THE ACT

Pressure has mounted in the United Kingdom in the last few years for legislative control on

whistleblowing. Concern about the treatment of whistle-blowers has been emphasised by

Public

Concern at Work, ("PCAW") an independent consultancy and legal advice body. PCAW have

highlighted a number of cases in which scandals and calamities might have been averted had
there

been proper channels of communication through an authorised

procedure. 7​
“​The PIDA clearly focuses on the disclosure, rather than the person making the disclosure, as

evidenced by the title of the statute, and on the extensive procedural requirements for a
disclosure to

qualify as protected under the Act. Moreover, the PIDA characterizes the person making the

disclosure as a "witness" rather than a "complainant", which serves to detract from the stigma
of a

"whistleblower", and demonstrate the importance of serving the public interest by reporting

wrongdoing. The PIDA covers wrongdoing in the public and private sector, and protects
disclosures

made by the public and private sector

employees.​”

Tom Treasure (1998), “ Present System of Whistle Blowing is Unsatisfactory” ​British

6​
Medical ​ Journal​, Vol. 316, No. 7146 , pp. 1739-1740.

Michael Davis (1996), “Some Paradoxes of Whistle blowing”, ​Business & Professional
7​
Ethics ​ Journal,​ Vol. 15, No. 1 ,pp. 3-19.
Page 8
“​However, the Code deals specifically with public sector wrongdoing and disclosures. The
dual

coverage and protection of the PIDA is a strong component of the United Kingdom's
disclosure

regime. By combining jurisdiction, the PIDA sends an important message that all employees
are

equally deserving of protection from reprisal. The United Kingdom's PIDA includes
substantive and

procedural criteria for making a protected disclosure. The substantive criteria simply require
the

person making the disclosure to make their disclosure in good faith and with reasonable
belief.
Procedurally there are strict requirements for a person making the disclosure to disclose via
the

internal mechanisms of their employer, before being able to be protected from reprisal or
report to

the OCSC . The stringent internal procedural requirements may impose undue burdens on
any 8​

person considering making a disclosure and deter them from making a disclosure
altogether.​”

The PIDA, 1998 is an all comprehensive statute and it protects the rights of employees in all
the

sectors. The Act covers almost all workers in Great Britain, including those who would not
qualify

as employees under the definitions of employment rights legislation. These workers include

contractors, trainees, staff of public bodies, and professionals in the National Health Service
(NHS).

Thus, whistle-blowers in the both the public and private sectors are entitled to protection.
Among

those excluded are "the genuinely self-employed (other than the NHS), volunteers, the
intelligence

services, the army or police officers.

Two points should be noted about this legislation. First, it does not give rights to those who do
not

have an employment relationship, for example, members of the public. Second, the statute
makes no

reference to the law of defamation.

Under the Act where a third party is responsible for the Act disclosure can be made to him
otherwise internal disclosure would suffice. In certain instances the disclosure may be made
to

certain prescribed authority. This is totally contrary to the position in most American States
which

require disclosure to be made to an external agency. But it is a precondition that the

whistleblower

must believe that the allegations are substantially true. In addition to this, the whistleblower
must

meet one of three preconditions for such disclosure. These conditions

include:

(1) reasonable fear of reprisal for the disclosure to the employer or to a prescribed person
under the

Act;

(2) reasonable belief of the concealment or destruction of evidence relating to the

misconduct; and

Janet P Near , Marcia P Miceli(1985), ‘Organizational Dissidence: the case of

8​
​ ol.4, pg: 1-16.
whistle-blowing”. ​ Journal of Business Ethics V
Page 9
(3) previous disclosure of the misconduct to the employer or to a prescribed
person.

THE INDIAN POSITION

In an ever-increasing need for the Corporate Governance, the market regulators and the
corporate

world feel the desideratum for protecting the Whistle Blowers, to bring about better
transparency

and consequently improved market efficiency. The Report of the SEBI Committee on
Corporate
Governance Chaired by Mr. Narayana Murthy mooted the idea for a Whistle Blowers Policy
as a

mandatory requirement for all companies. The SEBI took cognizance of the recommendation
and

made provision for Whistle blower policy under Clause 49 (iv) of the Listing
Agreement.

Justification for
whistleblowing

“​The strongest justification for allowing the use of whistleblowing is that the people of India
have

the right to impart and receive information. The right to impart and receive information is a
species

of the right to freedom of speech and expression guaranteed by Article 19(1)(a) of the
constitution

of India . A citizen has a Fundamental Right to use the best means of imparting and receiving
9

information. The State is not only under an obligation to respect the Fundamental Rights of
the

citizens, but also equally under an obligation to ensure conditions under which the Right can
be

meaningfully and effectively be enjoyed by one and all. Freedom of speech and expression is
basic

to and indivisible from a democratic polity. The right U/A 19(1)(a) is, however, available only
to the

citizens of India and non-citizens can claim only right to know U/A 21 of the Constitution of

India.​” 10
​

Thus, the whistleblowing gets its legitimacy under the

following:
(i) Freedom of information under Article 19(1)(a),
and

(ii) Right to know under Article 21.

Freedom of information under Article

19(1)(a)

“​Article 19(1)(a) of the constitution guarantees to all citizens freedom of speech and
expression. At

the same time, Article 19(2) permits the State to make any law in so far as such law imposes

Rajput Namita, Aggarwal Vipin, Chopra Kamna (2014), “Whistle blowing a step towards
9​
better ​ governance: comparative analysis of India and US”, ​An International
Multidisciplinary Research Journal​, Vol:4 Issue:11.

Siddharth G Das, Regina Aldrin (2007), “Whistle Blowing and Competitive Advantage”,
10​
SCMS ​ Journal of Indian Management,​ Vol 4, no 2, pg70-76.
Page 10
reasonable restrictions on the exercise of the rights conferred by Article 19(1)(a) of the
constitution

in the interest of sovereignty and integrity of India, the security of the State, friendly relations
with

foreign States, public order, decency, morality, contempt of court, defamation and incitement
of

offence. Thus, a citizen has a right to receive information and that right is derived from the 11
​

concept of freedom of speech and expression comprised in Article 19(1)(a) . It must, however,
be

noted that freedoms under Article 19, including Article 19(1)(a), are available only to citizens
of

India. An alien or foreigner has no rights under this Article because he is not a citizen of India.
Thus

to confer protection upon non-citizens one has to depend upon and apply Article 21 which is

available to all persons, whether citizen or

non-citizen.​”

Right to know under Article 21

“​Article 21 enshrines right to life and personal liberty. The expressions “right to life and
personal

liberty” are compendious terms, which include within themselves variety of rights and
attributes.

Some of them are also found in Article 19 and thus have two sources at the same time. In

R.P.Limited v Indian Express Newspapers the Supreme Court read into Article 21 the right to
know.

The Supreme Court held that right to know is a necessary ingredient of participatory
democracy. In

view of transnational developments when distances are shrinking, international communities

are

coming together for cooperation in various spheres and they are moving towards global
perspective

in various fields including Human Rights, the expression liberty must receive an expanded

meaning. The expression cannot be limited to mere absence of bodily restraint. It is wide
enough to

expand to full range of rights including right to hold a particular opinion and right to sustain
and

nurture that opinion. For sustaining and nurturing that opinion it becomes necessary to
receive

information.​”

“​Article 21 confers on all persons a right to know which include a right to receive information.
The
ambit and scope of Article 21 is much wider as compared to Article 19(1)(a). Thus, the courts
are

required to expand its scope by way of judicial activism. In P.U.C.L v U.O.I the Supreme
Court

observed that Fundamental Rights themselves have no fixed contents, most of them are
empty

vessels into which each generation must pour its contents in the light of its experience. The
attempt

of the court should be to expand the reach and ambit of the Fundamental Rights by process
of

judicial interpretation. There cannot be any distinction between the Fundamental Rights 12
​

Premlata, Ankshika Agarwal (2014), “Blowing the facts- whistle blowing policy in India”,
11​
Research ​ Directions​. Vol: 1, issue: 7.

Chaurasiya, V. K.; Singh, Nandita; Dwivedi, Priyanka; Chaturvedi, Trishna (2013),

12​
“Whistleblower's ​ Protection Act 2011, India: A Critical Analysis”, ​International Journal of

Advanced Research in ​Computer Science.

Page 11
mentioned in Chapter-III of the constitution and the declaration of such rights on the basis of
the

judgments rendered by the Supreme

Court.​”

The Narayana Murthy Committee had following points to contribute as mandatory

recommendation:

a) Personnel who observe an unethical or improper practice (not necessarily a violation of

law)

should be able to approach the audit committee without necessarily informing their
supervisors.

b) Companies shall take measures to ensure that this right of access is communicated to all
employees through means of internal circulars,
etc.

c) The employment and other personnel policies of the company shall contain provisions
protecting

“whistle blowers” from unfair termination and other unfair prejudicial employment
practices.

d) Companies shall annually affirm that they have not denied any personnel access to the
audit

committee of the company (in respect of matters involving alleged misconduct) and that they
have

provided protection to “whistle blowers” from unfair termination and other unfair or prejudicial

employment practices.

e) The appointment, removal and terms of remuneration of the chief internal auditor must be
subject

to review by the Audit Committee.

f) Such affirmation shall form a part of the Board report on Corporate Governance that is
required

to be prepared and submitted together with the annual

report.

If we see the recommendations that have been provided in relation to the Audit Committee
report

then it will be evident that the Sarbens-Oxley Act has also provided the same points. In
pursuance

of these recommendations SEBI has inserted Whistleblower policy into the Clause 49 of the
Listing

Agreement. The recommendations given by the Narayan Murthy Committee have been
accepted by
SEBI and it has found form in Clause 49 of the Listing Agreement. And further the last

recommendation has been implemented in Clause 49(IVA) (iv) of the Listing Agreement. Thus
it is

mandatory for every company to see to it that these measures are effectively
implemented. 13
​

Safeguards to
Whistle-blowers

“​The existing laws contain various provisions that restrict the access to the whistleblowers
and

thereby prevent their disclosure. For instance, under section 173 (6) of Cr.P.C the police
officer can

Sonal Nagpal (2013), “ Whistle blowing mechanism a move towards better corporate
13​
governance”, ​ Global Journal of Management and Business studies,​ Vol 3, Number 8, pp
855-860.
Page 12
form an opinion that any part of the statement recorded under section 161 of the Code of a
person,

the prosecution proposes to examine as its witness, need not be disclosed to the accused if it
is not

essential in the interests of justice or is inexpedient in the public

interest.​” 14
​

“​Similarly, though section 273 of the Code requires the evidence to be taken in the presence
of the

accused, section 299 indicates that in certain exceptional circumstances an accused may be
denied

his right to cross-examine a prosecution witness in open court. The concerned person or
witness
may be the whistleblower, whose identity can be concealed by the courts in the interest of
justice.

Further, the Law Commission of India and other Commissions have also contributed
significantly

for the protection of whistleblowers. The 14th Report of the Law Commission (1958)
examined,

inter alia, the question of providing adequate facilities to witnesses attending cases in courts.
The

4th Report of the National Police Commission (1980) acknowledged the troubles undergone
by

witnesses attending proceedings in

courts.​”

“​The 154th Report of the Law Commission (1996) particularly noted: “Necessary confidence
has to

be created in the minds of the witnesses that they would be protected from the wrath of the
accused

in any eventuality.” In its 178th Report (2001), the Law Commission recommended the
insertion of

section 164A in the Cr.P.C to provide for recording of the statement of material witnesses in
the

presence of Magistrates where the offences were punishable with imprisonment of 10 years
and

more. On the basis of this recommendation, the Criminal Law (Amendment) Bill, 2003 was 15
​

introduced in the Rajya Sabha and is pending enactment. The Law Commission’s 179th
Report on

Public Interest Disclosures and the Protection of Informers, states thus: “Good-faith
whistleblowers

represent the highest ideals of public service and challenge abuses of power. They test
loyalty with

the highest moral principles but place the country above loyalties to persons, parties or

Governments”. The same also seems to be stress of the “consultation paper on witness
identity

protection and witness protection programmes” issued by the Law Commission. These
provisions

must be construed in a liberal manner by the courts to protect the

whistleblowers.​” 16
​

Srividhya.S , C. Stalin Shelly (2012), “Whistle Blowing Protection –A Watch Dog for the
14​
​ ol.1
Organisation”, ​International Journal of Social Science & Interdisciplinary Research, V
Issue 10.

Vivek Sadhale, Vikas Agarwal (2012), “Whistle blowing — are we heading in the right
15​
​ f 40​th ​National Convention of Company Secretaries pg 104-112.
direction? ​ Souvenir o

Aishwarya Padmanabhan, “Eradication of corruption and whistle blowing” National University

16​
of ​ Juridical Sciences (NUJS), Kolkata.
Page 13

CONCLUSION

“​The most common response to the problems facing whistle-blowers is to suggest better
whistle-

blower legislation. Yet it is remarkable how ineffectual such legislation is. Not only are whistle-

blower laws flawed through exemptions and in-built weaknesses, but in their implementation,
they

are rarely helpful. Indeed, it might be said that whistle-blower laws give only the appearance
of

protection, creating an illusion that is dangerous for whistle-blowers that put their trust in law
rather
than developing skills to achieve their goals more directly. Beginning in the 1990s,
whistle-blower

laws have been enacted in most Australian states and territories, though not at the
Commonwealth

level. Such laws have a longer history in the United States, while Britain's law is quite new.
The

stated purpose of these laws is to protect whistle-blowers from reprisals and more generally
to

encourage timely and responsible public disclosures to promote honesty in government. Few
of the

laws apply outside the public

sector.​”

“​A fundamental problem with whistle-blower laws is that they usually come into play only after

disclosures have been made and reprisals have begun. Another problem is that there are
many subtle

ways for employers to undermine employees without providing clear-cut evidence of reprisals.

Rumours and ostracism are two of the most common responses encountered by
whistle-blowers but

are virtually impossible to document. Petty harassment is also potent. It might mean such
minor

things as unavailability of a company car, awkward rosters, slowness in processing claims, or

requests for excessive documentation. Another problem with whistle-blower laws is that they

typically pit a lone employee against a powerful

organisation.​”

“​The Indian matrix has adopted the American situation, without adopting the rationale behind
the

American situation. In America the whistle-blower provisions could be provided because of

other
supplementary statutes present and the same holds even for UK. There they have additional
statutes

that supplement the main statute. In India these supplementary statutes have not been
properly

developed so as to act as a support to the main statute as a result of the same the
enforcement

mechanism is filed with loop holes. The laws here should be such that they should not only be

regarding the disclosure of the non-compliance of the mandatory legal requirements but also
relate

to the unlawful and unethical acts.​”

“​It is also to be noted here that the conduct of the Whistle-blower has much relevance here.
His

conduct should be such that no finger could be raised against him. The case of Dalhberg v.
Lutheran

Soc. Serv. of N.D., has succinctly summarized this point as follows: In order to determine
whether a ​Page 14
report of a violation or suspected violation of law is made in good faith, we must look not only
at

the content of the report, but also at the reporter's purpose in making the report. The central
question

is whether the reports were made for the purpose of blowing the whistle, i.e., to expose an
illegality.

It is seen that the law has to take its own course but if we have to have a better way out and
also get

the information as to the real happening behind the corporate veil then an appropriate law is
the

only recourse. But the problem will not end at this point. The important task will be
implementation

of such laws without being tampered with. A vigilant citizen can change the course of thinking
of

the masses with his spirited effort.​”

BIBLIOGRAPHY
1) Travis, Corporate Governance and the Global Social Void, 35 Vand. J. Transnat'l L. 487
(2002).

2) Abhinav Chandrachud , Protection for WhistleBlowers: Analysing the Need for Legislations
in

India , (2004) 6 SCC (J) 91.

3) Alex Y. Seita, Globalization and the Convergence of Values, 30 Cornell Int'l L.J. 429
(1997).

4) Andrew Cowan, Scarlet Letters for Corporations? Punishment by Publicity under the New

Sentencing Guidelines, 65 S. Cal. L. Rev. 2387

(1992)

5) Brain Martin, Illusion of Whistleblower Protection UTS Law Review, No. 5, 2003, pp. 119-
130

6) Christopher C. Frieden, Comment, Protecting the Government: Interests: Qui Tam Actions
Under

the False Claims Act and the Government Right to Veto Settlements of those Actions, 47
EMORY

L. J. 1041

7) Daniel Fisher, Shell Game; How Enro4 Concealed Losses, Inflated Earnings--and Hid
Secret

Deals. Are Criminal Charges Next?, Forbes, Jan. 7,

2002

8) David Hess & Thomas W. Dunfee, Fighting Corruption: A Principled Approach; The C2

Principles (Combating Corruption), 33 Cornell Int'l L.J. 593, 596

(2000)

9) Don Clark, Security Experts Are on Alert Over Wireless Hacking Technique, Wall St. J.,
Oct. 15,

2001

10) Elletta Sangrey Callahan & Terry Morehead Dworkin, The State of State Whistleblower

Protection, 38 Am. Bus. L.J. 99

(2000)

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