The essence of criminal law has been said to lie in the maxim—"actus non facit reum nisi mens sit res." There can be no crime large or small, without an evil mind. It is therefore a principl…Full description
short notes on law of tortsFull description
Audit of LiabilityFull description
Full description
crimes and other wrongsFull description
Charles Sobhraj the french serial killer's true story. By Richard Neville and Julie CLarke, PAN AUSTRALIA Editions 1988, ISBN: 0-330-27144-X
Full description
Charles Sobhraj the french serial killer's true story. By Richard Neville and Julie CLarke, PAN AUSTRALIA Editions 1988, ISBN: 0-330-27144-X
CRIMINAL LAW
Deskripsi lengkap
T h e Wo r l d ’ s L a r g e s t R u b b e r Gl o v e Ma n u f a c t u r e rFull description
Review of Literature - Justifying the Lowering of the Age of Exemption From Criminal LiabilityFull description
about Occupier's LiabilityFull description
short notes on law of tortsFull description
Accounting LessonFull description
By CHLOE ̈ TAYLOR
This is my notes please give your feedback ...Full description
stay tuned for lulzxmas ;DFull description
Accounting Lesson
TOPIC: CORPORATE CRIME AND ITS CRIMINAL LIABILITY
INTRODUCTION1
Corporations Corporations are as much part of our societ as are an other socia! institution" institution" Corporations Corporations represent a #istinct an# po$erfu! force at re%iona!& nationa! an# %!o'a! !e(e!s an# the $ie!# enormou enormouss economic economic po$ers" Besi#es Besi#es %o(ernm %o(ernments ents an# %o(ernm %o(ernmenta enta!! a%encies a%encies&& it is the corpor corporati ations ons that that are are the mo more re an# an# mo more re effe effect cti(e i(e a%ents a%ents of acti action on in our socie societ t&& 'ut corporations& corporations& as $e un#erstan# to#a& to#a& ha(e not 'een same in the past" The mu!titu#e of ro!es the corporations corporations p!a in the present #a human !ife ha(e 'een necessitate# ' the #eman#s of the societ& as it )ept on *#e(e!opin%+" The #e(e!opment of the societ& at (arious points of time& has ha# a #irect inf!uence on the structure an# functions of the corporation" This ha# !e# to an e(er increasin% #eman# for the !a$ to reco%ni,e the chan%e an# suit its app!ications& accor#in%!" O(er the !ast fe$ #eca#es nature an# form of a corporate sector has %ro$n comp!e-" In !ast t$o #eca#es of ./th centur& $e sa$ %!o'a!i,ation an# pri(ati,ation of e(er tpe of 'usiness entities a!! o(er the $or!# an# this %!o'a!i,ation further pa(e# the $a for 01!o'a! 2i!!a%e3& $hich consi#era'! ma#e the chan%es in the form of 'usiness or%ani,ation" To#a o#a&& a corpor corporat ation ion is an arti artific ficia ia!! enti entit t that that the !a$ !a$ treat treatss as ha(in ha(in% % its o$n o$n !e%a! !e%a! persona!it& separate from fro m an# in#epen#ent in#ep en#ent of the persons $ho ma)e up the corporation" corporat ion" This means& for e-amp!e& that a corporation can o$n an# se!! propert& sue or 'e sue#& or commit a crimina! offence offence 'ecause4 a corporation is ma#e up of an# run ' peop!e& actin% as a%ents of the corporation" A corporatio corporation n has an e-istence separate from the shareho!#ers constitutin% it an# the cannot 'e he!# !ia'!e for the $ron%s committe# ' the corporation" The corporations are run ' natura! persons an# these peop!es actions can 'e crimina! in nature an# can sometimes e(en resu!t in %reat economica! as $e!! as human !oss to the societ& $hich is e(i#ent from coa!5%ate coa!5%ate scam in $hich CBI has re%istere# case a%ainst 6umar 6umar Bir!a& In#ia+s In#ia+s 'est5)no$n in#ustria!ists an# former f ormer coa! coa ! secretar secre tar for a!!e%e# irre%u!arities in the a!!ocation of coa! '!oc)s" It a!so put a fresh spot!i%ht on Prime minister Manmohan sin%h &$ith Para)h a!!e%ation a!!e%ation that a!!ocation $as appro(e# ' the P M an# the CBI shou!# ha(e ma#e him the 1 http://catdir.loc.gov/catdir/samples/cam031/2001025804.pdf 1
0accuse# num'er one".3 7ence& for a 'etter un#erstan#in% of the concept of corporate crimina! !ia'i!it& it is necessar to trace the meanin% of corporation an# $as in $hich corporation commit crime"
DEFINATION Section 11 of the IPC reads:
0The $or# person inc!u#es an Compan or Association or 'o# of persons& $hether incorporate# or not"3 Section 88 see)s to #efine& person is first! not e-hausti(e" It simp! #ec!ares that it inc!u#es 9a a compan or association 9' a 'o# of persons $hether incorporate# or not" Secon#! the #efinition operates un!ess the conte-t $arrants other$ise" Section ; 9<. 1enera! C!auses Act& 8=>? $hich rea#s: person sha!! inc!u#e an compan or association or 'o# of in#i(i#ua!s& $hether incorporate# or not" 2icarious !ia'i!it princip!e app!ies in case of companies a!so $ho can 'e he!# !ia'!e for acts committe# ' some natura! persons $ho are i#entifie# $ith it 'ecause in such a case the acts an# intentions of those $ho contro! the corporation are #eeme# to those of the corporation itse!f" A compan has none of features that characteri,e a !i(in% person& a min# that can ha(e )no$!e#%e or intention or 'e ne%!i%ent;
CORPORATE CRIME
Corporate crime is a tpe of $hite5co!!ar crime 1enera! meanin% of corporate crime refers to crimes committe# either ' a corporation 9i"e"& a 'usiness entit ha(in% a separate !e%a! persona!it from the natura! persons that mana%e its acti(ities& or ' in#i(i#ua!s actin% on 'eha!f of a corporation or other 'usiness entit" Some ne%ati(e 'eha(iour ' corporations ma not actua!! 'e crimina!4 !a$s (ar 'et$een @uris#ictions" or e-amp!e& some @uris#ictions a!!o$ insi#er tra#in%" E#$in Suther!an# intro#uce# the !atter concept to #escri'e crimina! acti(it ' persons of hi%h socia! status an# respecta'i!it $ho use their occupationa! position as a means to (io!ate
2 TOI 8T7 Oct ./8; aipur E#ition Pa%e 8
3 Lor# Rei# in Tesco supermar)et Lt#" 98=?8ALL ER 8.? 2
the !a$" As a su'cate%or of $hite5co!!ar crime& corporate crime has 'een #ene# in man $as" Perhaps the simp!est #enition is that offere# ' Braith$aite: corporate crime is the 0con#uct of a corporation& or of emp!oees actin% on 'eha!f of a corporation& $hich is proscri'e# an# punisha'!e ' !a$"3 Three )e i#eas are capture# in this #enitio n
irst& ' not specifin% the )in# of !a$ that proscri'es an# punishes Braith$aite accepts Suther!an#+s ar%ument that i!!e%a!it ' corporations an# their a%ents 0#iffers from the crimina! 'eha(ior of the !o$er socio5economic c!ass principa!! in the a#ministrati(e proce#ures $hich are use# in #ea!in% $ith the offen#ers"3 Thus& corporate crime not on! inc!u#es acts in (io!ation of crimina! !a$& 'ut ci(i! an# a#ministrati(e (io!ations as $e!!
Secon#& 'oth corporations 9as 0!e%a! persons3 an# their representati(es are reco%ni,e# as i!!e%a! actors" hich or $hether each is se!ecte# as a sanction tar%et $i!! #epen# on the )in# of act committe#& ru!es an# Fua!it of e(i#ence& prosecutor preference& an# offen#in% histor& amon% other factors"
ina!!& Braith$aite+s #enition species the un#er!in% moti(ation for corporate offen#in%: on the $ho!e& i!!e%a!it is not pursue# for in#i(i#ua! 'enets 'ut rather for or%ani,ationa! en#s" Thus& in or#er to maintain prots& mana%e an uncertain mar)et& !o$er compan costs& or put ari(a! out of 'usiness& corporations ma po!!ute the en(ironment& en%a%ein nancia! frau#s an# manipu!ations& - prices& create an# maintain ha,ar#ous $or) con#itions& )no$in%! pro#uce unsafe pro#ucts& an# so forth" Mana%ers+ #ecisions to commit such acts 9or to or#er or tacit! support others #oin% so ma 'e supporte# ' operationa! norms an# or%ani,ationa! su'cu!tures" WAYS IN WIC CORPORATIONS COMMIT CRIMES! On the "o"#$ation as a %ho$e:
The Supreme Court of In#ia or#ere# the %o(ernment to pa a remainin% G;.H"H mi!!ion 98H"/; 'i!!ion rupees #ue to Bhopa! %as tra%e# (ictims" The "S" 'ase# nion Car'i#e Compan& no$ o$ne# ' Do$ Chemica! Co"& pai# G=" The stor %oes 'ac) to the 8=>< nion Car'i#e acci#ent in Bhopa!& In#ia& $hich re!ease# a c!ou# of meth! isocani#es 9MIC& h#ro%en cani#e& an# other to-ins" 4 http:JJ$$$"!a$"msu"e#uJ)in%J.//J.//KPop"p#f 3
Some$here 'et$een /// peop!e #ie# at the time& an# (ictims a#(ocates estimate that in tota! o(er ./&/// ha(e #ie# as a resu!t of this !ar%est in#ustria! acci#ent e(er& $ith 8&H/&/// sufferin% continuin% in@uries an# me#ica! pro'!ems"
The cause $as e-treme corporate ma!feasance" The p!ant $as not up to minima! nion Car'i#e safet stan#ar#s 5 !ar%e Fuantities of MIC $ere un$ise! store# in a hea(i! popu!ate# area& the refri%eration unit for the MIC 9$hich is suppose# to )ept at temperatures 'e!o$ ;. $as #e!i'erate! )ept turne# off to sa(e G
On the in&estors :
One of the ma@or ha(oc that is create# in present times is 'ecause of msterious #isappearance of corporations" Of the H&H8 companies !iste# on Bom'a Stoc) e-chan%e& .?H/ ha(e (anishe#" It means that one out of t$o companies that come to the stoc) e-chan%e to raise crores of rupees from in(estors& !oot an# run a$a" Man corporations came up $ith hu%e pu'!icit stunts 'ut after raisin% mone& (anishe# into the thin air" A'out 88 mi!!ion in(estors ha(e in(este# Rs" 8/&/// crore in these .?H/ companies" e ha(e Securities E-chan%e Boar# of In#ia& Reser(e Ban) of In#ia an# Department of Companies Affairs to monitor the stoc) e-chan%e transactions 'ut none has #ocumente# the $herea'outs of these .?H/ o## companies suspen#e# from the stoc) e-chan%e" Man of the promoters an# merchant 'an)ers $ho are responsi'!e for these are roamin% scot5free" The mar)et re%u!ators an# stoc) e-chan%es are una'!e to pena!i,e them or reco(er their fun#s" The re%u!ators ha(e 'een a'!e to i#entif on! ..= of .?H/ (anishin% companies so far" The Supreme court or#ere# CBI pro'e into possi'!e crimina!it in#icate# in corporate !o''ist Niira Ra#ia+s intercepte# te!ephone ca!!s !ea# the a%enc to !oo) into some of hi%h (a!ue #ea!s !in)e# to 'i% corporate houses hea#e# ' Mu)esh Am'ani& Ani! Am'ani an# the TatasH
On their o%n Wor' Force :
Corporations a!so commit a num'er of crimes a%ainst their o$n $or)force" ith increasin% %!o'a!i,ation $or)ers fin# themse!(es 'ein% pushe# a%ainst the $a!! an# shrin)in% a(enues 5
TOI Dated
20th Oct 2013 Jaipur edition page 1
4
for re#ress" Ta)e the case of pu'!ic sector un#erta)in%s $here man irre%u!arities can 'e seen in" actories $ere opene# in some areas $here the ra$ materia! $as not a(ai!a'!e an# $here the !ocation $as correct& importe# machiner $as #efecti(e" La(ishness on the part of mana%ement $as one of the factors& $hich !e# to these institutions 'ecomin% sic)" No #ou't that the !a'ourers suffer the most in such cases" The p!i%ht of Mum'ai+s te-ti!e $or)ers is e(en $orse" Le%a! #ues ha(e not 'een pai# to . !a)hs @o'!ess mi!! $or)ers" Tra#e unions are fi%htin% $ith the rea!it of $or)er suici#es an# %ro$in% unemp!oment an# the $or)er+s fami!ies are stru%%!in% to %et o(er their miser& !ea(e a!one fi%ht for #ues from face!ess mana%ement"
On the Nat#ra$ Reso#rces:
The %o(ernment across the $or!# ha(e %i(en a free han# to corporations to e-p!oit the natura! an# communit resources& $hi!e #epri(in% the common peop!e of their ri%ht on these resources" or instance& in In#ia& Corporations at E!oor& 6o#ai)ana! an# 1u@arat ha(e not on! #estroe# the $ater an# !an# resources in these areas& 'ut a!so impo(erishe# communities ' #e%ra#in% their !i(e!ihoo# resources an# hea!th" A!! these communities suffer from #isasters simi!ar to Bhopa!" Inaccessi'!e to c!ean an# safe #rin)in% $ater $as foun# to 'e a ma@or pro'!em in a!! these areas" The companies either po!!ute the $ater resources to an e-tent $here it is no more porta'!e or o(er e-p!oit it ti!! the $ater ta'!e %oes #o$n or #r up the $e!!s" A 'efittin% e-amp!e cou!# 'e of Coco Co!a 'ott!in% p!ant in 6era!a $here the compan e-tract e-cess amount of $ater from the %roun# #ue to $hich the $ater !e(e! has %one (er !o$ an# the near' (i!!a%es are sufferin% from scarcit of $ater" In this connection it is pertinent to mention a!!ocation of coa! '!oc)s in $hich #ecision $as re(erse# after a meetin% 'et$een coa! secretar P C Para)h an# 6umar Man%a!am Bir!a & as a!!e%e# in IR re%istere# ' CBI"It is important to note that most of the #ama%es cause# to the en(ironment is irre(ersi'!e"
Cor"orations in the "o$itica$ en&iron(ent:
The con(icte# corporations are a!so in(o!(e# into #irt %ame of po!itics" Corporate Crime Reporter& a "S" 'ase# !e%a! ne$s!etter pu'!ishe# a report in u! .//; tit!e# as *Dirt Mone: Corporate Crimina! Donations to the T$o Ma@or Parties"+ This report %re$ out of the Fuestion that ho$ much mone are common crimina! corporations #umpin% into the Repu'!ican an# Democratic parties in "S"
5
The report foun# that ;8 corporate crimina!s %a(e more than G= mi!!ion to the Democratic an# Repu'!ican parties #urin% the .//. e!ection cc!e& $hich runs from anuar 8& .//8 to Decem'er ;8& .//." These corporate crimina!s %a(e G?". mi!!ion to Repu'!icans an# G."8 mi!!ion to Democrats" Man of these corporate crimina!s are !ar%e& mu!tinationa! corporations& $ith 'i!!ions of #o!!ars in assets" To %et a sense of this& !ets !oo) at the top t$o corporate crimina! #onors to the Repu'!ican an# Democratic parties" Archer Danie!s Mi#!an# 9ADM tops the !ist" ADM p!e# %ui!t in 8== to one of the !ar%est antitrust crimes e(er" The compan pai# a G8// mi!!ion crimina! fine 55 at the time& the !ar%est crimina! antitrust fine e(er" Same is the case in In#ia" These corporate crimina!s %i(e hu%e sums of mone to the po!itica! parties in return of fa(ours from these parties" ho suffers the most is the common man inc!u#in% the shareho!#ers an# $or)ers"
TEORIES OF CORPORATE CRIMINA) )IA*I)ITY +
•
Theor of 2icarious Lia'i!it The #octrine of (icarious !ia'i!it reco%ni,es that a person ma 'e 'oun# to ans$er for the acts of another" Simi!ar! in the case of corporations& the compan ma 'e !ia'!e for the acts of its emp!oees& a%ents& or an person for $hom it is responsi'!e" The tra#itiona! theor of (icarious !ia'i!it ho!#s the master !ia'!e for the acts of the ser(ant in the course of the master+s 'usiness $ithout proof of an persona! fau!t on the part of the master"
•
I#entification theor5 In this theor& the corporations are he!# crimina!! !ia'!e for true crimes an# re%u!ator offences" This theor reco%ni,es that the acts an# state of min# of certain senior officers in a corporation are the #irectin% min#s of the corporation an# thus #eeme# to 'e the acts an# state of min# of the corporation itse!f" The corporation is consi#ere# to 'e #irect! !ia'!e un#er this theor"
•
A%%re%ation Theor5 n#er the a%%re%ation theor& the corporation a%%re%ates the composite )no$!e#%e of #ifferent officers in or#er to #etermine !ia'i!it" The compan a%%re%ates a!! the acts an# menta! e!ements of the important or re!e(ant persons $ithin the compan to esta'!ish $hether in toto the $ou!# amount to a crime if the ha# a!! 'een committe# ' one person"8>/ Accor#in% to Ce!ia e!!s& a%%re%ation of emp!oees+ 6 http:JJpapers"ssrn"comJso!;Jpapers"cfma'stractKi#..=/>?> 6
)no$!e#%e means that corporate cu!pa'i!it #oes not ha(e to 'e contin%ent on one in#i(i#ua! emp!oee+s satisfin% the re!e(ant cu!pa'i!it criterion?
CRIMINA) )IA*I)ITY OF CORPORATE
7istor of Corporations !ia'i!it
In 7a!s'ur+s La$s of En%!an# $hich !as #o$n" 0In %enera!& a corporation is in the same position in re!ation to crimina! !ia'i!it as a natura! person an# ma 'e con(icte# in common !a$ for statutor offences inc!u#in% those reFuirin% Mens Rea" There are& ho$e(er& crimes $hich a corporation is incapa'!e of committin% or of $hich a corporation cannot 'e foun# %ui!t as a principa!4 nor can a corporation 'e con(icte# of a crime for $hich #eath or imprisonment is the on! punishment"3 This (ie$ has 'een a#opte# in (arious In#ian cases"> 6enn !ies #o$n: Corporations former! !a outsi#e the am'it of crimina! !a$ #ue to technica! ru!es& these e-pecte# prisoners to stan# at their 'ar& an# #i# not a!!o$ appearance ' attorne" A corporation cou!# not ha(e a %ui!t $i!! an# e(en if ' !e%a! fiction& a $i!! is create# it must 'e such as to co(er those acti(ities $hich can 'e consistent! ascri'e# to the fictitious $i!! thus create# $ith the purposes $hich it $as create# to accomp!ish" The 7ouse of Lor#s ha(e he!# that& a compan $i!! 'e !ia'!e if the action of the #efau!tin% person is the (er action of the compan itse!f"= ith the increasin% in(o!(ement of corporations in the #ai! !ife of the peop!e it $as consi#ere# important that the immunit a(ai!a'!e to the corporations shou!# 'e ta)en a$a as it hin#ere# the interests of the peop!e& thus an inno(ation $as intro#uce# ' #ra$in% a #istinction 'et$een misfeasance an# non5feasance & on the %roun# that& $hi!st in the case of a crimina! misfeasance the ser(ant or a%ent $ho actua!! #i# the crimina! act cou!# a!$as 'e himse!f in#icte#& no such in#ictment $ou!# 'e a(ai!a'!e in the case of non5feasance4 for the omission $ou!# not 'e imputa'!e to an in#i(i#ua! a%ent 'ut so!e! to the corporation itse!f" 7ence& in 8>
8 Anath Bandhu vs Calcuta Corporation 8=H<98 Ca!
a%ainst a corporation in R. v. Birmingham !loucester Ry. Co."# soon after$ar#s& in the case of R. v. The !reat $orth o% &ngland Rail'ay Co"88an in#ictment $as a!!o$e# for misfeasance& that of actua!! o'structin% a hi%h$a" The princip!e has o'taine# !e%is!ati(e appro(a! ' Interpretation Act& 8>>=& $hich pro(i#es that in the construction of e(er statutor enactment re!atin% to an offence& the e-pression *person+ sha!!& un!ess a contrar intention appears& inc!u#e a 'o# corporate
Cor"orate cri(ina$ $ia,i$it- India
Corporate crimina! !ia'i!it has 'een an important issue on a !e%a! a%en#a for a !on% time" Corporations p!a a si%nificant ro!e not on! in creatin% an# mana%in% 'usiness 'ut a!so in common !i(es of most peop!e" That is $h most mo#ern crimina! !a$ sstems foresee the possi'i!it to ho!# the corporation crimina!! !ia'!e for the perpetration of a crimina! offence" The #octrine of corporate crimina! !ia'i!it turne# from its infanc to a!most a pre(ai!in% ru!e" But& 'ecause a corporation is not a natura! person an# cannot 'e su'@ect to one of the most important sentencin% options& name!& imprisonment& it reFuires specia! consi#eration in an inFuir into sentencin% !a$" Punishin% a corporation un#ermines the theoretica! foun#ations of crimina! !a$& $hich presupposes that crimes in(o!(e an act an# a cu!pa'!e menta! state" Corporate crimina! !ia'i!it or corporate crime is (er #ifficu!t to #efine 'ecause this phrase in present #a scenario co(ers $i#e ran%e of offences" 7o$e(er for un#erstan#in% purpose it can 'e #efine# as i!!e%a! act of omission or commission& punisha'!e ' crimina! sanction committe# ' in#i(i#ua! or %roup of in#i(i#ua! in course of their occupation" It can 'e e(en #efine# as socia!! in@urious acts committe# in course of occupations ' peop!es $ho are mana%in% the affairs of the compan to further its 'usiness interest" Corporate crimina!it a!so represents a )in# of instrumenta!ities throu%h $hich the trust of the peop!e continues to 'e 'etrae# ' persons in positions of responsi'i!it& authorit an# po$er in the 'usiness sector" Corporate crime has 'een #efine# as 0the con#uct of a corporation or of emp!oees actin% on 'eha!f of a corporation& $hich is proscri'e# an# punisha'!e ' !a$3" In this sense& 0Corporate crimina! Lia'i!it3 refers to the imposition of crimina! !ia'i!it on either the corporation or its emp!oees an# a%ents" The !atter is a!so referre# to as $hite5co!!ar crime" 10 8>< 9= B ;8H 8
In the a'o(e conte-t it $i!! 'e proper to mention recent !e%is!ation in $hich corporation has 'een ma#e responsi'!e for offences:5
The NDPS Act.1/0 SECTION 203 Offences ,- co("anies3
98 here an offence un#er Chapter I2 has 'een committe# ' a compan& e(er person& $ho& at the time the offence $as committe# $as in char%e of& an# $as responsi'!e to& the compan for the con#uct of the 'usiness of the compan as $e!! as the compan& sha!! 'e #eeme# to 'e %ui!t of the offence an# sha!! 'e !ia'!e to 'e procee#e# a%ainst an# punishe# accor#in%!:
Pro(i#e# that nothin% containe# in this su'5section sha!! ren#er an such person !ia'!e to an punishment if he pro(es that the offence $as committe# $ithout his )no$!e#%e or that he ha# e-ercise# a!! #ue #i!i%ence to pre(ent the commission of such offence"
9. Not$ithstan#in% anthin% containe# in su'5section 98& $here an offence un#er Chapter I2 has 'een committe# ' a compan an# it is pro(e# that the offence has 'een committe# $ith the consent or conni(ance of& or is attri'uta'!e to an ne%!ect on the part of& an #irector& mana%er& secretar or other officer of the compan& such #irector& mana%er& secretar or other officer sha!! 'e #eeme# to 'e %ui!t of that offence an# sha!! 'e !ia'!e to 'e procee#e# a%ainst an# punishe# accor#in%!"
E4"$anation35For the "#r"oses of this section.5
9a QcompanQ means an 'o# corporate an# inc!u#es a firm or other association of in#i(i#ua!s4 an# 9' Q#irectorQ& in re!ation to a firm& means a partner in the firm"
The Trans"$antation of h#(an Or6an Act. 1//!
Section .8" Offences ' companies 98" here an offence& punisha'!e un#er this Act& has 'een committe# ' a compan& e(er person $ho& at the time the offence $as committe# $as 9
in char%e of& an# $as responsi'!e to the compan for the con#uct of the 'usiness of the compan& as $e!! as the compan& sha!! 'e #eeme# to 'e %ui!t of the offence an# sha!! 'e !ia'!e to 'e procee#e# a%ainst an# punishe# accor#in%!: Pro(i#e# that nothin% containe# in this su'5section sha!! ren#er an such person !ia'!e to an punishment& if he pro(es that the offence $as committe# $ithout his )no$!e#%e or that he ha# e-ercise# a!! #ue #i!i%ence to pre(ent the commission of such offence"
9." Not$ithstan#in% anthin% containe# in su'5section 98& $here an offence punisha'!e un#er this Act has 'een committe# ' a compan an# it is pro(e# that the offence has 'een committe# $ith the consent or conni(ance of& or is attri'uta'!e to an ne%!ect on the part of& an #irector& mana%er& secretar or other officer of the compan& such #irector& mana%er& secretar or other officer sha!! a!so 'e #eeme# to 'e %ui!t of that offence an# sha!! 'e !ia'!e to 'e procee#e# a%ainst an# punishe# accor#in%!" E-p!anation: or the purposes of this section:
9a 0compan3 means an 'o# corporate an# inc!u#es a firm or other a association of in#i(i#ua!s4 an# 9' 0#irector3& in re!ation to a firm& means a partner in the firm"
Food and Safet- Standard Act. 788+
" Offences ' companies" 9! here an offence un#er this Act $hich has 'een committe# ' a compan& e(er person $ho at the time the offence $as committe# $as in char%e of& an# $as responsi'!e to& the compan for the con#uct of the 'usiness of the compan& as $e!! as the compan& sha!! 'e #eeme# to 'e %ui!t of the offence an# sha!! 'e !ia'!e to 'e procee#e# a%ainst an# punishe# accor#in%!:
Pro(i#e# that $here a compan has #ifferent esta'!ishments or 'ranches or #ifferent units in an esta'!ishment or 'ranch& the concerne# 7ea# or the person in5char%e of such esta'!ishment& 'ranch& unit nominate# ' the compan as responsi'!e for foo# safet sha!! 'e !ia'!e for contra(ention in respect of such esta'!ishment& 'ranch or unit: Pro(i#e# further that nothin% containe# in this su'5section sha!! ren#er an such person !ia'!e to an punishment pro(i#e# in this Act& if he pro(es that the offence $as committe# $ithout his )no$!e#%e or that he e-ercise# a!! #ue #i!i%ence to pre(ent the commission of such offence"
10
9. Not$ithstan#in% anthin% containe# in su'5section 98& $here an offence un#er this Act has 'een committe# ' a compan an# it is pro(e# that the offence has 'een committe# $ith the consent or conni(ance of or is attri'uta'!e to an ne%!ect on the part of& an #irector& mana%er& secretar or other officer of the compan& such #irector& mana%er& secretar or other officer sha!! a!so 'e #eeme# to 'e %ui!t of that offence an# sha!! 'e !ia'!e to 'e procee#e# a%ainst an# punishe# accor#in%!"
E4"$anation
"or the purpose of this section&
9a 0compan3 means an'o# corporate an# inc!u#es a firm or other association of in#i(i#ua!s4 an# 9' 0#irector3 in re!ation to a firm& means a partner in the firm"
P C Act A(end(ent *i$$ 7812
Section =98 A commercia! or%anisation sha!! 'e %ui!t of an offence an# sha!! 'e punisha'!e $ith fine& if an person associate# $ith the commercia! or%anisation offers& promises or %i(es a financia! or other a#(anta%e to a pu'!ic ser(ant inten#in%
9a to o'tain or retain 'usiness for such commercia! or%anisation4 an#
9' to o'tain or retain an a#(anta%e in the con#uct of 'usiness for such commercia! or%anisation: Pro(i#e# that it sha!! 'e a #efence for the commercia! or%anisation to pro(e that it ha# in p!ace a#eFuate proce#ures #esi%ne# to pre(ent persons associate# $ith it from un#erta)in% such con#uct"
9. or the purposes of this section& a person offers& promises or %i(es a financia! or other a#(anta%e to a pu'!ic ser(ant if& an# on! if& such person is& or $ou!# 'e& %ui!t of an offence un#er section >& $hether or not the person has 'een prosecute# for such an offence"
9; or the purposes of section > an# this section&
9a Qcommercia! or%nisationQ means 11
9i a 'o# $hich is incorporate# in In#ia an# $hich carries on a 'usiness& $hether in In#ia or outsi#e In#ia4
9ii an other 'o# $hich is incorporate# outsi#e In#ia an# $hich carries on a 'usiness& or part of a 'usiness& in an part of In#ia4
9iii a partnership firm or an association of persons forme# in In#ia an# $hich carries on a 'usiness 9$hether in In#ia or outsi#e In#ia4 or
9i( an other partnership or association of persons $hich is forme# outsi#e In#ia an# $hich carries on a 'usiness& or part of a 'usiness& in an part of In#ia4
9' Q'usinessQ inc!u#es a tra#e or profession or pro(i#in% ser(ice inc!u#in% charita'!e ser(ice4
9c a person is sai# to 'e associate# $ith the commercia! or%anisation if& #isre%ar#in% an offer& promise or %i(in% a financia! or other a#(anta%e $hich constitutes offence un#er su'5 section 98& such person is a person $ho performs ser(ices for or on 'eha!f of the commercia! or%anisation"
E4"$anation
8"The capacit in $hich the person performs ser(ices for or on'eha!f of the commercia! or%anisation sha!! not matter irrespecti(e of $hether such person is emp!oee or a%ent or su'si#iar of such commercia! or%anisation"
E4"$anation
."hether or not the person is a person $ho performs ser(ices for or on 'eha!f of the commercia! or%anisation is to 'e #etermine# ' reference to a!! the re!e(ant circumstances an# not mere! ' reference to the nature of the re!ationship 'et$een such person an# the commercia! or%anisation"
E4"$anation
12
;"If the person is an emp!oee of the commercia! or%anisation& it sha!! 'e presume# un!ess the contrar is pro(e# that such person is a person $ho performs ser(ices for or on 'eha!f of the commercia! or%anisation"
9< Not$ithstan#in% anthin% containe# in the Co#e of Crimina! Proce#ure&8=?;& the offence un#er section > an# this section sha!! 'e co%ni,a'!e"
Section8/" 98 here a commercia! or%anisation has 'een %ui!t of an offence un#er section =& e(er person $ho at the time the offence $as committe# $as in char%e of& an# $as responsi'!e to& the commercia! or%anisation for the con#uct of the 'usiness of the commercia! or%anisation sha!! 'e #eeme# to 'e %ui!t of the offence an# sha!! 'e punisha'!e $ith imprisonment $hich sha!! not 'e !ess than three ears 'ut $hich ma e-ten# to se(en ears an# sha!! a!so 'e !ia'!e to fine:
section 28 of the code of cri(ina$ "roced#re pro(i#es that $hen a corporation is an
accuse# person& or $hen it is one of the accuse# persons& in an inFuir or tria!& it ma appoint a representati(e for the purpose of the inFuir or the tria!" Such an appointment nee# not 'e un#er the sea! of the corporation"hen such a representati(e appears& an reFuirement of the Co#e that anthin% is to 'e #one in the presence of the accuse# or anthin% is to 'e rea# or e-p!aine# to the accuse#& is to 'e construe# to refer to the representati(e" Simi!ar!& an reFuirement that the accuse# shou!# 'e e-amine# is to 'e construe# as a reFuirement that such a representati(e shou!# 'e e-amine#"
It is further pro(i#e# that $hen a statement in $ritin% purportin% to 'e si%ne# ' the Mana%in% Director of the corporation or ' an person ha(in% the mana%ement of its affairs& to the effect that the person name# in that statement has 'een appointe# as the representati(e of the corporation for the purpose of S" ;/H& is fi!e# 'efore the Court& the Court must presume that such a person has 'een so nominate#& un!ess& of course& the contrar is pro(e#"
If an Fuestion arises as to $hether an person appearin% 'efore the Court as the representati(e of a corporation is or is not& in fact& such a representati(e& this Fuestion is a!so to 'e #etermine# ' the Court itse!f"
13
or the purpose of S" ;/H& the term 0corporation3 means an incorporate# compan& or an other 'o# corporate& an# inc!u#es a societ re%istere# un#er the Societies Re%istration Act& 8>/"
n#er Section ;/H of Cr" PC a Compan can nominate an in#i(i#ua! to represent it in Court in a case $here the Compan is accuse#" Since this representati(e is not persona!! !ia'!e& no punishment can 'e persona!! impose# upon him" The on! punishment $hich can 'e impose# upon con(iction is monetar fine 'ecause the compan not 'ein% a natura! person can not 'e imprisone#" Since the compan cannot 'e arreste# an# the pro(isions of 'ai! #o not app! to a Compan"
The #e(e!opment of the !a$ re!atin% to corporate crimina! !ia'i!it in In#ia is not on! simi!ar to that in En%!ish !a$& 'ut a!so %reat! inf!uence# ' the En%!ish La$" At one point of time& *corporations+ $ere (ie$e# as a con(enient shie!# to e(a#e !ia'i!it" 7o$e(er& un#er our present pena! structure& for an offence ' the corporation& 'oth the corporation an# its officer can 'e ma#e !ia'!e" The !a$ on corporate crimina! !ia'i!it is ho$e(er& not confine# to the %enera! crimina! !a$ in the pena! co#e 'ut it is& in fact& scattere# o(er a p!ethora of statutes $ith specific pro(isions for the same" The nee# for proper !a$ re!atin% to corporate crimina! !ia'i!it in a !e%a! sstem& specia!! in the #e(e!opin% countries !i)e In#ia $as o'ser(e# ' the Supreme Court in the fo!!o$in% terms:
There is no contro(ers $hen fine is on! punishment %i(en un#er an statute" There are a!so no !ies $hen statute entrusts the court $ith #iscretion to inf!ict fine or imprisonment& as in this case court sha!! inf!ict on! fine on compan" Because a compan 'ein% a uristic person cannot o'(ious! 'e sentence# to imprisonment as cannot suffer imprisonment" u#icia! contro(ers !ies in that situation $hen statute prescri'es man#ator imprisonment $ith fine as a punishment for an offence" In (unicipal Corporation o% )elhi vs. *.B. Bolting Company +,- Ltd. "& the court $as confronte# $ith a (er interestin% Fuestion: $hether a compan can 'e a$ar#e# a punishment of fine $hen the man#ator punishment is 'oth imprisonment an# fine" The compan ha# 'een foun# %ui!t of committin% an offence un#er Pre(ention of oo#
12 8=?H Cr"L" " 88<> 14
A#u!teration Act& 8=H<" The Court he!# the compan %ui!t of the offence un#er the sai# act& #ec!are# that it cou!# 'e punishe# $ith fine on!8;" In .//; Supreme Court in Assistant Commissioner Assessment0ll Banglore Ors. v. 1elliappa Te2tiles Ltd Anr."3 Too) the (ie$ that since an artificia! person !i)e a compan
cou!# not 'e phsica!! punishe# to a term of imprisonment& such a section& $hich ma)es it man#ator to impose minimum term of imprisonment& cannot app! to the case of artificia! person" The ma@orit $as of the (ie$ that the !e%is!ati(e man#ate is to prohi'it the courts from #e(iatin% from the minimum man#ator punishment prescri'e# ' the Statute an# that $hi!e interpretin% a pena! statute& if more than one (ie$ is possi'!e& the court is o'!i%e# to !ean in fa(our of the construction $hich e-empts a citi,en from pena!t than the one $hich imposes the pena!t" In this case B.$. Sri4rishna and !.,. (athur "5 he!# that a compan can 'e attri'ute# $ith mens rea on the 'asis that those $ho $or) or are $or)in% for it ha(e committe# a crime an# can 'e con(icte# in a crimina! case& the @u#%es he!# that the corporations are !ia'!e e(en $here the offence reFuires a crimina! intent" The other Fuestion raise# in this case $as& 0 $hether a compan is !ia'!e for punishment of fine if the pro(ision of !a$ contemp!ates punishment ' $a of imprisonment on! or a minimum perio# of punishment ' imprisonment p!us fine $hether fine a!one can 'e impose#3& to this Fuestion Mathur "& $as of the (ie$ that the courts $ou!# 'e shir)in% their responsi'i!it of impartin% @ustice ' ho!#in% that prosecution of a compan is unsustaina'!e mere! on the %roun# that 'ein% a @uristic person it cannot 'e sent to @ai! to un#er%o the sentence& 7o$e(er& Supreme Court in .//H in Stan#ar# Charted Ban4 v. )irectorate O% &n%orcement "6 in ma@orit #ecision of ;:. e-press! o(erru!e# the 2e!!iapa Te-ti!es case on
this issue" 6" Ba!)rishanan " in ma@orit opinion he!#:QThere is no #ispute that a compan is !ia'!e to 'e prosecute# an# punishe# for crimina! Offences""" the %enera!! accepte# mo#ern ru!e is that e-cept for such crimes as a corporation is he!# incapa'!e of committin% ' reason of the fact that the in(o!(e persona! ma!icious the crimina! act is committe# act is committe# 13 Corporation crimina! !ia'i!it Rethin)in% B 6 A pan#e 14 .//; 988 SCC
throu%h its a%ent"Q The court a!so consi#ere# the proposition that a compan cou!# a(oi# crimina! prosecution in cases $here custo#ia! sentence is man#ator an# too) the (ie$ that: As regards company the court can al'ays impose a sentence o% %ine and the sentence o% imprisonment can 7e ignored as it is impossi7le to 7e carried out in respect o% a company. This appears to 7e the intention o% the legislature and 'e %ined no di%%iculty in construing the statute in such a 'ay. 8e do not thin4 that there is 7lan4et immunity %or any company %rom any prosecution %or serious o%%ences merely 7ecause the prosecution 'ould ultimately entail a sentence o% mandatory imprisonment.9 The court opine# that there is no immunit to
companies from prosecution mere! 'ecause the prosecution is in respect of offences for $hich the punishment prescri'e# is man#ator imprisonment& an# it o(erru!e# the (ie$s e-presse# ' the ma@orit in Ast Commr v 1elliappa Te2tiles Ltd.": There is no #ispute that compan is !ia'!e to 'e prosecute# an# punishe# for crimina! offences" A!thou%h there are ear!ier authorities to the fact that the corporation can not 'e su'@ect to prosecution a!thou%h the crimina! act ma 'e committe# throu%h its a%ent" There is no immunit to the companies from prosecution mere! 'ecause the prosecution is in respect of offences for $hich punishment is man#ator imprisonment an# fine8>" After the #ecision of the Standard chartered 7an4 case& the courts $ere %enera!! of the (ie$ that the companies $on+t 'e
e-empte# from prosecution mere! 'ecause the prosecution is in respect of offences for $hich punishment prescri'e# is a man#ator imprisonment"
In Iridium India Telecom Ltd. v. (otorola Incorporated and Ors "; the 7on+'!e Supreme court he!# that a corporation is (irtua!! in the same position as an in#i(i#ua! an# ma 'e con(icte# un#er common !a$ as $e!! as statutor offences inc!u#in% those reFuirin% mens rea" The crimina! !ia'i!it of a corporation $ou!# arise $hen an offence is committe# in re!ation to the 'usiness of the corporation ' a person or 'o# of persons in contro! of its affairs" In such circumstances& it $ou!# 'e necessar to ascertain that the #e%ree an# contro! of the person or 'o# of persons is so intense that a corporation ma 'e sai# to thin) an# act throu%h the person or the 'o# of persons" In this case& it $as a!so he!# that the corporations
17 .//< 9< SCC H/ 18 Aneeta 7a#a (Js MJs"1o#father Tra(e!s Tour Lt# 19 AIR ./88 SC ./ 16
can no !on%er c!aim immunit from crimina! prosecution on the %roun#s that the are incapa'!e of possessin% the necessar mens rea for the commission of crimina! offences"
In CBI v. (/s Blue0S4y Tie0up Ltd and Ors # an appea! arose from crimina! app!ication $hich $as Fuashe# ' the Ca!cutta 7i%h Court" The Appe!!ant fi!e# crimina! app!ications a%ainst the respon#ents for committin% crimina! offences un#er the pro(isions of the In#ian Pena! Co#e an# un#er Section 8;9. rea# $ith 8;989c an# 9# of the Pre(ention of Corruption Act& 8=>>" Pursuant to that& the Respon#ents fi!e# app!ications un#er Section <>. of the Crimina! Proce#ure Co#e for Fuashin% of the sai# procee#in%s" The Ca!cutta 7C Fuashe# the procee#in%s a%ainst the Respon#ent No" 8 on the fa!se premise that the compan 'ein% a 'o# corporate cannot 'e prosecute#& 'ut the Supreme Court he!# that the companies are !ia'!e to 'e prosecute# for crimina! offences an# fines ma 'e impose# on the companies"
The crimina! intent of the *a!ter e%o+ of the compan or corporate 'o#& i"e" the person or %roup of peop!e that %ui#e the 'usiness of the compan $ou!# 'e impute# to the corporation" It is no$ an esta'!ishe# !e%a! position in In#ia that a corporation can 'e con(icte# of offences that reFuire possession of a crimina! intent& an# that corporation cannot escape !ia'i!it for a crimina! offence& mere! 'ecause the punishment prescri'e# is *imprisonment an# fine+ So(e others cases re$ate to cor"orate cri(e
In#epen#ent In#ia+s first scam $as of 8=<> eep Scan#a!" The Cc!e Import Scam $as reporte# in 8=H8" the Defense Scam startin% from Bofors scam.8 8==/+s $itnesse# innumera'!e scam in(o!(in% crores of rupees such as Me#ica! EFuipment Scam 9H/// crores" aFf Scam 98// crores o##er Scam 98/// crores Su)hram Te!ecom scan#!e 98H// crores.. .8St centur corruption scams ma#e In#ia to fee! ashame# #ue to (arious me%a scam inc!u#in% the recent . 1 spectrum scam an# coa! scam " In recent reports of Transparenc Internationa!& In#ia+s ima%e on tac)!in% corruption has not impro(e# $ith Transparenc Internationa!s Corruption Perception In#e- 9CPI p!acin% it at =
this ear an# hence this cannot 'e compare# to !ast ears ran)in%".; Coa!5%ate scam in $hich CBI has re%istere# case a%ainst 6umar Man%a!am Bir!a& In#ia+s 'est5)no$n in#ustria!ists an# former coa! secretar for a!!e%e# irre%u!arities in the a!!ocation of coa! '!oc)s" It a!so put a fresh spot!i%ht on Prime minister Manmohan sin%h &$ith Para)h a!!e%ation that a!!ocation $as appro(e# ' the P M an# the CBI shou!# ha(e ma#e him the 0accuse# num'er one".<
CONC)USION7
Se(era! countries $ere& an# some sti!! are refusin% to accept the concept of corporate crimina! !ia'i!it #ue to #octrina!& po!itica!& an# historica! reasons" Out of those former! refusin% to accept this concept& some starte# to s!o$! chan%e their (ie$s" h no$ hat has chan%e# The rea!ities of our times ha(e 'een chan%in% so much that !e%is!atures ha(e rea!i,e# that #octrina! issues are !ess important than the pre(ention an# appropriate punishment of !ar%e5sca!e $hite5co!!ar crimes& mone5!aun#erin%& i!!e%a! arms sa!es& en(ironmenta! harm& pro#uct !ia'i!it& an# man others" Some of the countries that ha(e ne$! intro#uce# the corporate crimina! !ia'i!it in their !e%a! sstems pro(i#e for restricti(e sstems of en%a%in% !ia'i!it an# punishin% crimina! acti(ities of corporations" That mi%ht 'e 'ecause the are apprehensi(e of rapi# an# e-treme chan%es in a short perio# of time" Or ma'e the rea!ities of their societies are not sufficient! pressurin%4 the historica!& socia!& economic& an# po!itica! rea!ties #iffer from countr to countr& an# these #ifferences ha(e a stron% inf!uence on the !e%a! sstems" A!so& the inf!uence of the interests of po$erfu! corporations shou!# not 'e i%nore#" 7opefu!!& a!! the !e%a! sstems $i!! achie(e uniformit re%ar#in% this issue" A!thou%h the sstem #e(e!ope# in nite# States is present! consi#ere# the most a#(ance# in the $or!#& the American mo#e! has a fe$ #ra$'ac)s that cou!# pro'a'! 'e H8 e!iminate# ' usin% e!ements from other mo#e!s or ' creatin% ne$ so!utions" The American sstem+s most important #isa#(anta%es are the si%nificant spi!!5o(er effects on innocent emp!oees an# shareho!#ers& the possi'!e o(er5#eterrin% effect& an# the hi%h costs of imp!ementin% corporate
crimina! !ia'i!it" 7o$e(er&
its
a#(anta%es out$ei%h its
#isa#(anta%es" The American mo#e! seems to 'etter ref!ect the actua! #e(e!opments of corporate structure an#& thus& it is 'etter suite# to punish corporate crime" The retri'uti(e an# 23 TOI H"8."8. 24 TOI Date# 8th Oct &./8; 25 http://www.law.ms.ed/!i"g/2006/2006#$op.pdf 18
reha'i!itati(e effects of crimina! punishment are a!most perfect! ref!ecte# ' the American mo#e!" Moreo(er& this sstem is c!ear& pre#icta'!e& consistent $ith the princip!es of crimina! !a$& an# fair" It can safe! 'e conc!u#e# that !a$s re!atin% to corporate crimina! !ia'i!it in In#ia are (ast! insufficient" The !e%is!ature nee#s to 'e acti(e in this re%ar# an# form certain concrete !a$s $hich $ou!# ensure that the corporations #o not %o unpunishe# an# a 'etter socia! or#er is esta'!ishe#" Certain Pro(isions re!atin% to proce#ura! !a$ a!so nee# to 'e create# an# mo#ifie# so that the corporations can 'e a#eFuate! #ea!t $ith" The Supreme Court in Iri#ium appears to ha(e crsta!!i,e# the !a$ an# further confirme# ' Aneet 7a#a+s case" it !as emphasis on the theor throu%h $hich the intention of the #irectin% min# an# $i!! of a compan is attri'ute# to the compan& an# confirms that a corporation can 'e he!# !ia'!e for crimes of intent 9i"e"& offences in(o!(in% mens rea"" The @u#%ments further c!arifies that a compan is not immune from an prosecution for crimina! offences for $hich a sentence of man#ator imprisonment its prescri'e#& as the sentence can impose# in terms of pena!t an# fine"
