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Indian Laws and Policies for Whistleblower Claims

Currently in India, the following policies can be accessed for reporting government and corporate wrongdoing

Government or Public Sector Policies for Whistleblowers under Indian Law

The Whistleblower Protection Act 2014 has not been notified in India. The Act imagined a mechanism to reveal wrongdoing in government bodies, projects and offices and contemplated some protection for the whistleblowers revealing fraud corruption and government mismanagement.

Currently, A stopgap policy that has existed since 2004 continues to be in place – the Public Interest Disclosure and Protection of Informers Resolution dated 21 April 2004 issued by the then Ministry of Personnel, Public Grievances and Pensions. It empowers the central vigilance commission or central vigilance officers of each ministry or mepartment of government to act on complaints of whistleblowers but does not accept anonymous complaints. The resolution attempts to maintain the confidentiality of the complainant and empowers the central vigilance commission to issue directions if a complainant or victim needs protection. It’s unclear if and how often this power has been used.

The PIDPI complaint should be in a closed / secured envelope and should be addressed to the secretary, central vigilance commission. The envelope should clearly be inscribed with “Complaint under the Public Interest Disclosure” or “PIDPI”. The PIDPI complainant should give his/her name and address in the beginning or end of complaint or in an attached letter.

Corporate Accountability and whistleblower policies under Indian Law

The Securities and Exchange Board of India encourages complaints through its complaints redressal system (SCORES)

SEBI and the Companies Act 2013 encourage whistleblowers in general by mandating an internal policy through a “vigil mechanism” for directors and employees to report unethical behaviour or other concerns to management. The corporate regime for a vigil mechanism is mandated by Section 177 of the Companies Act and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and covers:

  1. all listed companies,
  2. companies which accept deposits from the public
  3. companies with borrowings over Rs. 50 Crores.
The mandate also extends to necessitating adequate safeguards against victimization and providing access to the Audit Committee’s chairperson in cases that require them:
  1. E.G. In a case against ICICI Bank where an employee complained of being victimized after accessing the internal whistleblower mechanism, ICICI Bank settled with SEBI for around Rs. 28 Lakh.
  2. In a different case against Sun Pharma, SEBI settled for around Rs. 56 Lakh after whistleblower complaints against the pharmaceutical company.
Since the Indian whistleblower framework largely does not have a reward mechanism neither of the settlements included any award to the whistleblowers themselves.

Beginning of a reward mechanism by SEBI in the year 2019

  • Under the SEBI (Prohibition of Insider Trading) Regulations, for any original information disclosed through a Voluntary Information Disclosure Form relating to a violation of insider trading laws, SEBI offers a reward of 10% of the money disgorged as a result of the whistleblower complaint. The maximum reward is now Rs. 10 Crore/Rs. 100 million (it was initially Rs. 1 Crore/Rs. 10 million). The regulations also have an anti-retaliation provision for protection of employees who file a voluntary disclosure.  The whistleblower (who the regulations call an informant) has an option to exclude information from the complaint that could possibly reveal their identity and can have a legal representative verify their identity and maintain confidentiality of the identity details.
  • Additionally, SEBI also offers a maximum of Rs. 20 Lakh for any original information about the assets of a defaulter that has been categorized on the “difficult to recover” list that SEBI maintains.

In November 2024 SEBI introduced guidelines to Stock Exchanges, Clearing Corporations and Depositories that requires Market Infrastructure Institutions (MII) such as stock exchanges, clearing corporations and depositories to follow the corporate governance requirements of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. According to these guidelines which come into effect on April 1, 2025, Audit Committees of MIIs should resolve whistleblower complaints within 60 days, and if they cannot take appropriate action in this time, they are mandated to escalate the complaint to the governing body of the MII. The guidelines also require MIIs to not discourage genuine whistleblowers in their effort to discourage misreporting. By April 1, 2025, all MIIs need to have their whistleblower policies published on their websites.

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