Criminal Intention: An Important Element of Corporate Liability in India

In this era of globalization, the corporate bodies have to undergo a lot of challenges ranging from different types of scams to crimes committed by both the higher authorities to the lower ones. The crime committed by the corporations depends on the power that they enjoy, the reach that they have and the can be an extraordinary too depending on the magnitude of the corporation. As discussed in the previous modules, the same questions arise here too, whether the corporations can be held guilty, as they do not have their own minds. Corporations in India for a long time were not held guilty due to the same requirement as all other states and that is of the mens rea, or the intention and hence there was no scope to punish the corporations for their criminal act. However, corporate bodies are no longer immune. The notion of corporate criminal liability in India has been characterised by the independent judiciary of the nation by their persistent scuffle to overcome the problem of dispensing criminal blame to the fictional bodies. As the globalization of each and every industry is so rapid that the boundaries between the different countries have just vanished and this has made an easy way for the corporation to the soft white collar crime in a much more sophisticated and complicated way. The telecommunication or the digital era has helped the corporations in becoming smarter while committing white-collar crimes.

Therefore, the confrontation of the criminal liability of corporations was done by the court a few decades ago for curbing the white-collar crimes. By then the western countries had gained momentum in the jurisprudential analysis of the same. The Indian judiciary classified the same in two parts. One as the crimes not requiring the criminal intent and the second being the crimes of intent.

Crimes not requiring Criminal Intent

On the similar notion as that of Western Europe, India further started believing the crimes not requiring the criminal intent. The court in the case of Ananth Bandhu v. Corporation of Calcutta stated that if there is something in definition or in context of a particular section in the statute which can prevent the application of the section on the corporation then the corporation cannot proceed against that particular section. The best-suited example of this notion is the crime of Rape. A corporation cannot commit an offence of rape. Other than this there many other provisions where a corporation cannot commit the crime physically. Hence, it can be summed up that a corporation cannot be tried for any offence where the punishment is imprisonment as it is not possible to send a corporation to prison by way of sentence. Similarly, in the case of Punjab National Bank v. A R Gonsalves, it was held that the corporation can only be tried in only in offences of a limited class of cases, and these must be the cases where the mens rea is not so crucial and must be the cases should also have some possibility to sentence fine for the corporation. Later it was held by the courts that the action on which the corporation has been charged should be contemplated in the Charter of the company as which can be performed by the corporation and also is having some connection with the statutory and legal obligations of the corporation.

Crimes of Intent

The judiciary did not take much time in identifying the doctrines of vicarious liability and the identification theory and evolved a jurisprudence to charge the corporations with the crimes of intent. The corporation or the body corporate generally acts through its Board of Directors or the Managing Directors and the authorised agents of the corporation and hence the criminal act was done by any agent having his knowledge or belief or intent or the state of mind as that of a corporation, the corporation can be held liable as the same will be treated as the knowledge or belief or intent or the state of mind of the corporation and the same was held in State of Maharashtra v. Messers Syndicate Transport Co. (P) Ltd.

The Hon’ble Supreme Court of India for the first time aggressed the issue in 1970 in the case of Aligarh Municipal Board  v. Ekka Zonga Mazdoor Union wherein it stated that a corporation is liable to be punished by imposing fine and the duty of the officers is to obey the decision and to furnish with the orders and if they do not act according to the order passed against the  corporation then the corporation can be charged with the offence of Contempt of Court and the authorities will be held liable for the same.

In this era of globalization, the corporate bodies have to undergo a lot of challenges ranging from different types of scams to crimes committed by both the higher authorities to the lower ones. The crime committed by the corporations depends on the power that they enjoy, the reach that they have and the can be an extraordinary too depending on the magnitude of the corporation. As discussed in the previous modules, the same questions arise here too, whether the corporations can be held guilty, as they do not have their own minds. Corporations in India for a long time were not held guilty due to the same requirement as all other states and that is of the mens rea, or the intention and hence there was no scope to punish the corporations for their criminal act. However, corporate bodies are no longer immune. The notion of corporate criminal liability in India has been characterised by the independent judiciary of the nation by their persistent scuffle to overcome the problem of dispensing criminal blame to the fictional bodies. As the globalization of each and every industry is so rapid that the boundaries between the different countries have just vanished and this has made an easy way for the corporation to the soft white collar crime in a much more sophisticated and complicated way. The telecommunication or the digital era has helped the corporations in becoming smarter while committing white-collar crimes.

Therefore, the confrontation of the criminal liability of corporations was done by the court a few decades ago for curbing the white-collar crimes. By then the western countries had gained momentum in the jurisprudential analysis of the same. The Indian judiciary classified the same in two parts. One as the crimes not requiring the criminal intent and the second being the crimes of intent.

Crimes not requiring Criminal Intent

On the similar notion as that of Western Europe, India further started believing the crimes not requiring the criminal intent. The court in the case of Ananth Bandhu v. Corporation of Calcutta stated that if there is something in definition or in context of a particular section in the statute which can prevent the application of the section on the corporation then the corporation cannot proceed against that particular section. The best-suited example of this notion is the crime of Rape. A corporation cannot commit an offence of rape. Other than this there many other provisions where a corporation cannot commit the crime physically. Hence, it can be summed up that a corporation cannot be tried for any offence where the punishment is imprisonment as it is not possible to send a corporation to prison by way of sentence. Similarly, in the case of Punjab National Bank v. A R Gonsalves, it was held that the corporation can only be tried in only in offences of a limited class of cases, and these must be the cases where the mens rea is not so crucial and must be the cases should also have some possibility to sentence fine for the corporation. Later it was held by the courts that the action on which the corporation has been charged should be contemplated in the Charter of the company as which can be performed by the corporation and also is having some connection with the statutory and legal obligations of the corporation.

Crimes of Intent

The judiciary did not take much time in identifying the doctrines of vicarious liability and the identification theory and evolved a jurisprudence to charge the corporations with the crimes of intent. The corporation or the body corporate generally acts through its Board of Directors or the Managing Directors and the authorised agents of the corporation and hence the criminal act was done by any agent having his knowledge or belief or intent or the state of mind as that of a corporation, the corporation can be held liable as the same will be treated as the knowledge or belief or intent or the state of mind of the corporation and the same was held in State of Maharashtra v. Messers Syndicate Transport Co. (P) Ltd.

The Hon’ble Supreme Court of India for the first time aggressed the issue in 1970 in the case of Aligarh Municipal Board  v. Ekka Zonga Mazdoor Union wherein it stated that a corporation is liable to be punished by imposing fine and the duty of the officers is to obey the decision and to furnish with the orders and if they do not act according to the order passed against the  corporation then the corporation can be charged with the offence of Contempt of Court and the authorities will be held liable for the same.