Emerging issues of corporate criminal liabili...

Emerging issues of corporate criminal liability in India

Author Name : Mr. Pallav Aneja

ABSTRACT

“A company can only act through human beings and a human being who commits an offence on account of or for the benefit of a company will be responsible for that offence himself. The importance of incorporation is that it makes the company itself liable in certain circumstances, as well as the human beings” - Glanville Williams

A crime is said to be committed by a human being. The general belief in the early sixteenth and seventeenth centuries was that corporations could not be held criminally liable. A corporation is a separate legal entity and considered a legal person but the law is in contradiction if the company without a soul and body could be held liable for the criminal act or not. A corporate body can also undertake a crime. The acts of the corporation are the acts of its officers, directors, and employees; they may commit crimes, which benefit them personally by injuring the corporation or without affecting the corporation or crimes, which benefit both themselves and the corporation. Individual agents of a corporation can engage in a wide variety of actions, they may violate economic or regulatory statutes, commit offenses involving criminal intent as well as strict liability offences and even commit offences involving personal violence, therefore a corporation can be made criminally liable for unlawful acts done by its agents when they are acting within the scope of authority, which will result in corporate criminal liability. There have been stages of evolution of Criminal liability of Corporations. The doctrines of Strict Liability & Vicarious Liability derived from law of torts are methods to obviate criminal liability of a corporation. The application of strict liability eliminating the requirement of means rea, Respondent Superior dispenses with acts reus working together leads to imposing of Corporations liability. The corporation cannot think of its own due to absence of mind creating difficulties in establishment of mens rea in such crimes. There is a concept of alter ego doctrine that the management was the corporation's “brain”. Similarly, no bodily punishment can be inflicted into it leading it to be incapable of usual punishments. It does not have a soul to be condemned or a body to be hanged. The legal framework will be discussed prevailing in India through explaining Judicial Pronouncements and showing the change in the courts approach at different prospects of the act. Accepting the connivance of corporations in crime, the principles of imposing liability have been developed in several jurisdictions by attributing acts reus and mens rea to the corporations. This doctrine of corporate criminal liability is increasingly gaining importance all over the world and is a recognized principle in India, after the landmark judgment of Standard Chartered Bank v. Directorate of Enforcement (2005)