Professional Documents
Culture Documents
LIABILITY
Difficulties?
Question is whether / not a corp. as
an artificial person is capable of
committing a crime & hence can be
liable by court ?
Fictional Creation
No mind, no soul
No question of mens rea
Co. cannot be guilty of a crime?
Criminal guilt required intent & a
Co. not having a mind cannot form
any intent?
Co. has no body that can be
imprisoned?
Judges required the accused to be
brought physically before the Court?
No Possibility in case of Co?
Corporate Criminal Liability
Courts Co. could not be criminally
prosecuted for offenses requiring mens rea as
they could not possess the requisite mens rea.
Mens rea is an essential element for majority, if
not all, of offenses that would entail
imprisonment / other penalty for its violation.
Co. could not be prosecuted for offenses
requiring a mandatory punishment of
imprisonment, as they could not be imprisoned.
Corporations & their officers
Corp. may be criminally liable gets some support from Sec. 11,
IPC which has also the effect of giving them the benefit of
criminal law if they happen to become the victim of specific
offences sentenced to imprisonment. Syndicate Transport Co.,
(1963) 66 Bom LR 197.
If the offence is punishable with fine only, the corp. (e.g. a local
authority) can be punished.- Girdharilal v. Lalchand, 1970 Cr LJ
987 (Raj).
Question of liability of Directors & Responsible Officers -
Unless they
Technically, can prove
the offender is a Corp.,that - Offence
the Directors, was
may still be
committed
liable (in addition to the criminal liability of the corp.) if their
own participation in the offence amounts to abetting the offence
Without their knowledge, /
within the meaning of SS 107 & 108, IPC
That theyenacted
Special Acts exercised all due
- Contain diligence
provisions to prevent
- Directors & other
the- commission
Officers are also declaredof that offence.
criminally liable for an offence
against that special Act,
A.K. Khosla v T.S. Venkatesan, (1992) Cr. L.J. 1448
2 Co. - Charged with having committed fraud (IPC)
Magistrate issued process against the Co.
Argument - inter alia - Co., as juristic persons,
could not be prosecuted for offences - for which
mens rea is an essential ingredient.
Two prerequisites for the prosecution of corporate
bodies
Being that of mens rea &
Being the ability to impose the mandatory sentence of
imprisonment.
Each of these prerequisites rendered the prosecution of
the defendant Co. futile:
A corporate body could not be said to have the necessary
mens rea, nor can it be sentenced to imprisonment as it
has no physical body.
Kalpanath Rai v State, (Through CBI) (1997) 8 SCC 732
M Mukharji, K Thomas
M/s. East West Travel & Trade-Links Ltd (Hotel
Hans Plaza) - Accused & arraigned under TADA -
was alleged to have harbored terrorists.
Trial court convicted the Co. U/S 3(4) of the TADA.
SC referred to the definition of the word Harbour
(Sec. 52A of the IPC)
3(4) Whoever harbours / conceals, / attempts to harbour
/ conceal, any terrorist shall be punishable with
imprisonment for a term which shall not be less than
five years but which may extend to imprisonment for
life & shall also be liable to fine
Held - Nothing in TADA, either express / implied, to
indicate - mens rea element had been excluded from
the offense U/S 3(4) of TADA.
Court observed -
in many recent penal statutes, Cos / Corps
are deemed to be offenders on the strength of
the acts committed by persons responsible for
the management / affairs of such Cos / Corps
e.g. Essential Commodities Act, Prevention of
Food Adulteration Act, etc. . . . But there is no
such provision in TADA which makes the Co.
liable for the acts of its officers.
No scope whatsoever to prosecute a Co. for the
offense U/S 3(4) of TADA
Referred - State of Maharashtra v Mayer Hans George A.I.R. 1965
S.C. 722 & Nathulal v State of M.P. A.I.R. 1966 S.C. 43
Because
The the Co.mind
guilty is an artificial
of the entity it canoronly
directors act through
managers its
will
agents.
render the Co. itself liable
By this doctrine the court has deemed the mind of certain agents
to be the directing mind or alter ego of the Co.
Their conduct & their mens rea, when they are acting as
authorised agents on behalf of the Co. & in the course of its
business, are attributed to the Co.
Director of Public Prosecutions v Kent and Sussex Contractors Ltd.,
(1944) 1 K.B. 146; (1944) 1 All E.R. 119 (MacNaghten, J.)
Co. identified with those officers who are its directing mind & will
A body corporate is a person to whom, amongst the various
attributes it may have, there should be imputed the attribute of
a mind capable of knowing & forming an intention - indeed it is
much too late in the day to suggest the contrary. It can only
know or form an intention through its human agents, but
circumstance may be such that the knowledge of the agent must
be imputed to the body corporate
Counsel for the respondents says that, although a body
corporate may be capable of Co. can anform
having its intentions
intention, it is not
through its human agents & in
capable of having a criminal intention.
In this particular case the intention certain circumstances
was the intention (like
to deceive. If, as in thisin
case, the responsible agent of a body corporate puts forward a document
this case) the knowledge of the
knowing it to be false & intending that it should deceive. I apprehend,
agent Caldecote,
according to the authorities that Viscount has to be imputed
L.C.J., to his
has cited, the
knowledge & intention must be imputed bodyto the body corporate.
corporate.
H.L. Bolton (Engineering) Co. Ltd. v T.J. Graham & Sons Ltd.
[1956] 3 All E.R. 624 - Lord Denning
In his inimitable style a Co. may in many
ways be likened to a human body. It has a brain
& nerve centre which controls what it does. It
also has hands which hold the tools & act in
accordance with directions from the centre.
Some of the people in the co. are mere servants
& agents who are nothing more than hands to
do the work & cannot be said to represent the
mind or will.
Others are directors & managers who represent
the directing mind & will of the Co. & control
what it does.
H.L. Bolton (Engineering) Co. Ltd. v T.J. Graham & Sons Ltd.
[1956] 3 All E.R. 624 - Lord Denning
The state of mind of these managers is the state of
mind of the Co. & is treated by the law as such.
In certain cases, where the law requires personal fault
as a condition of liability in tort, the fault of the
manager will be the personal fault of the co.
Referring to Lord Haldanes speech in Lennards Carrying
Co. Ltd. v. Asiatic Petroleum Co. Ltd. [1915] A.C. 705.
Elaborating further
In criminal law, in cases where the law requires
a guilty mind as a condition of a criminal
offence, the guilty mind of the directors / the
managers will render the co. itself guilty.
R v I.C.R. Haulage Ltd, [1944] K.B.551, C.A
A Co. is capable of committing the offence of
conspiracy to defraud notwithstanding that it can
only form an intention through its human agents.
When an offence contemplates mens rea, i.e.
criminal intention / guilty / blameworthy mind, a
vital question arises as to the liability in respect of
such offences -
Whether a Co. can be said to have committed such
an offence in as much as it has no mind?
Whether the mens rea of a director / officer of a Co.
can be attributed to the Co., & Co. can be held liable
& punished?
The aforesaid question may be considered under
the category 'Corporate Criminal Liability.
Tesco Supermarkets v Nattrass (1972) AC 153
A co. was convicted for selling goods at a higher
price than indicated, in violation of the Trade
Descriptions Act, 1968
Held that the shop manager could not be
identified with the co.
Identification Principle - liability of a crime
committed by a corporate entity is attributed or
identified to a person who has a control over the
affairs of the co. & that person is held liable for
the crime or fault committed by the co. under
his supervision.
Tesco Stores Ltd. v Brent London Borough Council,
(1993) 2 All E.R.718
Doctrine of Identification could be applied here
& the co. was liable.
Reason for this decision was that in a large co.,
the senior management could not be expected to
know each & every customer & whether the
customer was a minor or not.
In that event to locate a person for this
knowledge was hence impossible & the doctrine
of identification was hence applicable in this
case.
R v P & O European Ferries (Dover) Ltd
(1990) 93 Cr App R 72 at 84.
Turner J, in his classic analysis of the relevant
principles, said:
Where a Corp., through the controlling mind
of one of its agents, does an act which fulfils the
prerequisites of the crime of manslaughter, it is
properly indictable for the crime of
manslaughter.
In our judgment, unless an identified
individuals conduct, characterisable as gross
criminal negligence, can be attributed to the Co.,
the Co. is not, in the present state of the common
law, liable for manslaughter
Attorney Generals Reference (No. 2 of 1999) (2000) 3 All
ER 182 (CA); See also R v Adomako (1994) 3 All ER 79
Whether in a corporate liability in relation to the crime of manslaughter by
recklessness / gross negligence, identification principle was relevant & whether
evidence of defendants state of mind before conviction was necessary &
whether it was necessary to establish guilt of identified human being before
conviction of co., were the questions before the CA.
Corporate Killer?
Held that, a defendant could properly be convicted of manslaughter by gross
negligence in the absence of evidence of his state of mind. But a non-human
defendant could not be convicted of the crime of manslaughter by gross
negligence in the absence of evidence establishing the guilt of an identified
human individual.
The courts had not started a process of moving from identification to personal
liability, as a basis for corporate liability for manslaughter & the authorities
did not support such a contention. It had not been suggested / implied that the
concept of identification was dead / moribund in relation to common law
offences. Thus the identification principle remained the only basis in common
law for corporate liability for gross negligence manslaughter.
Glanville Williams Text Book on Criminal Law