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A Case Analysis On Corporate Criminal Liability

4662 words - 19 pages


RNRL- Relinace natural resources
IPC- Indian Penal Code
UOI- Union of India
All ER - All England Law Reports (United Kingdom)
CriLJ – Criminal Law Journal

Table of cases
1. Lord Reid in Tesco Supermarkets Ltd. v. Natrass [1971] All ER 127
2. Zee Telefilms Ltd. v. Sahara India Co. Corporation Ltd., (2001) 3 Recent Criminal Reports 292.
A. K. Khosla v. S. Venkatesan (1992) Cr.L.J. 1448
3. KalpanathRai v State (Through CBI), (1997) 8 SCC 732
4. State of Maharashtra v. Mayer Hans George,A.I.R. 1965 S.C. 722
5. Nathulal v. State of M.P., A.I.R. 1966 S.C. 43
6. MV Javali v. ...view middle of the document...

Section 3(42) of General Clauses Act, 1897 defines person as:
“Person shall include any company or association or body of individuals, whether incorporated or not”. Even person is not specifically defined, it is necessarily includes a corporation. It is usually construed to include a corporation so as to bring it within the prohibition of the statutes and subject it to punishment. Various kinds of punishments are mentioned under various statutes. As section 53 of I.P.C, 1860 tells that the punishments to which offenders are liable under the provisions of I.P.C. are death, imprisonment of life, imprisonment, forfeiture of property and fine. There is no controversy when fine is only punishment given under any statute. There is also no issue when statute entrusts the court with discretion to inflict fine or imprisonment, as in this case court shall inflict only fine on company. Because a company being a Juristic person cannot obviously be sentenced to imprisonment as cannot suffer imprisonment.Judicial outcry lies in that situation where statute prescribes mandatory imprisonment with fine as a punishment for an offence. The basic rule of criminal liability resolves around the Latin maxim actus non facitreum, nisi mens sit rea.It means to make one liable there shall be a forbidden act or omission and with a deliberate intention. Hence, to prove attribute criminal liability to a company, it must be proved that there was a physical act i.e. actusreus and there was an intention to commit the act i.emensrea.The general belief in the early sixteenth and seventeenth centuries was that corporations could not be held criminally liable. Legal scholars did not believe that corporations could possess themoral blameworthiness necessary to commit crimes of intent. It was generally accepted that a corporationhas no soul; hence it cannot have "actual wicked intent”. It cannot, therefore, be guilty of crimes requiring "malus animus.In one sense the acts of the corporation are deemed to be the acts of its officers, directors, and employees.
Corporate Criminal Liability under the Companies Act 1956 &2013
In the present scenario, the activities of corporations have direct and adverse on the society. The thousands of scandals especially the white collar and organized crimes can come within the category that requires immediate concern. Irrespective of so many disasters, the law was unwilling to impose criminal liability upon corporations for a long time. This was for basically two reasons that are:
# Corporations cannot have the mensrea or the guilty mind to commit an offence; and
# Corporations cannot be imprisoned.
These two obstacles were deciding factors till late 20th and very early 21st century. The general belief in the early 16th and 17th centuries was that corporations could not be held criminally liable. In the early 1700s, corporate criminal liability faced a minimum of four obstacles, i.e.
Firstly, attributing acts to a juristic fiction, the...

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