| PART – IV
CRIME AND PUNISHMENT
OFFENCES, SENTENCES, SENTENCING & COMPOUNDING
14.1 Lord Denning appearing before the Royal Commission on ‘Capital Punishment’ expressed the following views: Punishment is the way in which society expresses its denunciation of wrong doing and in order to maintain respect for law, it is essential that punishment inflicted for grave crimes should adequately reflect the revulsion felt by the great majority of the citizens. For them it is a mistake to consider the object of punishment as being deterrent or reformative or preventive and nothing else. The truth is that some crimes are so outrageous that society insists on adequate punishment because wrong doer deserves it, irrespective of whether it is deterrent or not.
14.2 Punishment must be severe enough to act as a deterrent but not too severe to be brutal. Similarly punishments should be moderate enough to be human but cannot be too moderate to be ineffective.
14.3 SENTENCING CONSIDERATIONS
14.3.1 Sentencing aspects that are relevant for consideration by courts are more or less laid down by courts all over the world except where the statute provides a minimum mandatory sentence. Factors that influence sentencing process have been clearly settled by a series of court pronouncements. For imposing substantial punishment many aspects are taken into account. Similarly for reducing the quantum, factors which mitigate are also taken into account. Therefore in the sentencing process both these factors are taken together.
14.3.2 Emmins in his On Sentencing (Martin Vasik ed) lists out various factors under the head of seriousness of offence which is the key concept. Several sub-heads indicate when the seriousness of the offence is aggravated, where the victim is specially vulnerable that is where the offender takes advantage of a helpless person; a very young or very old or handicapped person. He also speaks of breach of trust. This arises in a case where somebody takes advantage of a person who is interested in his career or a person who abuses his office. A premeditated crime executed with professionalism also is an aggravation. Excessive violence, offences by a group or an offence committed by a person on bail for a particular crime which is prevalent in an area and causes public concern are all cited as aggravating factors. He also lists factors which mitigate the seriousness of the offence. Offence committed under grave provocation, offender acting in circumstances though they may not amount to a defence to decide culpability. Other factors listed by him are young age of offender, old age of offender, offender’s previous character, clean record, where the offender has performed meritorious service, where the offender shows remorse, offender pleading guilty. Serious illness of the offender, effect of sentence on the family, passage of time after he committed the offence and trial are also germane and are extenuating factors. These are some of the criteria or guidelines according to Emmins which will have to weigh with a Judge who passes the sentence.
14.4 NEED FOR SENTENCING GUIDELINES
14.4.1 The Indian Penal Code prescribed offences and punishments for the same. For many offences only the maximum punishment is prescribed and for some offences the minimum may be prescribed. The Judge has wide discretion in awarding the sentence within the statutory limits. There is now no guidance to the Judge in regard to selecting the most appropriate sentence given the circumstances of the case. Therefore each Judge exercises discretion accordingly to his own judgment. There is therefore no uniformity. Some Judges are lenient and some Judges are harsh. Exercise of unguided discretion is not good even if it is the Judge that exercises the discretion. In some countries guidance regarding sentencing option is given in the penal code and sentencing guideline laws. There is need for such law in our country to minimise uncertainty to the matter of awarding sentence. There are several factors which are relevant in prescribing the alternative sentences. This requires a thorough examination by an expert statutory body.
14.4.2 Although many countries have abolished death penalty in view of the increasing violence and deterrence having failed organised crime, terrorism, bomb blasts resulting in killing of innocent people etc., compel the retention of death sentence. Law Commission also states that time is not ripe for abolition of death sentence. Section 354 (3) Cr.P.C makes imprisonment for life the normal punishment and the same section requires that in case a death sentence is imposed, special reasons are to be given and the Supreme Court in Bachaan Singh’s case held that in the rarest of the rare case the same can be given and enumerated circumstances in which it should be granted and further in Macchi Singh’s case they laid down some more requirements namely the manner of the murder, the motive for the commission of offence, the anti-social nature of crime, the magnitude of the crime and the personality of the victim such as innocent child and helpless woman or a victim over whom the murderer is in a position to dominate or the victim is a public figure.
14.4.3 The Law Commission in its 47th report says that a proper sentence is a composite of many factors, the nature of offence, the circumstances extenuating or aggravating the offence, the prior criminal record if any of the offender, the age of the offender, the professional, social record of the offender, the background of the offender with reference to education, home life, the mental condition of the offender, the prospective rehabilitation of the offender, the possibility of treatment or training of the offender, the sentence by serving as a deterrent in the community for recurrence of the particular offence.
14.4.4 Offenders also have to be classified as a casual offender, an offender who casually commits a crime, an offender who is a habitual, a professional offender like gangsters, terrorist or one who belongs to Mafia. There should be different kinds of punishments so far as the offenders are concerned. Similarly in fixing a sentence many factors are relevant, the nature of offence, the mode of commission of the offence, the utter brutality of the same, depravity of the mind of the man. Sentences contemplated by Section 53 of IPC are death, imprisonment for life, and forfeiture of property or fine.
14.4.5 Some times the courts are unduly harsh, sometimes they are liberal and we have already adverted to aspects which Supreme Court said are relevant in deciding as to what are the rarest of the rare cases for imposing death sentence and even in such matters uniformity is lacking. In certain rape cases acquittals gave rise to public protests. Therefore in order to bring about certain regulation and predictability in the matter of sentencing, the Committee recommends a statutory committee to lay guidelines on sentencing guidelines under the Chairmanship of a former Judge of Supreme Court or a former Chief Justice of a High Court experienced in criminal law with other members representing the prosecution, legal profession, police, social scientist and women representative.
14.5 NEED FOR NEW KINDS OF OFFENCES AND NEW TYPES OF PUNISHMENTS
14.5.1 Different kinds of punishments are the need of the hour. Disqualification from holding public office, removal from the community etc. are some of the measures that should be introduced and not punishment in a prison. These punishments are not custodial in nature. Far reaching reforms have taken place in England and the year 2000 is a watershed and enactments like the Powers of the Criminal Court Sentencing Act, 2000 modifying earlier laws were enacted introducing a whole range of new and novel punishments, postponement of sentencing, suspended sentence of imprisonment, supervision during suspension, community sentences, community rehabilitation order, financial penalties and reparation orders, parenting orders for children, confiscation order, disqualification orders etc., are many of the changes that have been brought out. Even in India under the Motor Vehicle’s Act a disqualification for holding a license can be a part of punishment. Dismissal of a public servant from service for criminal misappropriation and breach of trust is an additional measure of punishment. Under the Representation of the People’s Act there is disqualification in the event of proved electoral mal practices or on account of conviction.
14.5.2 In other words instead of conventional punishments enumerated in Sec.53 of the Penal Code which was enacted in 1860 nothing has been done to reform the system of punishment. The U.K. Powers of Criminal Courts Sentencing Act of 2000 contains general provisions regarding a community orders and community sentences and a curfew order, community rehabilitation order, a community punishment order, a community punishment rehabilitation order, a drug treatment and testing order, attendance order, a supervision order, an action plan order are all covered by the definition of community order and community sentences and monitoring of orders. These orders have certain limitations. Curfew orders are those by which a person convicted of an offence is required to remain at a place specified or different places on different dates. It is not custodial in nature. In a community rehabilitation order a convicted person may be kept under the supervision of a named authority to secure his rehabilitation or protecting the public from such an individual or to prevent further crime. In respect of sexual offenders or persons who have a mental condition or those who are drug addicts or addicted to alcohol various provisions have been enacted with a view to rehabilitate the individual, take him off the drugs or alcohol and enable him to live as a decent human being. Supervision orders and sentence orders are also treated as forms of punishments in addition to fines. The Power of Criminal Courts Sentencing Act, 2000 provides for a compensation order.
14.5.3 In Indian law, so far as the custodial punishments are concerned there are certain offences for which maximum term is provided and also provisions for mandatory minimum punishment Section 397, 398 IPC, PC Act, NDPS Act, PFA Act provide for mandatory minimum punishments. Since some of these offences are offences against society as a whole, against public health, against the safety or well being of society at large, such punishment should be retained.
14.5.4 IPC Amendment Bill of 1978 was the first attempt made to bring about certain changes in sentencing which remained static from the time IPC was enacted. Prior to this a bill had been enacted in 1972 which suggested 3 new forms of punishment externment Section 17(A) compensation for victims-14(8) and Public Censure 74(C). However, in 1978 externment as a form of punishment was rejected. Community service [74(A)], compensation to victims [74(B)] and Public Censure [74(C)] and disqualification for holding office 74(D) were proposed. Community Service is in vogue in many countries UK., USSR, Zimbabwe uses it. Recently Government of Andhra Pradesh has initiated a move to introduce the same. However, in community sentences certain restrictions regarding age etc are suggested. The accused must be less than 18 years.
14.5.5 The offence must be one for which the punishment by way imprisonment must be less than 3 years. It is an alternative to punishment and there should be an upper and lower limit regarding duration of community service. The court should be satisfied about the suitability of the accused for carrying out the work.
14.5.6 Public censure under Section 74 (C) was provided for white-collar crimes. This was suggested as being in addition to punishment. Disqualification for holding office was proposed under Section 74(B). This is also an additional punishment applicable to holders of office and it is limited with respect to the position and also the period. Unfortunately after the abortive attempt in 1978 no endeavour was made to re-introduce the same and the law since 1870 remains static.
14.5.7 To ensure uniformity and to avoid and uncertainties legislation such as Criminal Courts Sentencing Act of 2000 which is in force in UK can be thought of so that predictability and uniformity in so far as “Sentencing” is concerned is assured. Section 78 of the English Act imposes limits on imprisonment and detention in young offenders institutions. Sections 79 & 80 provide for general restrictions on description and custody of sentences and length of sentences. Presenter reports are also to be looked into Section 83 imposes certain restrictions on persons who are not legally represented.
14.5.8 Sections 89, 90, 91, 93 and 94 provide for restrictions, periods of detention for persons below the age of 18 to 21 years. Suspended sentences, suspension orders, special enactments like Sex Offenders Act of 1997, are the changes brought out even in regard to a class of offences. Community orders and community sentences are applicable where there is no sentence fixed by law. They cover a wide range such as curfew order, community rehabilitation order, and community punishment order. A Drug treatment order, an attendance centre order, a suspension order are part of the statutory changes.
14.5.9 Financial penalties taking into account the offenders’ financial circumstances, and fixing of fines, remission of fines, compensation orders are provided. A review of compensation orders limits of fine to be imposed on the young offender and a direction to the parent or guardian to pay fines, compensation etc., are all fixed and statutorily regulated. Power to confiscate the property used for Crime is covered by Section 143 of Criminal Courts Sentencing Act of 2000. Forfeiture is also provided. We have Shrama-dan, or NSS work which can be usefully introduced as part of sentencing. ‘Janman-Bhoomi concept in vogue in Andhra Pradesh can be converted into a convicts wage to the community for the crime committed. All these clearly show the changes and the emerging pattern in sentencing and several other facts the aim of all of which is to bring about a psychological change in the accused, to have an impact on the mind so that the same may bring about certain reformation of the individual. It is time that with the advancement of science, medicine and human psychology we try to find out the etiology of the Crime in our country and to bring about legislation which introduces a whole range of new and innovative punishments some of which are enumerated in the preceding paragraphs.
14.6 PREPARING FOR EMERGING CHALLENGES
14.6.1 The last century has seen amazing change in the pattern of crime and the intensity and impact of the same on society. Terrorism has become global in nature, and the consequences of the same in terms of loss of life are phenomenal. Organised crime and its ramifications are global. Economic offences are transnational in operations and cyber crimes have no geographical limitation. Sexual offences, child abuse, drug trafficking, trafficking in women and child, pornography, hijacking of aircrafts are all crimes which have no limitations either in terms of space or geographical boundaries and the impact of same affects the entire society and the nation itself. Therefore the need to combat these emerging crimes, which are bound to increase in number and in frequency, will have to be addressed and tackled. The existing laws are inadequate and therefore legislation and new policies of sentencing are the desideratum. Man’s depredation of nature resulting in ecological imbalance, the concern for preservation of forests, wild life, compassion for the other living beings which are part of the Constitutional obligations have all resulted in new legislations being enacted. The increasing importance towards the end of the last century of human rights requires that punishments and sentencing should be consistent with Human Rights Jurisprudence. Rights of disadvantaged sections, gender bias, and sexual harassment in work places are all great concerns and elimination of all forms of discriminations are getting statutory protection and recognition.
14.6.2 While these are the challenges and the tasks that we face, the sentencing criteria that in vogue till now requires to be remedied and rectified as they are inadequate sometimes ineffective and do not take into account the human rights angle and do not provide adequate preventive and deterrent sentences to the new forms of crimes that have exploded consequent on the advancement of science and technology and the use of the same by criminals having ramifications which have cross-border implications. Though some new legislations have been passed every endeavour should be made to tackle and punish perpetrators of such crimes adequately. These are serious matters involving policy considerations.
14.6.3 This Committee is not asked to undertake a general review of the Indian Penal Code. That is a gigantic and time consuming task. The Committee has therefore restricted its attention to suggesting a few amendments in the context of the general reforms of the Criminal Justice System. The Committee is convinced that a comprehensive review of the Indian Penal Code is long over due and should be undertaken on a priority basis by a high power Committee. This is not an exercise to be carried out by only lawyers and Judges. Public men and women representing different walks of life and different school of thought, social scientists, politicians etc should be on such a Committee to recommend to the Parliament a better and progressive Penal Law for the Country. Hence, it is recommended that a Committee should be appointed to review the Indian Penal Code and to suggest creation of new kinds of offences, prescribing new forms of punishments and reviewing the existing offences and punishments.
14.7 ALTERNATIVE TO DEATH PENALTY
14.7.1 Section 53 of the IPC enumerates various kinds of punishments that can be awarded to the offenders, the highest being the death penalty and the second being the sentence of imprisonment for life. At present there is no sentence that can be awarded higher than imprisonment for life and lower than death penalty. In USA a higher punishment called “Imprisonment for life without commutation or remission” is one of the punishments. As death penalty is harsh and irreversible the Supreme Court has held that death penalty should be awarded only in the rarest of rare cases, the Committee considers that it is desirable to prescribe a punishment higher than that of imprisonment for life and lower than death penalty. Section 53 be suitably amended to include “Imprisonment for life without commutation or remission” as one of the punishments.
14.7.2 Wherever imprisonment for life is one of the penalties prescribed under the IPC, the following alternative punishment be added namely “Imprisonment for life without commutation or remission”. Wherever punishment of imprisonment for life without commutation or remission is awarded, the State Governments cannot commute or remit the sentence. Therefore, suitable amendment may be made to make it clear that the State Governments cannot exercise power of remission or commutation when sentence of “Imprisonment for life without remission or commutation” is awarded. This however cannot affect the Power of Pardon etc of the President and the Governor under Articles 72 and 161 respectively.
14.8 CONCERN FOR MOTHER
14.8.1 The concern for the mother and the child and social issues like female foeticide, domestic violence organs transplantation etc. needs a total new approach in the matter of punishment. Pregnant women or women with child less than seven years of age if incarcerated, the trauma and impact of the same will have both on the mother and the child in life after prison cannot be ignored. Hence such cases of convicted pregnant women or the mother having young child below 7 years require human and humane approach and therefore house detention with sufficient safe guards to prevent escape must be thought of. There are modern gadgets used in U.S.A to ensure that House arrest orders are not disobeyed. Any violation can be detected by means of such a gadget. They can be used in India to respect the rights of the child.
14.9 NEED FOR REFORMS AND REVISION OF FINES
14.9.1 So far as sentences of fine are concerned, time has come to have a fresh look on the amounts of fine mentioned in the IPC and the mode of recovery. As the law stands we have two classes of offences for which only fine can be imposed. Then there are offences for which fine can be imposed in addition to imprisonment. Further for non-payment of fine, imprisonment is also provided. So far as imprisonment in case of default of payment of fine is concerned it is time that the same is done away with. In view of the acceptance that custodial sentences are only to be imposed in grave crimes there are many areas where correctional approach or community sentences etc., will have the desired effect.
14.9.2 Section 64 of the IPC should be amended and Sec. 65 which says that where in addition to imprisonment, fine is imposed as also punishment in default of the payment of fine imprisonment shall not exceed 1/4th of the sentence that may be fixed should also be deleted. Sec. 66,67 should also be deleted as also 68 and 69 of the IPC and in all these crimes community services for specified periods should be prescribed.
14.9.3 The amount of fine as fixed in 1860 has not at all been revised. We live in an age of galloping inflation. Money value has gone down. Incomes have increased and crime has become low risk and high return adventure particularly in matters relating to economic offences and offences like misappropriation breach of trust and cheating. For all matters involving in money or money related crimes new legislations have also created offences, a case in point is Section 138 of the Negotiable Instruments Act where huge sums of money are involved, fine extending to twice the cheque amount can be imposed / levied. In matters of sentence of fine it is not desirable that the paying capacity of the rich criminal and that of the poor is taken into account.
14.9.4 Further it is universally accepted that victims rights should not be ignored for the victim, he or she, pays a heavy price. Therefore from out of the fine imposed victim, is also to be compensated. Another aspect is the cost of living has to be taken into account. The provisions of Minimum Wages Act are applicable to many wage earners. Therefore in the organised sector or even in un-organised sector wages have gone up and then even the earning capacity of individuals has increased. Hence time has come when attention should be focussed on increasing the amount of fine in many cases. There are certain sections where Penal Code authorises the imposition of fine but the amount of fine is not mentioned. In such cases Sec.63 of the IPC says where the sum is not indicated then the amount of fine may be unlimited but should not be excessive. When a fine is imposed and is not paid the court can prescribe default sentence of imprisonment. This may act harshly in some cases of genuine incapacity to pay. Therefore the Committee suggests that community service may be prescribed as an alternative to default sentence. In view of the circumstances enumerated the fine amounts should be revised. Time has come when the amount of fine statutorily fixed under the Penal Code also should be revised by 50 times.
14.10 COMPOUNDING/SETTLEMENT WITHOUT TRIAL 14.10.1 Plea-bargaining which has been implemented with a great deal of success in USA has to be seriously considered. The Supreme Court of United States has upheld the Constitutional validity and also endorsed that pleabargaining plays a significant role in the disposal of criminal cases. The United States experiment shows that plea-bargaining helps the disposal of the accumulated cases and expedites delivery of Criminal Justice and the Law Commission of India in its 154th and 142nd reports adverted to the same. The Law Commission also observed that when an accused feels contrite and wants to make amends or is honest and candid to plead guilty in the hope that the community will enable him to pay the fine for the crime with a degree of compassion, then he deserves to be treated differently from the accused who seeks trial involving considerable time, cost and money and cost of the community.
14.10.2 The Law Commission in its 142nd report stated that it is desirable to infuse life into reformative provisions embodied in Sec.360 CrPC and the Probation of Offenders Act which according to the Law Commission remained unutilised. Law Commission noted the advantages of plea-bargaining which ensures speedy trial with benefits such as end of uncertainty, saving of cost of litigation, relieving of the anxiety that a prolonged trial might involve and avoiding legal expenses. The Law Commission also noted that it would enable the accused to start a fresh life after undergoing a lesser sentence. Law Commission noted that about 75% of total convictions are the result of pleabargaining in USA and they contrasted it with 75% of the acquittals in India. Law Commission also observed that certainly plea-bargaining is a viable alternative to be explored to deal with huge arrears of criminal cases. The same might involve pre-trail negotiations, and whether it is “charge bargaining” or “sentence bargaining” it results in a reduced sentence and early disposal.
14.10.3 The Law Commission adverted to the views of the Indian Supreme Court in this regard but however stated that plea-bargaining can be made one of the components of the administration of the criminal justice and the only caveat that they entered is that it should be properly administered and they recommend that in cases where the imprisonment is less than seven years and / or fine may be brought into schemes of things where plea bargaining should be there and they also stated that in respect of nature and gravity of the punishment quantum of punishment could be brought down but unlike in the United States, where plea bargaining is available for all the crimes and offences plea-bargaining in India should not be extended to socio economic offences or the offences against women and children.
14.10.4 As recommended by the Law Commission when the accused makes a plea of guilty after hearing the public prosecutor or the de facto complainant the accused can be given a suspended sentence and he can be released on probation or the court may order him to pay compensation to the victim and impose a sentence taking into account the plea bargaining or convict him for an offence of lesser gravity may be considered. Taking into account the advantages of plea-bargaining, the recommendations of the Law Commission contained in the 142nd report and the 154th report may be incorporated so that a large number of cases can be resolved and early disposals can be achieved. By no stretch of imagination can the taint of legalising a crime will attach to it. It should not be forgotten that already the Probation of Offenders Act gives the court the power to pass a probation order. Further the power of executive pardon, power of re-mission of sentences have already an element of not condoning the crime but lessening the rigour or length of imprisonment. In imposing a sentence for a lesser offence or a lesser period the community interest is served and it will facilitate an earlier resolution of a criminal case, thus reducing the burden of the court. Perhaps it would even reduce the number of acquittals for after prolonged trial it is quite possible that the case may end in acquittal. If the compounding offences is there in the statute even under old Cr.P.C. there is no reason why, when the accused is not let off but he is sentenced for a lesser sentence plea bargaining should not be included in the Criminal Justice System, so that the object of securing conviction and also reducing the period of trial can be achieved and reduced pendency can also be achieved in “one go”.
14.10.5 The Law Commission after thorough examination of the subject of plea-bargaining/compounding/settlement without trial has in its 142nd and 154th reports made detailed recommendations to promote settlement of criminal cases without trial. As the Committee is substantially in agreement with the views and recommendations of the Law Commission in the said reports it considers unnecessary to examine this issue in detail.
14.10.6 However, the Committee is of the view that in addition to the offences prescribed in the Code as compoundable with or without the order of the court there are many other offences which deserve to be included in the list of compoundable offences. Where the offences are not of a serious character and the impact is mainly on the victim and not on the values of the society, it is desirable to encourage settlement without trial. The Committee feels that many offences should be added to the table in 320(1) of the Code of Criminal Procedure. The Committee further recommends offences which are compoundable with the leave of the court, may be made compoundable without the leave of the court. These are matters which should be entrusted to the Committee.
RECLASSIFICATION OF OFFENCES
15.1 NEED FOR CLASSIFICATION
15.1.1 India inherited the present system of classification of offences from its colonial rulers more than 140 years back, in which the police are the primary enforcers of the law. Considering the nature of the impact of colonial law making, suffice it to say that it is time to reexamine and reframe the laws as appropriate to the twenty first century Indian society and its emerging complexities.
15.1.2 Many countries in the world have started their own initiatives in improving their domestic Criminal Justice Systems. England, USA and Australia are all in the process of charting out reforms. As societies continue to change, crimes become complex and new crimes emerge, it is imperative for India to work out a comprehensive Criminal Justice System, suited to the ethos of this country. 15.1.3 As the aim of the Committee is to make the Criminal Justice System just, efficient, speedy and cost-efficient, time has come to re-examine and re-define crime under the various laws in the Criminal Justice System to ensure that appropriate procedures will be available for different infringement of penal laws so that cases will be dealt with at a speed commensurate to the gravity of the infringement, with certainty in terms of time and punishment. For, what were considered serious crimes yesterday may not be so considered today. The matter is all the more urgent as the Criminal Justice System has virtually broken down under the weight of case burden and a thorough overhaul is essential to make it speedy, efficient as well as cost-effective.
15.1.4 If the Criminal Justice System were to increase its efficiency in rendering justice and become as quick as it is fair, it would restore the confidence of the people in the system. Towards this, it is necessary to not only re-classify crimes but re-classify them in such a manner that many of the crimes- which today take up enormous time and expense- are dealt with speedily at different levels by providing viable and easily carried out alternatives to the present procedures and systems. In brief, many infractions of the law which are classified as crimes today – and some considered serious, may not be so considered tomorrow.
15.2 CLASSIFICATION OF CRIMES/OFFENCES
15.2.1 The basis for the classification of crime is that contained in the Indian Penal Code (IPC) and the Criminal Procedure Code (Cr.P.C). But, over a period of time, various statutes have been added with different provisions about evidence, burden of proof etc., and often, the crimes themselves are not of the kind covered in the IPC; in fact, many of the special laws relate to social inequities. All these have only added to the burden of work on the Criminal Justice System. Further, with the changing views of what constitutes crime all over the world and not just in India, unless there is a re-look at the classification also, it will be difficult to work out appropriate prevention and detention strategies for different kinds of offences which are now clubbed together as crime. Under the Code, offences are broadly classified into four categories as indicated in the following paragraphs.
15.3 Cognizable Offences 15.3.1 Cognizable offences are offences for which a police officer may arrest without warrant and without the orders of a magistrate. In non-cognizable offences, a police officer cannot, in general, arrest a suspect without warrant or without the orders of a magistrate. The police officer can entertain only cognizable offences and the victim of a non-cognizable offence has to move the court with a complaint. This distinction deserves to be done away with.
15.3.2 Offences are classified as bailable and non-bailable: A bailable offence is one in which the accused has a right to be released on bail. In a nonbailable offence, the court can refuse bail to the accused.
15.4 Summons and Warrant Cases
15.4.1 Summons cases relate to offences punishable with either only a fine or with imprisonment not exceeding two years. All other cases are called warrant cases.
15.5 Compoundable and Non-compoundable offences
15.5.1 Compoundable offences are offences that can be compounded with or without the permission of the court. Non-compoundable offences, naturally, are those that cannot be compounded.
15.5.2 The source for determining the category under which an offence falls is available in the First Schedule of the Code.
15.6 SENTENCING POWERS OF COURTS 1. The High Court may pass any sentence authorised by law; 2. The Sessions Judge or the Addl. Sessions Judge may pass any sentence authorized by law but a death sentence passed by the Judge has to be confirmed by the High Court; 3. The Assistant Sessions Judge may pass any sentence except for death sentence or life imprisonment or imprisonment of over 10 years; 4. The Chief Judicial magistrate and Chief Metropolitan Magistrate can pass sentence under 7 years imprisonment; 5. Judicial Magistrates First Class and Metropolitan Magistrates can pass sentence upto 3 years or a fine upto Rs 5000/- or both; 6. Judicial Magistrates II Class can sentence upto 1 year and a fine of upto Rs 1000/- or both.
15.6.1 Thousands of cases are pending before different criminal courts. Once the process is set into motion, the difference between serious offences and petty offences is lost and undifferentiated. This in effect, is the problem. Reclassifying of offences makes no sense in isolation; it has to be accompanied by suitable change in procedures.
15.6.2 The concept or understanding of crime is changing with changes in our Society. Under our existing system, all crimes are treated alike. This is inadequate and inappropriate for dealing with new emerging crimes like, for example, cyber crimes, financial crimes or crimes of terror;
15.6.3 Clubbing all existing crimes together procedurally is not sound nor does it work. Some crimes may be of a correctional nature, some petty and many may really form part of social welfare legislation. These need to be reclassified, put into separate categories so that the law enforcement systems can attend to the more serious crimes, which it is intended to handle;
15.6.4 The only agency, which bears the brunt of investigation of crimes, is the police force. The police is understaffed, overworked, ill equipped and certainly cannot meet the demands placed upon it. Reclassification and removal of legal infractions from them so that they can be dealt with by other agencies, will contribute to greater efficiency of the Criminal Justice System.
15.6.5 The nature of crimes and the way to deal with them calls for a multi disciplinary approach. Social, psychological and economic causes contribute to the occurrence of crime and, therefore these causes must be borne in one’s mind in dealing with crimes. The corrective/punitive measures required to deal with them will need to be worked out;
15.6.6 Cost is an important reason for re-classifying crime. Of course, there is an economic cost, borne by the State ultimately and in many cases, by the victim of the crime. There are also other costs – time, efficiency and lastly, social costs. An efficient reclassification will automatically bring down all these costs.
15.6.7 In brief, reclassification will, to a large extent address and remedy the lacunae of the present Criminal Justice System.
15.6.8 Thus the need to reclassify crime today is both urgent and compelling. Offences range from the most heinous crime such as murders to a minor offence of appearing in a public place in drunken state. The result is that individuals once they are convicted for a minor offence get labeled as criminals and this stigma makes it difficult for them to get jobs and even a chance to reform and become useful members of Society. Where such persons are sent to jail, they often come under the influence of hardened criminals and gravitate towards a life of crime. This is one of the reasons for suggesting fine and not imprisonment as the only punishment in respect of large number of minor offences. This logic equally applies to increasing the number of compoundable offences which while satisfying the victim do not affect societal interests.
15.6.9 Relevant factors are the following: – ? ? Nature of the offence; ? ? Degree of violence; ? ? Extent of injury to the victim ? ? Extent of damage to property; ? ? Impact on the society; ? ? Any discernible behaviour pattern in commission of the offence; ? ? Whether alternative methods of dispute resolution like compounding or settlement would be adequate. ? ? Whether the victim should be compensated monetarily; ? ? The punishment prescribed by law for the offence and whether that is appropriate to the act.
15.6.10 Taking into consideration the above factors, it should be decided whether for each of the offences the accused should be inflicted punishment of fine or imprisonment, whether the accused should be arrested or not, whether the arrest should be with or without the order of the court, or whether the offence should be bailable or not and whether the offence should be compoundable or not and if compoundable, whether with or without the order of the court. 15.6.11 As is done in some countries it may be considered to classify the offences into three Codes namely (1) The Social Welfare Offence Code (2) The Correctional Offence Code, (3) The Criminal Offences Code and (4) The Economic and other Offences Code.
15.6.12 A Social welfare offences Code would include offences that are social in origin or nature and cover offences that might be prevented through awareness programmes. For such offences community service is preferred to jail sentence.
15.6.13 The Correctional offences Code would include non-cognizable offences that are punishable with less than 6 months imprisonment, which need not be considered as crimes. They are considered as “correctional” offences for which fine is the only punishment to be paid to the victim or state as case may be, or through counseling. All these offences are not arrestable.
15.6.14 The Criminal Offences Code would include all major/grave offences involving violence. Basically, this would really be the “crime” part of the offences. The enforcement agency would be the police and punishment will be imprisonment and fine. All the offences that fall within this category will be arrestable and mostly non-compoundable.
15.6.15 The Economic and other Offences Code would include all economic offences, like tax fraud, money laundering, stock market scams and also offences like cyber crimes, intellectual property violations etc. Although these are all clubbed together here, they will still require specialized, separate agencies that are responsible for dealing with them. Punishment will again have to, perhaps, be a combination of punitive fines and jail and community service. As reclassification into four codes discussed above is an important policy matter that requires greater and in depth study. 15.6.16 The Committee has made several recommendations for modification of some of the fundamental principles governing the Criminal Justice System and for improving the performance of the functionaries of the Criminal Justice System, namely the investigation, prosecution and the judiciary. Over the years crime scenario has changed enormously. Terrorism, Organised crimes, Economic crimes and several other new kinds of crimes have thrown serious challenges to the system. The law breakers appear to be emerging stronger than the law enforcing agency. The Indian Penal Code was enacted in the year 1860, the Evidence Act was enacted in the year 1872 and the Code of Criminal Procedure which was enacted in the year 1898 was replaced by the new Code in the year 1973. These laws enacted long back are now found to be inadequate to meet the new challenges. People are losing faith and are rightly demanding stronger laws and greater functional efficiency of the System. Hence there is a need of review all these laws. This is not an exercise to be carried out only by lawyers and judges. They involve important policy considerations such as Problems of National Security and interests of different sections of the society more particularly of Women, Children and other weaker sections of the Society. Hence the Committee recommends a comprehensive review of the Indian Penal Code, the Evidence Act and the Criminal Procedure Code by a broad based Committee representing the functionaries of the Criminal Justice System, eminent men and women representing different schools of thought, social scientists and vulnerable sections of the society to make recommendations to the Parliament for stronger and progressive laws for the country.
OFFENCES AGAINST WOMEN
16.1 MAINTENANCE OF WIVES, CHILDREN AND PARENTS: SECTION 125 CR.P.C 16.1.1 Section 125 of the Code provides for giving maintenance to the neglected wife, child etc. The object is to prevent starvation and vagrancy by compelling the person to perform the obligation which he owes in respect of his wife, child, father or mother who are unable to support themselves.
16.1.2 A woman in a second marriage is not entitled to claim maintenance as in law a second marriage during the subsistence of the first marriage is not legal and valid. Such a woman though she is de facto the wife of the man in law she is not his wife. Quite often the man marries the second wife suppressing the earlier marriage. In such a situation the second wife can’t claim the benefit of Section 125 for no fault of hers. The husband is absolved of his responsibility of maintaining his second wife. This is manifestly unfair and unreasonable. The man should not be allowed to take advantage of his own illegal acts. Law should not be insensitive to the suffering of such women. Therefore the Committee suggests that the definition of the word ‘wife’ in Section 125 should be amended so as to include a woman who was living with the man as his wife for a reasonably long period, during the subsistence of the first marriage.
16.2 MARRYING AGAIN DURING LIFE TIME OF HUSBAND OR WIFE– SECTION 494 IPC
16.2.1 Bigamy is made an offence under Section 494 IPC. The second marriage is void by reason of it taking place during the subsistence of the first marriage. In other words it would be bigamy only when the marriage is otherwise valid. In AIR 1965 S.C. 1564 Bhan Rao Shankar Lokhande vs. State of Maharashtra and AIR 1966 S.C. 619 Kunwal Ram Vs. State of Himachal Pradesh, the Supreme Court has held that in order to attract Section 494 IPC the prosecution has to prove that the second marriage was validly performed as per the customary rights of either party under their personal laws. If there is any lapse in following the customary rules, the second marriage would be regarded as void. It is not always easy to prove long after the marriage that all the rituals were duly performed. Thus the second wife will be denied the right to receive maintenance. To overcome these practical difficulties a suitable provision be incorporated to the effect that if the man and the wife were living as husband and wife for a reasonably long period they shall be deemed to have married in accordance with customary rites of either party thereto. This shall be rebuttable presumption and the finding shall not be binding in civil proceedings.
16.3 ADULTERY: SECTION 497 IPC
16.3.1 A man commits the offence of adultery if he has sexual intercourse with the wife of another man without the consent or connivance of the husband. The object of this Section is to preserve the sanctity of the marriage. The society abhors marital infidelity. Therefore there is no good reason for not meeting out similar treatment to wife who has sexual intercourse with a married man.
16.3.2 The Committee therefore suggests that Section 497 I.P.C should be suitably amended to the effect that “whosoever has sexual intercourse with the spouse of any other person is guilty of adultery… … ..”.
16.4 CRUELTY BY HUSBAND OR RELATIVE OF HUSBAND – SECTION 498 OF IPC
16.4.1 This provision is intended to protect the wife from being subjected by the husband or his relatives to cruelty. Cruelty for the purpose of this Section means willful conduct that is likely to drive the woman to commit suicide or cause grave injury or damage to life, limb or health, mental or physical. It also includes harassment by coercing to meet unlawful demands. This is a very welcome measure. But what has bothered the Committee are the provisions which make this offence non-bailable and non-compoundable. 16.4.2 The woman who lives with the husband and his family after marriage is expected to receive affection and caring and not cruelty and harassment. True to the Indian tradition the woman quietly suffers without complaining, many inconveniences, hardships and even insults with the sole object of making the marriage a success. She even tolerates a husband with bad habits. But then, when her suffering crosses the limit of tolerance she may even commit suicide. For the Indian woman marriage is a sacred bond and she tries her best not to break it. As this offence is made non-bailable and not compoundable it make reconciliation and returning to marital home almost impossible.
16.4.3 If the woman victim lodges an F.I.R alleging commission of offence under Section 498A, her husband, in-laws and other relatives of the husband would be arrested immediately. If she has no independent source of income she has to return to her natal family where also support may not be forthcoming. Her claim for maintenance would be honoured more in default than in payment especially if the husband has lost his job or suspended from his job due to the arrest. Where maintenance is given, it is often a paltry sum. (Thus the woman is neither here nor there. She has just fallen from the frying pan into the fire.) Even when there is a divorce, or reconciliation, the criminal case continues as Section 498A is non compoundable.
16.4.4 In less tolerant impulsive woman may lodge an FIR even on a trivial act. The result is that the husband and his family may be immediately arrested and there may be a suspension or loss of job. The offence alleged being non-bailable, innocent persons languish in custody. There may be a claim for maintenance adding fuel to fire, if the husband cannot pay. She may change her mind and get into the mood to forget and forgive. The husband may realize the mistakes committed and come forward to turn a new leaf for a loving and cordial relationship. The woman may like to seek reconciliation. But this may not be possible due to the legal obstacles. Even if she wishes to make amends by withdrawing the complaint, she can not do so as the offence is non compoundable. The doors for returning to family life stand closed. She is thus left at the mercy of her natal family.
16.4.5 This section, therefore, helps neither the wife nor the husband. The offence being non-bailable and non-compoundable makes an innocent person undergo stigmatization and hardship. Heartless provisions that make the offence non-bailable and non-compoundable operate against reconciliations. It is therefore necessary to make this offence (a) bailable and (b) compoundable to give a chance to the spouses to come together.
16.5 RAPE: SECTION 375 OF IPC
16.5.1 Offence of Rape is defined in Section 375 of the I.P.Code in the following terms: A man is said to commit “rape” who, except in the case hereinafter excepted, has sexual intercourse with a woman under circumstances falling under any of the six following descriptions: – Firstly – Against her will. Secondly – Without her consent. Thirdly – With her consent, when her consent has been obtained by putting her or any person in whom she is interested in fear of death or of hurt. Fourthly – With her consent, when the man knows that he is not her husband, and that her consent is given because she believes that he is another man to whom she is or believes herself to be lawfully married. Fifthly – With her consent, when, at the time of giving such consent, by reason of unsoundness of mind or intoxication or the administration by him personally or through another of any stupefying or unwholesome substance, she is unable to understand the nature and consequences of that to which she gives consent. Sixthly – With or without her consent, when she is under sixteen years of age’. Explanation:Penetration is sufficient to constitute the sexual intercourse necessary to the offence of rape. Exception: Sexual intercourse by a man with his own wife, the wife not being under fifteen years of age, is not rape.
16.5.2 It is clear from this provision that it is sexual intercourse with a woman under circumstances falling under any of the six of the descriptions given in the Section that constitutes an offence of rape. Normal sexual intercourse with voluntary consent of the woman above sixteen years of age is not an offence. The explanation to the Section says that penetration is sufficient to constitute the sexual intercourse. There is no definition of rape or sexual intercourse. The explanation only indicates the point of time or stage in the sexual act that is sufficient to make the sexual act an offence of rape.
16.5.3 ‘Sakshi’ a leading women’s N.G.O. has filed W.P.Criminal 33 of 1997 against the Union of India praying that the offence of Rape defined under Section 375 of the I.P.Code should be interpreted to include all other forms of forcible penetration including penile/oral, object or finger/vaginal and object or finger/anal. On that question the Supreme Court has sought the views of this Committee. The considered opinion of the Committee to the Supreme Court is that such an interpretation is not reasonable. As the opinion has to be sent to the Supreme Court the same is not discussed here. However the Committee is convinced that such acts constitute serious invasion of the precious rights of the woman and should be punishable with adequate sentence.
16.5.4 The Committee therefore recommends that other forms of forcible penetration including penile/oral, penile/anal, object or finger/vaginal and object or finger/anal should be made a separate offence prescribing punishment broadly on the lines of Section 376 of IPC.
16.6 RAPE AND DEATH PENALTY
16.6.1 There have been several shocking instances of rape that have given rise to the feeling that death penalty should be prescribed as a punishment for the offence of rape so that it acts as an effective deterrent. However international opinion is steadily emerging in favour of abolition of death penalty. The Supreme Court of India has ruled that in respect of serious offences of murder imprisonment for life should be the normal punishment and that it is only in rarest of rare cases that death penalty should be imposed. Those who are pleading for death penalty for the offence of rape feel that the punishment now prescribed has failed to have a deterrent effect. The view to the contrary is that the remedy should not be worse than the disease. Death penalty is irreversible. Any erroneous decision would lead to disastrous consequences. Judges are therefore likely to expect a much higher standard of proof. This may result in further lowering the rate of conviction. Besides if the rapist knows that rape carries death penalty he may be tempted to kill the victim so that she will not be available to give evidence against him. After giving its anxious consideration to all aspects and in particular the interest of the victim, the Committee is not persuaded to recommend death penalty for the offence of rape. Instead the Committee recommends sentence of imprisonment for life without commutation or remission.
16.6.2 What really acts as a deterrent is certainty of conviction and not the quantum of punishment that can be imposed. Unfortunately, large number of cases relating to offences of rape end in acquittals. Besides they take a long time for disposal. Therefore what is necessary is to expedite investigation and trial of cases involving offences of rape and other sexual offences against women. In Bangladesh, Prevention of Atrocities against women and Children Act 18 of 1995 has been enacted which provides that investigation and trial of rape cases should be completed within 90 days. The Committee therefore recommends that so far as offences of rape and other sexual offences against women are concerned, a suitable provision should be made requiring the investigation agency to complete the investigation within the prescribed time and for the court to dispose of such cases on priority basis within a period of four months.
16.6.3 Many rape victims do not take steps for prosecution of the victim because of the humiliating and agonizing treatment they are subject to when they give evidence in the court. Lawyers go on asking questions about the character, antecedents, behaviour and reputation of the victim and about sexual acts related to rape which is a dreadful and shameful experience to the woman. Many Judges do not regulate the cross-examination being utterly insensitive to the feelings, reputation and image of the victim. The Committee welcomes the recent amendment to section 146 of the Evidence Act by which cross-examination of the prosecutrix as to her general immoral character in a case for prosecution for rape or attempt to commit rape is prohibited. There is therefore need for specialized training of Judges trying rape cases and to instill in them sensitivity to the feelings of the victims.
16.7 FIRST INFORMATION REPORT
16.7.1 It is a matter of common knowledge that women in India are quite reluctant to disclose even to their dear and near ones that they were victims of rape partly because of the shame, apprehension of being misunderstood and fear of consequences besides her deeply traumatized and confused state of mind. This often contributes to delay in lodging FIR. Unexplained delay in submitting the FIR often proves fatal to the prosecution. The Committee therefore suggests that a suitable provision be incorporated in the Code fixing a reasonable period for presenting FIR in such cases.
ORGANISED CRIME 17.1 The Encyclopaedic Law Dictionary defines crime as “an act or omission which is prohibited by law as injurious to the public and punished by the State”.? Certain kinds of wrongs are considered as of a public character because they possess elements of evil which affect the public as a whole and not merely the person whose rights of property or person have been invaded. Such a wrong is called a crime. It can best be defined as any act of omission which is forbidden by law, to which the punishment is annexed, and which the State prosecutes in its own name.
17.2 Crime, in social or non-legal terms, is that “it is behaviour or an activity that offends the social code”? . It has also been defined as an “antisocial act”.?
17.3 Organised crime, in the backdrop of the legal and non-legal definitions, is far graver in nature as it is a “non-ideological enterprise”? which functions as a “continuing enterprise that rationally works to make a profit through illegal activities”? and is marked by a “distinguishing component” “within the term itself, mainly, organization”? . Alan Block suggests that “organised crime is part of a social system in which reciprocal services are performed by criminals, their clients and politicians.”? Thus organised crime is not just a manifestation of deadly gangsterism but a “manifestation of criminals consolidated to commit several crimes in pursuance of conspiratorial deliberations”.? The California Control of Profits of OC Act finds it of “conspiratorial nature and which seeks to supply illegal goods and services such as narcotics, prostitution, loan sharking, gambling and pornography, or that, through planning and coordination of individual efforts, seeks to conduct the illegal activities of arson from profit, hijacking, insurance fraud, smuggling, operating vehicle theft ring”. It maximizes profits by and through illegal services. It is also not to be equated with professional crime as it may encompass a series of inter-twined and interdependent professional crimes. The concept of organised crime as a myriad of mostly clandestine, diverse and complex activities, in the historical perspective focuses on “equating organised crime with ethnically homogenous” groups which was not accepted by the Federal Bureau of Investigation but, in contrast, the Federal Bureau of Narcotics stirred the American nation by their testimony that led the Kefauver Committee to assert the existence of Mafia in the U.S.A.
17.4 On the perception of organised crime during the last 80 years, Klaus Von Lampe perceives that “organised crime has evolved from an integral facet of big-city life to an assortment of global criminal player who challenge even the most powerful countries like the United States”.
17.5 The United Nations recognised the adverse effect of the organized crime as a serious social pathology and its impact on economy of any nation and resultantly on the global economy. It underscored the social pathologies flowing from it and, accordingly, deliberated on the issue of the Trans-Border organised crime and has concluded a convention under which strict measures have been suggested. The definition of organised crime in the convention is as follows: Organised Criminal group shall mean a structured group of three or more persons existing for a period of time and acting in concert with the aim of committing one or more serious crimes or offences established pursuant to this Convention, in order to obtain, directly, or indirectly, a financial or other material benefit.
17.6 By resolution 53/111, of 9th December 1998, the General Assembly established an Ad Hoc Committee open to all States, for the purpose of elaborating an international convention against transnational organised crime and three additional international legal protocols. The Convention was adopted after considerable debate in 1999 and 2000.
17.7 The Convention represents a major step forward in the fight against transnational organised crime, and signified the recognition of U.N. member states that this is a “serious and growing problem” which can only be solved through close international cooperation. The Convention, concluded at the 10th session of the Ad Hoc Committee established by the General Assembly to deal with this problem, is a legally-binding instrument committing States which ratify it to taking a series of measures against transnational organised crime. These include the creation of domestic criminal offences to combat the frameworks for mutual legal assistance, extradition, law-enforcement cooperation and technical assistance and training. In its fight against organised crime with international ramifications, the States rely on one another in investigating, prosecuting and punishing crimes committed by organised criminal groups. The Convention makes difficult for offenders and organised criminal groups to take advantage of gaps in national law, jurisdictional problems or a lack of accurate information about the full scope of their activities.
17.8 The Convention deals with the fight against organised crime in general and some of the major activities that transnational organized crime is commonly involved in, such as money-laundering, corruption and the obstruction of investigations or prosecutors. To supplement this, two Protocols also tackle specific areas of transnational organised crime which are of particular concern to U.N. member states.
17.9 The Protocol against the Smuggling of Migrants deals with the growing problem of organised criminal groups which smuggle migrants, often at high risk to the migrants and at great profit for the offenders.
17.10 The Protocol against Trafficking in Persons deals with the problem of modern slavery, in which the desire of people to seek a better life is taken advantage of by organised criminal groups. Migrants are often confined or coerced into exploitative or oppressive forms of employment, often in the sex trade or dangerous occupations, with the illicit incomes generated going to organised crime. The Protocols also commit countries which ratify them to making the basic subject of the Protocol a criminal offence, and to adopting other specific measures, such as controls on travel documents, to combat the problem. These supplement the more general measures found in the Convention, and countries must become parties to the Convention itself before they can become parties to any of the Protocols. A third Protocol, dealing with the illicit manufacturing of and trafficking in firearms, parts and components, and ammunition, remains under discussion.
17.11 UNITED NATIONS CONVENTION AGAINST TRANSNATIONAL ORGANISED CRIME AND SUPPLEMENTARY PROTOCOLS Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, supplementing the United Nations Convention against Transnational Organised Crime. Protocol against the Smuggling of Migrants by Land, Air and Sea, supplementing the United Nations Convention against Transnational Organised Crime. Protocol against the Illicit Manufacturing of and Trafficking in Firearms, their Parts and Components and Ammunition, supplementing the United Nations Convention against Transnational Organised Crime.
17.12 The Convention also aims to tackle the root cause of transnational crime-profit and includes strong measures that will allow law enforcers to confiscate criminal assets and hit money laundering network. Protection of witnesses will be the prime tool for dealing with organised crime promoters and beneficiaries.
17.13 India became a signatory to the U.N. Convention against Transnational Organised Crime and its three supplementary Protocols referred to above on December 12, 2002.
17.14 BRITAIN
17.14.1 In Britain, the law enforcement agencies are of the view that the battle against organised crime has been lost. For this, Sir David Phillips, Chief Constable of Kent and a leading member of the Association of Chief Police Officers blames Britain’s archaic Criminal Justice System and “the culture of modern lawyers who do not fight cases on the evidence, but on legal technicalities.” Radical changes in law have been demanded or crime would continue to rise. The Police in Britain have been advocating changes in law which would force the defence to reveal as much of its case before trial as the prosecution must reveal the other way. It has been acknowledged in Britain that the present law is wholly inadequate in dealing with organised crime. It takes massive Police resources to bring a case only to find that people escape not “on the balance of evidence, but on technicalities”. There has been an apprehension that the British Government have no real response to organised crime.
17.15 GERMANY
17.15.1 Germany on account of its geographical location in the heart of Europe, was significantly affected by organised crime. The free movement of people across the border of Germany with France, Belgium, Luxembourg, Netherlands and Austria, organised crime presenting its own challenges to the German States and Society. The German Government responded by taking measures to combat organised crime at both national and international level.
17.15.2 They concluded that organised crime is most prevalent in areas of criminal activity with a guarantee of large criminal profits and, at the same time, a lower risk of discovery due to two reasons: (i) there are no direct victims; and (ii) the victims are unwilling to testify in court.
17.15.3 For the resolute suppression of organised crime, Germany enacted legislations for suppression of drug, trafficking and other manifestations of organised crime Money Laundering Act, Aliens Act with telephone monitoring for the purposes of criminal proceedings and strengthened other criminal laws.
17.16 ORGANISED CRIME IN INDIA
17.16.1 Contrary to popular belief, Organised Crime as continuing illegal activity of the members of a highly organised, disciplined association, engaged in supplying illegal goods and services, is not a recent phenomenon in India. The private ‘senas’ in some parts of the country are reminiscent of private army of lathaits and paiks maintained by the landlords of yore. With their help, revenue rents were collected and land of the poor grabbed. Untold atrocities were the order of the day and retribution visited upon those hapless have-nots of society who did not fall in line. Gangs of robbers and dacoits, some of whom acquired a Robinhood like image, have also existed for centuries. In the erstwhile Bombay, Governor Aungier raised a militia of local Bhandari youths to deal with organised street-level gangs that robbed sailors in 1669.
17.16.2 Thugee as an organised illegal activity on the G.T. Road flourished in Central India till the 19th century with armed gangs of thugs, masquerading as pilgrims or wayfarers, winning the confidence of unsuspecting travellers, before looting and murdering them. The British Government deputed Sir William Sleeman to eradicate the menace. Sleeman launched his legendary campaign between 1831 and 1837 and crushed the thugee forever.
17.16.3 Organised Crime in its present avatar began at Mumbai after independence with the introduction of prohibition, which gave rise to a thriving and lucrative clandestine trade in illicit liquor. Bootlegging not only attracted the covetous attention of hitherto loosely organised street level gangs but also gave rise to syndicate type of illicit activity. Slums are generally regarded as the breeding ground of anti-social elements. These elements, in organization with like minded people, started drug related offences, grabbing of land in towns, cities and Government land in rural areas, boot-legging, immoral trafficking etc. With the passage of time, the anti-social elements could strike terror in an organised manner anywhere, any time, at their own sweet will. The problem was first felt by the Government of Maharashtra, particularly, in and around Mumbai. In order to tackle the feeling of insecurity created by them among the general public, the Government of Maharashtra, in 1981, enacted the Maharashtra Prevention of Dangerous Activities of Slumlords, Bootleggers, Drug-offenders and Dangerous Persons Act, 1981to deal with slumlords who have been taking illegal possession of public or private lands and constructing illegal structures, selling and leasing them out at exorbitant prices, rents, compensation and other charges. Criminal intimidation was the key to their activities and often evicted or threatened to evict the occupiers by force, without resorting to lawful means.
17.16.4 The bootleggers, directly or through their agents, illegally distil, manufacture, transport, sell or distribute liquor, intoxicating drugs and other intoxicants, which have injurious effect on public health and pose a grave danger to the Society. Bootlegging has become a lucrative business and an important source of acquiring tremendous money power, enabling them to hold the community to ransom. 17.16.5 The drug-offenders manufacture, import, export, sell or distribute drugs and cultivate plants for preparing intoxicants in contravention of the provisions of the Narcotic Drugs and Psychotropic Substances Act, 1985. These drug-offenders have been a serious threat to public health and a grave danger to life, as well as adversely affecting the public order.
17.16.6 Further, notorious criminals in illegal possession of arms, including fire arms, ammunitions, explosives and explosive substances, have formed into organised gangs and have been indulging in killings, arson, looting, extortion and other heinous crimes. These gangs have been creating serious problems of public disorder in the country through gangsterism and terrorism. These gangsters operate in nexus with anti-national elements and, with their money power, fund terrorism in the country. It was only a matter of time before the gangs, which took to bootlegging, became larger, more powerful and affluent, as well as influential. The seeds of organised criminal activity sown in Mumbai city, was emulated in different parts of the country. Today, Organised Crime is extensive in its network, often transcending national boundaries, and using the most high-tech communication systems, transport, arms and so on.
17.16.7 The fact that Organised Crime in India is rampant and is on the rise does not require much debate. Extortions, kidnappings for ransom, gun running, illicit trade in women and children, narcotic trade, money laundering, using the hawala network, every conceivable kind of cheating and fraud, bank scams and other forms of organised economic crime not only spreads a sense of insecurity in the mind of a common man but also drains the country of thousands of crores of rupees. What gets reported and investigated by the Law Enforcement Agencies is only a minuscule percentage of the overall quantum of organized criminal activity. Though Organised Crime has originated at Mumbai, its tentacles have spread to other parts of the country. Their vice-like grip over illegal and evil activities of mafia in coal, timber, sandalwood, lottery, real estate, tender, have not received media attention they deserved. However, what has been most disturbing is the inroad Organised Crime has made into the political sphere in the country. Over a period of time, the political ambitions of persons with known criminal background started seeking public and elective offices where once they would hesitated to ask for a ticket for elections from any party. Indian political parties, irrespective of ideological hue and complexion cannot disclaim responsibility for induction of criminals into the election processes. The criminals’ support the political parties in all possible ways to either continue in or to assume power. Politicians not only hire anti-social elements to assist them in elections by booth-capturing or any other subversive means but also to eliminate their rivals. Murders of political workers, activists etc. by political rivals are assuring serious propositions. The bonding between political parties and Organised Crime is complete.
17.16.8 The nexus between crime and politics has permeated so far and wide that the Government established a Committee “to take stock of all available information about the activities of crime syndicates/ Mafia organizations which had developed links with and were being protected by Government functionaries and political parties.” (Vohra Committee Report). The concern by the country over the nexus between criminals, politicians and bureaucrats, visible since 1986 in particular, was activated by the serial bomb blasts of Bombay. The Vohra Committee observed: An organised crime Syndicate/Mafia generally commences its activities by indulging in petty crime at the local level, mostly relating to illicit distillation/gambling/organised satta prostitution in the larger towns. In port towns, their activities involve smuggling and sale of imported goods and progressively graduate to narcotics and drug trafficking. In the bigger cities, the main source of income relates to real estate – forcibly occupying lands/buildings, procuring such properties at cheap rates by forcing out the existing occupants/tenants etc. Over time, the money power thus acquired is used for building up contacts with bureaucrats and politicians and expansion of activities with impunity. The money power is used to develop a network of muscle-power which is also used by the politicians during elections. CBI has reported that all over India crime Syndicates have become a law unto themselves. Even in the smaller towns and rural areas, muscle-men have become the order of the day. Hired assassins have become a part of these organizations. The nexus between the criminal gangs, police, bureaucracy and politicians has come out clearly in various parts of the country. The existing Criminal Justice System, which was essentially designed to deal with the individual offences/crimes, is unable to deal with the activities of the Mafia; the provisions of law in regard to economic offences are weak; there are insurmountable legal difficulties in attaching/confiscation of the property acquired through Mafia activities.
17.17 LEGISLATION TO COMBAT ORGANISED CRIME
17.17.1 The National Security Act, 1980 was enacted by the Parliament to provide for preventive definition, inter alia, for preventing persons from acting in any manner prejudicial to the maintenance of public order. The provisions of the Act are so general in character that it is difficult to bring effectively mobsters engaged in organised crime and their activities within its purview. It is difficult to establish nexus between the activities of these elements and the public order within the meaning of the expression “activities prejudicial to the maintenance of public order”. National Security Act uses the expression “public order” but does not define it.
17.17.2 The Government has referred the question of legislation for confiscation of properties and assets of criminal and mafia elements to the Committee. Affiliate to crime syndicate/mafia gangs grab a large number of properties of helpless individuals by not only deceitful and fraudulent means but also arm-twisting, extortion and threat to life. The uniform pattern is that a criminal, with enormous financial and political clout, intimidates old aged persons, single women and helpless individuals and makes them execute transfer documents of their properties, under duress, after grabbing their premises. Because of wrongful confinement, assault and criminal intimidation, fear and terror is created among victims by using underworld connections resulting in the genuine owners of properties feeling insecure in lodging complaints with law enforcing agencies.
17.17.3 While investigating the cases connected with the properties usurped by a gangster or underworld criminal, the investigation gets hamstrungas it is observed that the existing legal framework (i.e. procedural laws including section 102 of the Code of Criminal Procedure, 1973) is inadequate for seizing/ attaching properties gained under duress or intimidation or fraudulent means. There is no express legal provision akin to Criminal Law (Amendment) Ordinance, 1944 which provides for attachment of illegally acquired properties of public servants. The forefuture of properties of the persons convicted of any offence under that TADA and/or POTA 2002 is provided while NDPS Act provides forfeiture of properties in certain cases. The Special Courts (Trial of Offence Relating to Transactions in Securities) Act, 1992 empowers the Central Government to appoint one or more “custodian” who is authorized to notify any person in the official gazette involved in any offences relating to transactions in securities and any property – movable or immovable or both – belonging to any person so notified stands attached simultaneously with the issue of the notification.
17.17.4 The existing provision in the Code of Criminal Procedure, 1973 empowers a police officer to seize any property which may be alleged or suspected to have been stolen or which may be found under circumstances which create suspicion of the commission of any offence. The expression “property” in the section is without any specificity of being either movable or immovable. Most of the State Governments who have gone in for legislation to deal with situations arising out of the organised crimes have provided for seizure of property thereunder for want of deficiencies in the procedural law. The scope of Sections 102 of the Cr.P.C. empowers a police officer to seize certain properties by taking of actual physical possession of some movable property. The Rajasthan High Court has observed: On a careful reading of Section 102 of the Criminal Procedure Code, it is difficult to hold that this Section empowers a police officer to seize immovable property like plots of lands, residential houses, mountains, rivers, streets or similar properties.
17.17.5 The court arrived at this conclusion due to several reasons. One of the reasons being that no useful purpose was going to be served by the seizure of the immovable properties of the above so far as the pace of the investigation was concerned. It further said that so far as the title to the immovable property was concerned, it was a competent civil or revenue court which was empowered by the law to adjudicate the disputed questions relating to title and that the investigation by the police had nothing to do with the disputes relating to the title to any immovable properties.
17.17.6 The reasons given by the Rajasthan High Court for arriving at the above conclusions are clearly inconsistent with the ground reality in the maintenance of law & order in general. If the police is not competent to seize immovable property during an investigation, it may thwart a just and fair investigation in as much as the investigation may be subverted by the person (s) suspected to be involved in the crime.
17.17.7 Since the Code of Criminal Procedure, 1973 does not contain a specific provision prescribing the procedure for the restraint and confiscation of the proceeds of crime and instruments of crime, absence of law for attachment and confiscation of illegally acquired properties on the same lines as in the TADA, NDPS Act or Special Courts (Trial of Offences Relating to Securities Act), 1992 does hinder investigating agencies. A specific provision in the basic law would be more helpful and effective in dealing with criminals. Therefore, it is recommended that a section may be inserted after section 102 of the Cr.P.C., 1973 and numbered as section 102(A) be introduced in the Code of Criminal Procedure, 1973 broadly providing the following: (i) restraints and confiscation of the procees of crime: definition of instruments of crime, proceeds of crime, seizure/confiscation/attachment etc.); (ii) provision for prescribing powers and the procedures for restraint of the proceeds and instruments of crime; (iii) provision prescribing the procedure for confiscation/seizure/attachment of property; (iv) attachment / confiscation/ seizure of the property and all instruments used for the offence or the proceeds derived from the commission of offences; (v) an application being made to the Court clearly indicating as to why the property is sought to be seized/confiscated/attached. The Code may also provide that a property seized/attached/confiscated would be administered in such manner as a Court may decide pending completion of trial for this purpose and that the District Magistrate or Deputy Commissioner of the area in which the property is located or an officer authorized by him may be designated as Administrator. ————————————————————————————————— 1 Dr. Ayyar, Encyclopedic Law Dictionary 2 Ram Ahuja, Criminology 3 Ibid 4 Howard Abadinsky, The Mafia in America: An Oral History (NY). 5 Albanese Jay, Organised Crime in America (Ohis). 6 Albim Joseph, The American Mafia : Genesis of Legend (NY). 7 Block Alan, East Side-West Side Story: Organising Crime in New York (1930-50). 8 Nair P.M., Combating Organised Crime.
FEDERAL LAW AND CRIMES
18.1 One of the ‘terms of reference’ of this Committee is to examine the feasibility of introducing the concept of “federal crime” which can be put on List I in the Seventh Schedule to the Constitution. The suggestion to declare certain crimes as federal crimes to enable a Central Agency to undertake investigation, without any loss of time, was also referred to the Committee on Police Reforms under the chairmanship of Shri K. Padmanabhaiya. The Committee dealt with this matter in Chapter 17 of their Report.
18.2 The Committee on Police Reforms felt that there was a case for declaring a very few selected categories of cases as federal offences and cautioned that great care and restraint needed to be exercised in identifying those crimes. It suggested the following criteria for the selection of crimes: 1. They have international implications; 2. They relate to the security of the nation (Treason); 3. They relate to the activities of the Union Government; 4. They relate to corruption in All-India Services; 5. Protecting Government currency; 6. Controlling national borders
18.3 The Committee stated that the following categories of crime can be declared as federal crime: (i) Terrorism and organised crime having inter-State and international ramifications; (ii) Crimes in special maritime and territorial jurisdiction of India; (iii) Murder of Head of State, Central Government Minister, Judge of the Supreme Court and internationally-protected persons; (iv) Frauds, embezzlement and cheating in nationalized banks/Central PSUs; Financial institutions; (v) Tax offences involving Union taxes like Income Tax, Customs, Central Excise, etc; (vi) Counterfeit currency; money laundering; (vii) Offences relating to art, treasures and antiquities; (viii) Offences relating to hijacking of aircraft/ships; (ix) Piracy on the high seas; (x) Offences of the Central Government employees under the Prevention of Corruption Act and related sections of the IPC; (xi) Offences by officers of All-India Services under the Prevention of Corruption Act, and related sections of the IPC.
18.4 In examining the concept of Federal offences/crimes and establishment of a Federal Agency investigating those offences/crimes suo moto needs to be examined with reference to the Constitutional Scheme on Relations between the Union and the States. In The Framing of India’s Constitution, it has been observed that “The federal concept in India was not the product of a gradual process of evolution but represented a decision which was somewhat abruptly taken in 1930, as a result of the necessity of including the Indian States within the Indian polity”.
18.5 It also observed that till the commencement of the Government of India Act, 1935, the Government of India was “subject to general and detailed control by Secretary of State for India in responsibility to the British Government and Parliament” (ibid). The distribution of legislative powers and development of Seventh Schedule to the Constitution was discussed by the framers of the Constitution at considerable length. The Government of India Act, 1935 which was culmination of the discussions of the Round Table Conference set up a federal polity in India, with a Central Government and Provinces deriving their jurisdiction and powers by direct devolution for the Crown. However, because of section 126 of the Act the powers of the Central Government were circumscribed by the Governor General “acting in his discretion”.
18.6 The founding fathers of the Constitution listed the various subjects for governance under three Lists, i.e. List I (Union List), List II (State List) and List III (Concurrent List). Under the Union List only the Union Government and under the State List only the State Governments have exclusive powers for legislation. Under the Concurrent List, both the Union as well as the State Governments have jurisdiction to legislate. The principle of Union supremacy in the legislative sphere which underlines articles 246(1) and 254(2) is recognized by most Constitutions which are admittedly “federal”. The Constitution of India, which is sue generis, harnesses the federal principles to the needs of a strong Centre.
18.7 The National Commission to Review the Working of the Constitution examined the Constitutional provisions regarding Concurrent powers of legislation, analysing the constitutional amendments enacted from time to time and judicial pronouncements on major issues arising from concurrency. The Commission observed that, on the whole, the framework of legislative relations between the Union and the States, contained in articles 245 to 254 of the Constitution of India has stood the test of time. In particular, the Commission felt that the Concurrent List, List III in the Seventh Schedule under article 246(2) of the Constitution of India has to be regarded as a valuable instrument for promoting creative federalism that has made a major contribution to nation building. It came to the conclusion that in the Commission’s view there was no ground for change in the existing Constitutional provisions.
18.8 As public order and crime control are the responsibilities of the State Governments, they have to take action maintain tranquility in their respective State. It has been the experience that the local law enforcement agencies, quite often tend to look at the crimes from their own perception and with an objective of crime control in their jurisdiction. In the process, the linkages between ordinary looking crimes and crimes against the State escape scrutiny or even attention. Further, in majority of cases a full picture is not available to the State law enforcement agencies. Even if the larger ramifications are understood, they are evidently not shared with the Central Government and other affected States.
18.9 It has now become necessary to deal with crimes that will undermine the national integrity within overall national security strategy.
18.10 In appreciation of the prevailing situation, suggestions have been made in various fora that the Central Government should play a larger role in internal security matters, particularly investigation of crimes against the State. At present there is no Central Agency which can take up the investigation of crimes having internal security dimensions. The Central Bureau of Investigation does take up important cases on the request of the concerned State Governments. The fact, however, remains that he primary charter of CBI is to deal with corruption cases involving Central Government employees. The CBI has, however, tried to manage criminal cases by creating a separate cell but the pointed attention that is required to be given to this aspect is not feasible in the present structure. Secondly, the CBI does not have original jurisdiction and cannot take up investigation of all cases due to organizational inadequacies. In appreciation of the situation that stares us in the face, there is an imperative need to have a Central Investigating Agency, empowered to take cognizance of crimes against the Indian State. Maharashtra did well to enact legislation exclusively to deal with Organised Crime, which has proved to be extremely effective during the last four years. Andhra Pradesh, Arunachal Pradesh and Karnataka adopted their own legislations on Organised Crime. However, the question remains whether the States be left to have their own legislation or a Central Act be promulgated on the subject. With a view to combating a transnational phenomenon where the likes of Dawood Ibrahim, Tiger Menon, Iqbal Mirchi, all based in foreign countries or operating from international lane of high seas, have to be neutralized. They also quickly capitalize on estranged or hostile diplomatic relations between countries to their advantage to escape the dragnets of law. In this background, a unified framework to deal with Organised Crime, there should be a Central legislation. Also, if it is left to the States to enact their own laws, some of them would do it according to their time-frame and some others may not do so at all. Even if they enact such a law, its efficiency could remain questionable because of the nature of crime being transnational or inter-state or both. To deal with organised crime effectively, investigation has to be conducted with Interpol, letters of request for extradition / deportation of criminals to India have to be processed by Ministry of External Affairs with Foreign Embassies. Barring some States, other States of the Union have yet to legislate upon such a sensitive matter. It would, therefore, be prudent to have a Central legislation, which should provide a uniform legal framework to deal with the problem on a national level keeping in view the national interest. The power of registration and investigation of cases under a Central Act should be conferred on the State Police and follow the legislation only when the States desire will they transfer investigation of cases to Central Investigating Agencies, after due process of law, like giving formal consent u/s 6 of the Delhi Special Police Establishment Act by the State Government and obtaining consent of the Central Government u/s 5 of the Act. Central legislation should also provide adequate platform for international cooperation in consonance with international treaties and conventions.
18.11 Such a system exists in other countries where Federal Governments have a corresponding responsibility in prevention of crimes against the country. In the United States, the Federal Bureau of Investigation (FBI) is entrusted with the responsibility to take cognizance of offences affecting the security of that country and investigate them. The FBI is the Federal Law Enforcement Agency of the United States of America, authorized under law to investigate federal crimes. About 200 crimes are listed in the Charter of FBI. Such a system is not available in this country when the problems facing us are more complicated than those in the United States of America.
18.12 Time has come when the country has to give deep thought for a system of Federal Law and Federal Investigating Agency with an all-India Charter. It would have within its ambit crimes that affect national security and activities aimed at destabilising the country politically and economically. The creation of the Federal Agency would not preclude the State Enforcement Agencies from taking cognizance of such crimes. The State Enforcement Agencies and the Federal Agency can have concurrent jurisdiction. However, if the Federal Agency takes up the case for investigation, the State agencies’ role in the investigation would automatically abate. The State agencies may also refer complicated cases to the proposed Federal Agency.
18.13 The Federal Agency may have concurrent jurisdiction over the following categories of crimes: i) Terrorist activities/war against the State ii) Arms and drug trafficking iii) Hijacking iv) Money laundering v) Crimes related to counterfeit currency vi) Espionage vii) Crimes targeting the national infrastructure.
18.14 It has been the experience that the cases relating to underworld crimes/criminals are complex and there have been serious problems in gathering evidence and getting witnesses. Further these criminals always hire the best legal defence available who exploit every available technical weakness and ploy to secure acquittal. Therefore, it is necessary that cases of terrorism are dealt with in specially constituted federal courts.
18.15 Having agreed on the need for a Central legislation, the next step is to emulate an available ready-made ideal model, like the Maharashtra Control of Organised Crime (MCOC) Act, 1999. It is the result of diligent comparative study of International legislations and has already been tried and tested with adequate success. Special features of the Act are speedy trial by constituting Special Courts and appointing special Public Prosecutors. The Act has adequate safeguards to prevent its misuse, which are as under: i. The Act can be applied only to criminals habitually committing unlawful activities on behalf of or being the members of Organised Crime syndicates, against whom minimum of 2 charge-sheets must have been filed during the preceding 10 years, for offences punishable with imprisonment for 3 years or more, and the courts should have taken cognizance of the said charge-sheets; ii. No offence can be registered, nor any information recorded without prior approval of an officer not below the rank of Deputy Inspector General of Police; iii. Officers not below the rank of Deputy Sp/ACP can only investigate such offences; iv. For filing charge-sheets, prior sanction of an officer not below the rank of Additional DG (Commissioner of Police in Mumbai) is essential v. Punishment is also prescribed for public servants failing to discharge their duties under the Act.
18.16 Since its enactment in 1999, 43 cases have been registered under MCOC Act, of which 33 have been charge-sheeted. Of these, 6 cases have already ended in conviction. The first, and one of the most important cases, which ended in conviction, related to an incident in which the gangsters of Chhota Shakeel gang made an unsuccessful attempt on the life of Shri Milind Vaidya, ex-Mayor of Mumbai and sitting Corporator of Shiv Sena, by indiscriminately firing from sophisticated fire arms, including AK-56 rifle. Of 9 gangsters arrested, 8 were chargesheeted and 1 was discharged for want of evidence. Trial of the case concluded within 1 1/2 year from the date of its registration and ended in conviction. Three accused were sentenced to death, 1 was imprisoned for life and 2 others sentenced to undergo 10 years’ rigorous imprisonment. In addition, the accused were imposed a collective fine to the tune of Rs. 1.5 crore.
18.17 However, going by the experience of the Maharashtra Police in enforcing MCOC, 1999, the proposed Central Act could be made more effective by the amendments to section 2(1) (e) and 2(1)(d) to specify that those who commit offences like extortion, abduction and kidnapping for ransom, contract killing, smuggling of contraband goods, collection of protection money, hawala transactions, are liable to attract the provisions of the Act and in the case of acquittal for want of proof a lack of evidence in the charge sheet filed earlier, such a chage sheet should be taken into account to make a base under section 2(d). Section 3(4) needs amendment to define to identify a member of any gang to prove as to who is the member and who is not. Provisions relating to authorisation of interception of wire, electronic or oral communication needs to be re-examined in the light of the Bombay High Court judgment of 5 March 2003.
TERRORISM
19.1 The genesis of terrorism, as a global problem, is attributed to development of political situation in the World in late 60s. However, it is not a modern phenomenon as it has been in existence since the days of ancient Greece, in medieval Italy and in the 20th Century. The origin of the present day terrorism can be traced to the Sinai War of June 1967 when in a few days Israel decimated the armed forces of some of the Middle East countries and occupied large tract of their land. The Arab world has since then been simmering with anger and rage leading to the beginning of “contemporary wave of terrorism” in the Middle East in 1968. The first manifestation of moving away from the conventional war and confrontation between the Israeli and the Arab was the seizure of an American Airline by a Palestinian sympathizer. Terrorism is no longer a technique of protest but has become a global apparatus to challenge the number one superpower in the unipolar world. What had not been reckoned earlier was the way in which religion was to become enmeshed with the political aspiration.
19.2 DEFINITION OF TERRORISM
19.2.1 It stands to reason that in order to combat an evil, its nature must be explained in an acceptable definition. It is extremely difficult to offer a precise and objective definition of terrorism which can be universally acceptable. There are several reasons for this, namely: (i) Terrorism takes different forms: although it is usually equated with political subversion; (ii) The criteria for defining the term ‘terrorism’ is generally subjective since it is mainly based on political considerations and is often employed by Governments; (iii) It is used as an instrument of syndicated crime; (iv) Above all, terrorism is prompted by a wide range of motives, depending on the point in time and the prevailing political ideology.
19.2.2 While discussing terrorism, it is difficult to define “terrorism”, as, during the last 40 years the forms of terrorism have undergone metamorphose. However, one of the earliest definitions in the 20th century which comes to mind is the one given in Article 1 of the League of Nations Convention on Terrorism, 1937 which defined it as “criminal acts” directed against a State and intended or calculated to create a state of terror in the minds of particular persons, or a group of persons or the general public. {UN Secretariat Study on Terrorism, UN Doc A/C.6/418, Annexe I }. This definition has also undergone a change as terrorism is seen to be about power – as a means to political power with full control of State authority. There has been a good deal of debate on the desirability of having a comprehensive definition as new trends and dangers have been revealed. This definition could be general or enumerative or mixed or whether it should be confined to individual and group terrorism or cover State terrorism as well and whether it should exempt the struggles for self-determination from its scope or embrace all situations alike
19.2.3 Dr. Justice A.S. Anand (as he was then) delivering the judgment in H.V. Thakur vs. State of Maharashtra has perceptively dealt with the definition of terrorism. He observed that: Terrorism is one of the manifestations of increased lawlessness and cult of violence. Violence and crime constitute a threat to an established order and are a revolt against a civilized society. “Terrorism” has not been defined under TADA nor is it possible to give a precise definition of “terrorism” or lay down what constitutes “terrorism”. It may be possible to describe it as use of violence when its most important result is not merely the physical and mental damage of the victim but the prolonged psychological effect it produces or has the potential of producing on the society as a whole. There may be death, injury, or destruction of property or even deprivation of individual liberty in the process but the extent and reach of the intended terrorist activity travel beyond the effect of an ordinary crime capable of being punished under the ordinary penal law of the land and its main objective is to overawe the Government or disturb harmony of the society or “terrorise” people and the society and not only those directly assaulted, with a view to disturb even tempo, peace and tranquility of the society and create a sense of fear and insecurity. A ‘terrorist’ activity does not merely arise by causing disturbance of law and order or of public order. The fall out of the intended activity must be such that it travels beyond the capacity of the ordinary law enforcement agencies to tackle it under the ordinary penal law. Experience has shown us that “terrorism” is generally an attempt to acquire or maintain power or control by intimidation and causing fear and helplessness in the minds of the people at large or any section thereof and is a totally abnormal phenomenon. What distinguishes ‘terrorism’ from other forms of violence, therefore, appears to be the deliberate and systematic use of coercive intimidation. More often than not, a hardened criminal today takes advantage of the situation and by wearing the cloak of “terrorism”, aims to achieve for himself acceptability and respectability in the society because unfortunately in the States affected by military, a ‘terrorist’ is projected as a hero by his group and often even by the misguided youth.
19.2.4 From the above, it is seen that the definition (of terrorism) has eluded and has haunted countries for decades. The first attempt to arrive at an acceptable definition under the League of Nations was stillborn.
19.2.5 If “terrorism” by nature is difficult to define, acts of terrorism conjure emotional responses in those affected by it or after its effects. The old adage, “one man’s terrorist is another man’s freedom freedom fighter” is being practiced by Pakistan and other countries. The Federal Bureau of Investigation has been using several definitions of terrorism which have been quoted in Arijit Pasayat, J. in his judgement in Devender Pal Singh vs. State of N.C.T. of Delhi & Anr. The definitions quoted therein are road-maps to understanding “terrorism” and terrorist activities: Terrorism is the use or threatened use of force designed to bring about political change. Brian Jenkins Terrorism constitutes the illegitimate use of force to achieve a political objective when innocent people are targeted. Walter Laqueur. Terrorism is the premeditated, deliberate, systematic murder, mayhem, and threatening of the innocent to create fear and intimidation in order to gain a political or tactical advantage, usually to influence an audience. James M. Poland Terrorism is the unlawful use or threat of violence against persons or property to further political or social objectives. It is usually intended to intimidate or coerce a Government, individuals or groups or to modify their behaviour or polities. Vice-President’s Task Force Terrorism is the unlawful use of force or violence against persons or property to intimidate or coerce a Government, the civilian population, or any segment thereof, in furtherance of political or social objectives. FBI 19.2.6 Notwithstanding the difficulties which militate against providing a universally acceptable definition of the term, terrorism encompasses use of violence of threat for acts directed against a country or its inhabitants or violation of law and calculated to create a state of terror in the minds of the Government officials, an individual or a group of persons, or the general public at large. This process could be an individual-oriented but more than often it is organised groups which embark on a journey of violence and quite occasionally mayhem. The International Law Commission concluded that the following categories constitute terrorist acts: (i) Any act causing death or grievous bodily harm or loss of liberty to a Head of State, persons exercising the prerogatives of the Head of State, their hereditary or designated successors, the spouse of such persons, or persons charged with public functions or holding public positions when the act is directed against them in their public capacity. (ii) Acts calculated to destroy or damage public property or property devoted to a public purpose. (iii) Any act likely to imperil human lives through the creation of a public danger, in particular the seizure of aircraft, the taking of hostages and any form of violence directed against persons who enjoy international protection or diplomatic immunity. (iv) The manufacture, obtaining, possession or supplying of arms, ammunition, explosives or harmful substances with a view to the commission of a terrorist act.
19.2.7 The acceptability of violence in a society is key to whether terrorism is perceived to be a valid form of protest and thus closely linked to the level ofsupport a group can hope to receive from their society at large. This does not necessarily suggest that, if support is lacking, terrorists will renounce violence because it is counter-productive. Part of their problem is that terrorist organisations often have difficulties in moving away from violence.
19.2.8 Terrorism, as an effective weapon, has since appeared as a serious challenge to the world order and cannot be overlooked or washed away. In the words of Dr. R. Venkatraman, the former President of India, the response to this “spectrum of challenges” has to be “multi-dimensional”. In his inaugural address at the 21st Annual Conference of the Indian Society of International Law, he underlined the “need to mobilize the processes of ratiocination that have taken the shape of legal enquiry”. He said that “lego-philosophic minds can arrest the world in so arranging or ordering human affairs as to make them consistent with the evolution of collective human thought. What is involved in the process is not just the maintenance of the powers of the States or “order” but “order” with “law”. Within the boundaries of a State the balance is not so difficult to maintain. But in trans-national affairs, the task becomes difficult”.
19.2.9 The globalisation of terrorism, or organised violence, in contrast to conventional war, is the one which concerns the world. The acts of terrorism, whatever be the purpose, are aimed at creating an atmosphere of fear, apprehension and destabilize the security systems apart from disturbing the existing social order. The very fact that acts of terrorism are well orchestrated by motley group of persons because of their perceived grievances or their anger against “targets chosen for their power and importance aimed at paralysing Government concerns”. Terrorism has also been described as a proxy war, both stealthy and clandestine.
19.3 PAKISTANI LINK WITH INTERNATIONAL TERRORISM
19.3.1 During the period post September 11, 2001 investigations by American authorities have unravelled the intricate network of terrorists. They have once again revealed, how Pakistan and its proxies, had emerged as a center for terrorist training for diverse groups and the inter-linkages between these groups facilitated by availability of Pakistani territory. The main revelations have come primarily from investigations into terrorist modules in South East Asia with direct or indirect links to Al Qaida and with the participation of Pakistanis or the use of the territory of Pakistan. One of the most dangerous “minds” and terrorists is Khalid Shaikh Mohammed, a Pakistani, a radical Jihadist on a mission to destroy America. He was as “architect” of the September 11 attacks [Newsweek: 22.9.02]. There was a colossal failure of intelligence agencies in the North America and Europe as the terrorists used resources and facilities to plan and execute acts of unprecedented violence by using airlines. Some key conspirators in the Al Qaida attacks are still missing. The long shadow war has just begun irrespective of whether Osama Bin Laden is alive or dead while the powerful collaborator Saad Bin Laden [Osama’s son] with Khalid Shaikh Mohammad is pursuing the family business of real estate.
19.4 PAKISTAN’S PROXY WAR AGAINST INDIA
19.4.1 Paksitan has always considered the partition of 1947 incomplete as, according to the Muslim League concept of two-nation theory, Jammu & Kashmir State was the main focus. It has made repeated attempts, though in vain, to annex the State – first by pushing in “Kabailis” with the active support of regulars, followed by three wars and an impudent intrusion in Kargil in 1999. Each time the Indian nation has given them a befitting response.
19.4.2 Pakistan has not given up on Kashmir because its very existence depends on keeping up a confrontation with India. It has, accordingly, continued with the dispute one way or the other. The late Zulfiquar Ali Bhutto first led Indira Gandhi into signing the Shimla Agreement in the way he wantedit and reneged on it soon after the return to Pakistan. Not only he resiled from the bi-lateral Shimla Agreement but threatened “thousand year war” against India. From 1973 till the time he was deposed from political power, Bhutto encouraged ISI to foment trouble in India from Punjab to the North East.
19.4.3 Since Pakistan found that it was making no headway in military confrontation or cover war, it launched a proxy war against India. It was discovered when the first batch of Pak-trained youth was arrested in September 1986 and the first Pak-trained militant, Aijaz Dar, was killed in an encounter on 18 September of that year.
19.4.4 The sentiments of disgruntled youth in J&K have been exploited. As a consequence, Pakistan trained youth in subversive activities and equipped them with sophisticated weapons. They were infiltrated in J&K to foment trouble. With the fall in initial local support and pressure mounted by the security forces during the early nineties, a new feature was introduced. This was systematic induction of foreign mercenaries to prop-up the so-called ‘jehad’. Pakistan embarked on a virtual war by pushing in Pakistani and foreign mercenaries into the State. Today what India facing in Jammu & Kashmir is not insurgency or indigenous militancy but a clandestine or proxy war by Pakistan which is the epicenter of terrorism. Pakistan was desperate to keep the military pressure on when it found number of incidents and civilian killings reducing and, therefore, the overall security scenario in 1999 assumed a new dimension when Pakistan attacked India across Kargil. It was, however, counter-productive as Pakistan’s reverses in Kargil, made it more desperate. ISI through the pro-Pakistani terrorist outfits have since then been desperately trying to step up violence with a focus on demonstrative actions to destabilize the security forces and create communal divide and by inducting more foreign mercenaries. Usages of suicide squads for stepping up violence were also resorted by the terrorists’ outfits. The militants, aided and abetted by Pakistan ISI, have caused enormous damage to the Kashmiri people and its economy. The Kargil intrusion changed the complexion of the low intensity war by the Pakistan and its official agency ISI. They embarked upon a well-planned operation using a mix of hardened and well-trained foreign mercenaries.
19.5 CROSS BORDER TERRORISM – INVOLVEMENT OF PAKISTAN
19.5.1 It is estimated that a large number of foreign mercenaries has been operating in J&K, at any given point of time, who have been pushed in by Pakistan to sustain and retain control on the flagging militancy in the State. These mercenaries belong mainly to Pakistan, POK and Afghanistan. However, there are instances of terrorists from countries like Lebanon, Bahrain, Bangladesh, Sudan, Egypt, Alergia, Uzbekistan and Nigeria operating in J&K, which highlight the alarming role being played by Pakistan as an epicenter of global terrorism. They train them as terrorists not only for infiltration into Kashmir and other parts of the India but also for export of terrorism to other parts of the world in the name of “jehad”.
19.5.2 The terrorists continue to attack vulnerable targets including members of minority Hindu community and political activists. Some reprehensible attacks by terrorists were witnessed during 2001-2002. They kidnapped, indulged in indiscriminate killing, bombed Stated Legislative Assembly in Srinagar, killing Army personnel, including women and children, and attacking at the Raghunath temple in Jammu city.
19.6 ANTI-TERRORISM LAW
19.6.1 In the background of need to combat escalating and disruptive activities posing a serious threat to the integrity of the country, the Terrorist and Disruptive Activities (Prevention) Act, 1985 was enacted on 23 May 1985 initially for a period of two years applicable to Punjab only. However, in the context of continued terrorist violence and disruption in the country, a fresh legislation was enacted with special provisions for prevention of, and for coping with, terrorist and disruptive activities and matters connected therewith and incidental threats. The Act was extended through amendments in 1989, 1991, 1993 and finally expired on May 23, 1995. In the overall view of security environment in the country, a replacement legislation was considered necessary. The spread of tentacles of terrorism to other parts of the country, on one hand, the acquisition of men and material [ranging from sophisticated weapons, remote central devices, rocket-launchers etc.] on the other, the new dimension called for a new legislation to deal with the situation. Before the expiry of the said Act, the Criminal Law Amendment Bill, 1995 was introduced in the Rajya Sabha on 18 May 1995.
19.6.2 Terrorist and Disruptive Activities (Prevention) Act, 1987 contained the following features:- 1. Section 3 (1) of the Act provides for definition of a terrorist act. This section provides that whoever with intent to overawe the Government as by law established or to strike terror in the people or any section of the people or to alienate any section of the people or to adversely affect the harmony amongst different sections of the people does any act or thing by using bombs, dynamite or other explosive substances or inflammable substances or fire-arms or other lethal weapons or poisons or noxious gases or other chemicals or by any other substances of a hazardous nature in such a manner as to cause, or as is likely to cause, death of, or injuries to, any person or persons or loss of, or damage to, or destruction of, property or disruption of any supplies or services essential to the life of the community, or detains any persons and threatens to kill or injure such person in order to compel the Government or any other person to do or abstain from doing any act, commits a terrorist act. 2. Whoever commits a terrorist act if such act is resulted in death of any person be punishable with death or imprisonment for life and shall also be liable to fine. In any other case, the punishment is imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life and shall also be liable to fine. 3. TADA provides for minimum punishment of five years and maximum of imprisonment of life for conspiring to commit or knowingly facilitating the commission of terrorist act. 4. Whoever harbours or conceals any terrorist was to be punished with imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life and shall also be liable to fine. 5. Punishment for disruptive activities was imprisonment for a term which shall not be less than five years but which may extend to imprisonment for life. 6. Disruptive activities mean any action taken whether by act or by speech or through any other media which intent to disrupt sovereignty and territorial integrity in India. 7. TADA also provided for minimum punishment of five years and maximum of imprisonment for life for possession of certain unauthorized arms. 8. It provided for forfeiture of property persons convicted of any offence punishable under the Act. The Act enabled the Central Government or a State Government to constitute one or more designated court for particular area or for such cases or group of cases. 9. The Act also gave power to the designated court try any other offence with which the accused may be charged at the same trial if the offence is connected with such other offence. 10. Under the TADA a designated court was to take cognizance of any offence without the accused being committed to it for trial upon receiving the complaint for a police report. 11. There was a special provision for summary trial of offences punishable with imprisonment for a term not exceeding three years. 12. TADA provided that a confession made by a person before a police officer not lower in rank than a Superintendent of Police was to be admissible for the trial of such person for an offence under the Act. 13. It provided that trial of any offence by a designated court should have precedents over the trial of any other case against the accused in any other court.
19.6.3 There was considerable criticism against the misuse of the provisions of the Act by the National Human Rights Commission, Minorities Commission, International Human Rights Organisations like Amnesty International and International Natural of Jurists on basically the following charges: i. Innocent persons being proceeded against or arrested under the Act; ii. Confession to the Police being admissible under the Act which was odious to the established procedures of criminal justice; iii. Minorities being targeted under the Act; iv. Bail was not easily obtainable as the provisions of Bill in the Act were illusory; and v. Burden of proof was on the accused.
19.6.4 While deciding the constitutional validity of the provisions of the Terrorist and Disruptive Activities (Prevention) Act, 1987, the Supreme Court has, in its judgment in Kartar Singh Vs. State of Punjab, Judgments Today 1994 (2) SC 423 at 494, laid down the following guidelines so as to ensure that the confession obtained in the pre-indictment interrogation by a police officer not lower in rank than a Superintendent of Police is not tainted with any vice but is in strict conformity of the well recognised and accepted aesthetic principles and fundamental fairness. i. The confession should be recorded in a free atmosphere in the same language in which the person is examined and as narrated by him; ii. The person from whom a confession has been recorded under section 15(1) of the Act, should be produced before the Chief Metropolitan Magistrate or the Chief Judicial Magistrate to whom the confession is required to be sent under Rule 15(5) along with the original statement of confession, written or recorded on mechanical device without unreasonable delay; iii. The Chief Metropolitan Magistrate or the Chief Judicial Magistrate should scrupulously record the statement, if any, made by the accused so produced and get his signature and in case of any complaint of torture, the person should be directed to be produced for medical examination before a Medical Officer not lower in rank than of an Assistant Civil Surgeon; iv. Notwithstanding anything contained in the Code of Criminal Procedure, 1973, no police officer below the rank of an Assistant Commissioner of Police in the Metropolitan cities and elsewhere of a Deputy Superintendent of Police or a Police Officer of equivalent rank, should investigate any offence punishable under this Act of 1987; v. The Police Officer if he is seeking the custody of any person for pre-indictment or pre-trial interrogation from the judicial custody, must file an affidavit sworn by him explaining the reason not only for such custody but also for the delay, if any, in seeking the police custody; vi. In case, the person, taken for interrogation, on receipt of the statutory warning that he is not bound to make a confession and that if he does so, the said statement may be used against him as evidence, asserts his right to silence, the police must respect his right of assertion without making any compulsion to give a statement of disclosure.
19.6.5 Besides, while upholding the validity of sections 16, 19 and 20(3) of the Act, the Supreme Court made certain observations, emphasizing the desirability of supplementing the law by making provisions therein.
19.6.6 Section 16(2) and (3) empowering the Designated Court to take measures for keeping the identity and address of witnesses secret, was assailed on the ground that these provisions turn a trial under the provisions of TADA into a farce. In reply, it was contended that the Legislature merely regulated the right to fair trial and the right of the accused to effectively defend himself keeping in view the requirements of the situation prevailing in terrorists affected areas where the witnesses were living in a reign of terror and were unwilling to depose against the terrorists in courts for fear of retribution or reprisal. While upholding these provisions in view of the extraordinary circumstances, the Supreme Court observed:- Therefore, in order to ensure the purpose and object of the cross examination, we feel that as suggested by the full Bench of the Punjab and Haryana High Court in Bimal Kaur, the identity, names and addresses of the commences; but we would like to qualify it exception that it should be subject to an exception that the Court for weighty reasons in identity and addresses of the witnesses especially of the potential witnesses whose life may be in danger.
19.6.7 As regards section 19 of the Act, the Supreme Court adverted to some of the practical difficulties based on which the validity of this section was assailed and how these could be removed so that the Parliament may take note of them and devise a suitable mode of redress by making the necessary amendments in the appeal provisions. In this regard, the following observation made by the Supreme Court can be referred to. This predicament and practical difficulty, an aggrieved person has to suffer can be avoided if a person who is tried by the Designated Court for offences under the TADA but convicted only under other penal provisions, is given the right of preferring an appeal before the next appellate court as provided under the Code of Criminal Procedure and if the State prefers an appeal against the acquittal of the offence under the provisions of TADA than it may approach the Supreme Court for withdrawal of the appeal or revision, as the case may, preferred by such person to the Supreme Court so that both the cases may be heard together.
19.6.8 As regards section 20(3) and 4(a) empowering the Executive Magistrate and Special Executive Magistrate to record confessions or statements and authorizing the detention of accused, it was contended that it was against the very principle of separation of judiciary from the executive enunciated in article 50 of the Constitution and therefore bad under articles 14 and 21 of the Constitution. Negating this contention, the Supreme Court observed as follows: Though we are holding that this Section is constitutionally valid, we, in order to remove the apprehension expressed by the learned Counsel that the Executive Magistrates and the Special Magistrates who are under the control of the State may not be having judicial integrity and independence as possessed by the Judicial Magistrates and the recording of confessions and statements by those Executive Magistrates may not be free from any possible oblique motive, are of the opinion that it would be always desirable and appreciable that a confession or statement of a person is recorded by the Judicial Magistrate whenever the Magistrate is available in preference to the Executive Magistrates unless there is compelling and justifiable reason to get the confession or statement, recorded by the Executive or Special Executive Magistrates.”
19.7 CHALLENGE TO TADA: SHAHEEN WELFARE ASSOCIATION VS. UNION OF INDIA
19.7.1 In a Writ Petition on TADA – Shaheen Welfare Association vs. Union of India and others, the Supreme Court observed as follows :- (i) Deprivation of the personal liberty without ensuring speedy trial would not be in-consonance with the right guaranteed by article 21 of the Constitution. Of course, some amount of deprivation of personal liberty cannot be avoided in terrorist cases, but if the period of deprivation, pending trial, becomes unduly long, the fairness assured by article 21 would receive a jolt. The Court also observed that after the accused persons have suffered imprisonment which is half of the maximum punishment provided for the offence, any further deprivation of personal liberty would be violative of the fundamental right visualized by article 21. (ii) The Court observed that while it is essential that innocent people should be protected from terrorists, it is equally necessary that terrorists are speedily tried and punished. It also causes irreparable damage to innocent persons who may have been wrongly accused of the crime and are ultimately acquitted but to remain in jail for a long period pending trial because of the stringent provisions regarding bail under TADA. (iii) The proper course is, therefore, to identify from the nature of the role played by each accused person, the real hardcore terrorists or criminals from others who do not belong to that category and apply the bail provision strictly in so far as the former class is concerned and liberally in respect of the later classes. (iv) When stringent provisions have been prescribed under an Act such as TADA for grant of bail and a conscious decision has been taken by the legislature to sacrifice to some extent the personal liberty of an under trial accused for the sake of protecting the community and the nation against terrorists and disruptive activities or other activities harmful to society. It is also necessary that investigation of such crimes is done efficiently and adequate number of designated courts are set up to book persons accused of such serious crimes. This is the only way in which society can be protected against harmful activities. This would also ensure that persons ultimately found innocent are not unnecessarily kept in jail for long periods.
19.8 PREVENTION OF TERRORISM ACT, 2002
19.8.1 TADA lapsed on 23 May, 1995. However, taking into account the terrorist activities of various groups in several parts of the country and the fact that some of these groups are sponsored by foreign elements. The Government came to the conclusion that alternative law to effectively deal with terrorism is necessary. Pursuant to this, the Government enacted another Act namely, the Prevention of Terrorism Act (POTA).
19.8.2 The essential points of difference between TADA and POTA are: (i) Provisions allegedly misused / likely to be misused, are deleted from the new legislation; (ii) Section 5 of TADA Act, which had made unauthorized possession of arms in a notified area, an offence, is deleted. The Arms Act, amended already, provides for a deterrent punishment for possession of certain classes of unauthorized arms. Therefore, the need to repeat the provisions in the new legislation was not felt. Further, this section is the one which is alleged to have been most misused; (iii) Section 15 of the TADA Act, which had provided that confessions made to a Police Officer was admissible in evidence. This was against the grain of the normal provision of the Evidence Act where statements made to the police are not admissible as evidence. In the new Act certain safeguards have been incorporated; (iv) Section 21(1)(c) and (d)of the old TADA Act had laid down certain presumptions relating to confessions. This section had provided that if it was proved that one of the accused had made a confession that the other had committed the offence, it was to be presumed that the other (accused) had committed the offence. It also provided that if it was proved that an accused had made a confession to any person even other than a police officer, it was to be presumed that he had committed such an offence. Since there were allegations that these provisions had been misused, these are not reflected in the new law. (v) Section 20(8)(b) had provided that a Court shall not grant bail unless it was satisfied that there are reasonable grounds for believing that the accused was not guilty of an offence under TADA. This provision had made it extremely difficult to obtain bail in TADA cases. No such provision has been made in the new law.
19.9 SAFEGUARDS 19.10.1 Under TADA Act, an appeal from the designated court/lay to the Supreme Court. It was argued that under Indian conditions, with prevailing poverty, it is difficult for people to approach straightaway the Supreme Court. In the new legislation, an appeal is being provided to the High Court.
19.10.2 As suggested by the Supreme Court, a provision has been made that investigation in the cases relating to terrorism and disruptive activities should be done by an officer not lower in rank than that of an Assistant Superintendent of Police or equivalent officer. This would reduce the misuse substantially.
19.10 SALIENT FEATURES OF POTA
19.10.1 (i) Instead of being made a permanent feature under law, a time limit of 3 years has been prescribed for the proposed Bill. (ii) To have a sharper focus, the word “disruptive activity” was substituted by “disruptive act”. (iii) Keeping in view the possibility of misuse of the provisions even for petty communal disturbances” or to alienate any section of the people or to adversely affect the harmony amongst different sections of the people” have been deleted. (iv) The concept of knowledge was brought in for culpability relating to “Whoever harbours or conceals, or attempt to harbour or conceal any person knowingly that such person is a terrorist”. (v) Similarly the concept of knowledge was brought in for offences relating to disruptive activities and it was incorporated “Whoever harbours or conceals, or attempts to harbour or conceal any person knowingly that such person is disruptionist”. Further, clause 4(3)(b) relating to “Whoever predicts, prophesies or pronounces or otherwise expresses in such a manner as to incite, advise, suggest or prompt, the killing of” has been deleted as it was felt that the construction is much too wide, and, could be misused. (vi) The Review Committees both for the Centre as well as the States have been provided with a statutory base and it has been provided that a Judge of the High Court should be its Chairman. (vii) Apart from reviewing the cases pending under POTA these Review Committees will also review the cases under old TADA Act.
19.10.2 From a comparative analysis of POTA and the American Law, it is seen that POTA is in some way less stringent than the American Act. While the “Terrorist Act” defined under section 3 of POTA prescribes punishment for an over an act with a specific intention for a terrorist activity as a punishable offence where as American Act on terrorism act on counter terrorism provides punishment to a person even when he is likely to engage in terrorist activities.
19.10.3 The American definition of terrorism is far more comprehensive in as much as (i) hijacking or sabotage, (ii) seizing or detaining, (iii) threatening to kill or injure or to continue to detain another individual to compel a third person including the Government organizations to do or abstain from doing any act as conditions of release of the individual detained; and (iv) use of biological or nuclear agent, is expressly included in the definition of terrorism.
19.10.4 Information on potential targets is included as terrorist’s activity in American law. Transportation or communication of false documents or identification or of weapons is expressly included as terrorist activity.
19.10.5 Soliciting, funding for terrorism or even soliciting the membership of terrorist organizations is amongst terrorist’s activity regardless of its other legitimate activity.
19.10.6 Terrorists Organisation is defined as an organisation, which by itself or through a group engages in terrorist’s activity regardless of its other legitimate activity.
19.10.7 U.S. Statute makes it an offence to carry weapons or explosives on board on aircraft an offence punishable by 15 years. (section 104)
19.10.8 U.S. Statute makes the act of transfer of explosive material, knowing or having reason to believe that such explosive material will be used to commit a crime of violence punishable by 10 years.
19.10.9 The U.S. Act provides for removal of aliens on an application made before the Special Curt designated with the certification of the Attorney General that the aliens would pose a risk to national security. The Special Court has been permitted under section 503(B) and (C) of Title (V) to consider the classified information submitted in camera and ex parte make the determination with regard to the release of the aliens pending hearing. The conditions for release are similar to section 20(8) of TADA Act 1987 which has been considerably diluted under POTA.
19.10.10 The U.S. Statute makes specific provision for funding for terrorist related cases for various agencies like the FBI, Customs Services, Drug Enforcement, Department of Justice, Department of Treasury (Sections 521- 527). Such provision for additional funding for creation of additional infrastructure for investigation and trial of terrorist cases does not pose an unplanned additional burden on the over burdened judiciary and other related agencies, which have to deal with the problem of terrorism.
19.10.11 The U.S. Act makes comprehensive provision for assistance and compensation to the victims of terrorism and designates funds for the purpose. Such a provision in the Bill will standardize and streamline machinery for compensation of victims of terrorist crimes.
19.10.12 The penalties prescribed for various terrorists’ offences are similar or more stringent in the American Law compared to the Indian Act.
19.10.13 Prior to 1990, India had had put in strong measures, in separate legislations to deal with smuggling, narcotics, foreign trade violation, foreign exchange manipulations, as also legal provisions for preventive detention and forfeiture of property to tackle such serious crimes. However, the draconian Foreign Exchange Regulation Act, 1973 (FERA), was repealed, the Government contemplated making a law to prevent money laundering but the Prevention of Money Laundering Bill, 1998 did not materialize with FEMA and there has been much laundering of money in the last 3 years. The new legislation defines the offence of money laundering, as underlines with international practices, as crime which in turn is considered to be in property or value of such property derived as a result of criminal activity relating to a schedule offence. The act has two parts and deals with sections 121 and 121A of the Indian Penal Code and several offences under the narcotics, drugs and Psychotropic Substances Act, 1985. The monetary limit has been prescribed which was not provided for in the original 1998 money laundering Bill. This offence now include murder, extortion, kidnapping, robbery and dacoity, forgery of security, counterfeiting currency and bank notes, Prevention of Arms Act, Wild Life Protection Act, 1972, trafficking of women and offences under the Prevention of Corruption Act, 1988. The illegal practices in international trade are the first and foremost sources of illegal money which is manipulated through value, quantity and description of traded consignments. Though there has been criticism about the strength of the Prevention of Money Laundering Act, it still falls short of similar laws in the western world, particularly United States and the European Union. What is required is that the new law, in the present shape must be enforced with greater rigour. Clearly the prevention of money laundering is essential for safeguarding internal security. Given the close nexus between drug trafficking, organised crime and terrorism it is essential to improve the effectiveness of the law by providing sufficient resources on military and paramilitary forces and to create and to strengthen the existing cadre, or better create a new cadre of experts to deal with groups of crime which finance terrorism. An effective coordination agency with wide powers would be necessary on the lines suggested by the Vohra Committee in the Report on Criminalisation of Politics.
19.11 MONEY LAUNDERING, DRUG TRAFFICKING, NARCO-TERRORISM AND FLOW OF FOREIGN FUNDS
19.11.1 The role of money laundering in promoting both terrorism and the organised crime was recognized in recent years but adequate attention to eliminate it was not given. While the western world has become wiser after several terrorist attacks, the developing countries have been the arena for the “game” for long time. The debilitating and far reaching effect of turning a Nelsons eye to it has acted as a multiplier effect for promoting fraud, corruption, the seepage of organised crime and acts of terrorism which have taken their toll on economic development. The operators’ vice-like grip on the system of money laundering has to be dealt with firmly with stringent and deterrent punishments.
19.11.2 The prevention of money laundering is essential for safeguarding internal security. Given the close nexus between drug trafficking, organized crime and terrorism, it is also necessary to improve the effectiveness of the Narcotics Control Bureau.
19.11.3 The funds generated through illegal means may sometimes find their way into the country through legal channels, for ostensibly supporting activities covered under the Foreign Contributions Regulation Act (FCRA). The end use of these funds be watched with diligence. Although it may be desirable to check the done accounts under the FCRA thoroughly cent percent check of these accounts may be unmanageable and expensive exercise. A proposal has been mooted to replace the FCRA with a new Act, under which registration and monitoring of the recipients of foreign contributions would be done at the district level. It is also proposed to involve the banks as an independent channel of data collection and monitoring. Police on the receipt of foreign contribution in border and coastal areas, as well as by religious organizations be strengthened in such a way that funds are not misutilised for anti-national activities. The new law must arm the Government with power for control over the recipients of foreign contribution without compromising with human rights or civil liberties.
19.12 STRENGTHENING THE STATE POLICE 19.12.1 It is also necessary to take steps, in consultation with the State Governments to identify factors responsible for weakening the functioning of the State police forces. The morale of the Police Forces must be raised by professional support in operational matters as also policies in regard to promotions, transfers and tenures of police officers. The existing Police Act must be replaced expeditiously by a new Police Act. _____________________________________________ BIBLOGRAPHY 1. Christographer C. Harmon, Terrorism Today. 2. Gavin Cameron, Nuclear Terrorism A Threat Assessment for the 21st Century. 3. K. P. S. Gill, Terror and Containment Perspectives of India’s Internal Security. 4. K. R. Gupta, Anti-Terrorism Laws India, The United States, The United Kingdom and Israel (Vol.I & II). 231 5. K. Santhanam Sudhir Sreedhar, Manish Saxena, Jihadis in Jammu and Kashmir. 6. Ram Ahuja, Criminology. 7. Rohan Gunaratna, Inside Al Qaida, Global Network of Terror. 8. Omer Yousif Elagab, International Law, Documents Relating to Terrorism. 9. S. Malik, Encyclopaedia of Terrorist Law. 10. Sunil Sondhi, Global Terror. 11. Annual Reports of Ministry of Home Affairs (From1998-99 to 2002-03). 12. Aakrosh: Vol.6. No.18.
ECONOMIC CRIMES
20.1 In the earlier centuries, economies were simple and so were economic crimes. In the last century, with the emergence and complexity of industry and modern capitalism, economic crimes have increased in number and complexity. More recently with the far-reaching recent changes in technology and the emergence and change in the institutions and in the organisation of the economic system, there has been a dramatic increase in the numbers and the cost of economic crime. There has always been a public tendency to focus on conventional crimes, especially violent ones, and except for occasional cases such as the Harshad Mehta, Ketan Parekh and the Indian Bank scam (of over Rs.800 crores), most economic crimes go insufficiently noticed, though their impact in terms of financial loss to the Society and in terms of eroding the credibility as well as the stability of the economic system is significant. With the fast pace of advances in technology (and the Internet), that are changing the way in which Government and Businesses operate and with quicker decisionmaking, the impact is increasing. Though reliable statistics are hard to come by, there have been major frauds, particularly in banking and the stock market (often together) and in a lesser way, in credit card and computer crime, as well as in some other areas. Apart from the well known ones, there have been others such as the forged Kissan Vikas Patras, Indira Vikas Patras and National Savings Certificates, the Gold scam case of Ahmedabad, Cyberspace case of Unit Trust of India and the Century Consultants Limited case of Lucknow. Further, the vast erosion in the value of Unit Trust of India (UTI) stocks which cannot be attributed just to changes in the market is yet another example. There was also the case of the failure of Non-Banking Financial Companies (NBFC), but, that was partly the creation of regulatory agencies, which did not handle the matter properly. The list is illustrative and is not exhaustive.
20.2 DEFINITION 20.2.1 Earlier definitions of economic crimes would be inaccurate today as generally, economic crimes are seen as newer versions (more technology driven) of conventional crimes. The result is, the lack of accurate information on these crimes, especially as there is no definition or proper classification. An economic crime could possibly be defined in a broad way keeping in mind that it will need to be an ‘umbrella’ to cover future offences too. Thus an economic crime is an illegal act (or set of acts) generally committed through misrepresentation or outright deception by an individual or a group with specialised skills, whether professional or technical with a view to achieve illegal, financial gain, individually or collectively. A transaction of the value exceeding Rupees five crores involving an illegal act or acts could be deemed to be a serious economic offence.
20.2.2 Such a definition would include all contemporary economic crimes, would cover persons who are outside an organisation and would not be confined to just non-violent white-collar crimes. This would also include Corporations and members of professions such as the Law, Accounting, Management etc., and would cover both Banking, non-Banking financial frauds, violations of the Stock Market, Smuggling, Money Laundering, Intellectual Property Rights (IPR) related offences, Insurance and Health frauds, IT related offences (cyber-crimes), Telecommunication, Theft and misuse of Credit card & identity and Corruption.
20.2.3 There are over seventy Central Laws covering many offences apart from those in the Indian Penal Code. To prevent and punish violations under economic offences, there are large numbers of agencies with investigative and quasi-judicial powers. As the magnitude of economic offences is enormous, it is essential to make rigorous laws and strengthen the regulatory, investigation and enforcement systems adequately.
20.3 THE LAWS 20.3.1 In the past few decades, attempts have been made to change both the laws and procedures, which included: i. Definition of new economic offences with enactment of special laws and appropriate authorities with powers to prevent, investigate and prosecute; ii. The elimination or modification of mens rea in defining economic offences; iii. The shifting of the burden of proof or the power to Courts to make presumptions under certain conditions; iv. The extension of offences to preparation and attempt to commit offences; and v. Introduction of stringent measures such as Special Courts, denial of bail/probation/privileges and civil rights, summary trial, confiscation/forfeiture of property and even preventive detention.
20.3.2 The Legislature has responded by making new laws to tackle economic crimes and the Courts have not been far behind. Yet, the Courts have – being somewhat conservative in nature – stuck to the Constitutional guarantees of fair trial though somewhat expansively. This combined with the delay inherent in our judicial processes has assisted economic criminals immeasurably. This has been worsened by judicial interpretation, which has distorted the legislative intention of the special criminal laws. Interventions of the Court even at an early stage of investigation have also thwarted administrative action and enforcement.
20.3.3 Recently there have been some encouraging judicial decisions of the Apex Court reversing the earlier interpretations and tightening the system making it more difficult for economic criminals to escape justice. It began with the decision in Vineet Narain V. Union of India (1988 | SCC 266) where in the Court attempted to save the investigating agency from unjustified political interference by invoking what is called “continuing mandamus”. This action of the Supreme Court resulted in giving some degree of professionalism and independence to CBI and the central Vigilance Commission. It brought out the corruption and unfairness involved in the so-called “single line directive” protecting corrupt senior officers which the Court struck down. Deterrent punishment for economic offender is now canvassed by the Supreme Court itself. It is difficult to predict whether these decisions on economic crime will have the desired impact on the mindset and practices prevailing in the Criminal Courts; even if it does, major problems still remain, as will be seen later. However, public perception is that in the economic sphere the enforcement of the laws is lax. Inspite of several agencies, there is an impression that the State and its agencies are incompetent to deal with those who commit major economic crimes.
20.4 VOHRA COMMITTEE REPORT, 1993:
20.4.1 In 1993, Government of India appointed a Committee under the Union Home Secretary, which reported on the activities of organized crime and the links between organized crime and politics. The report revealed – not that it was unknown – the powerful nexus between those who broke the laws especially economic laws, the politicians and some of the functionaries of the Government especially in the police, customs and direct and indirect taxes, all of which resulted in protection of large scale economic crime and in those cases which became public, nominal action was taken against the offenders which bore no relationship to the benefits from crime.
20.5 THE MITRA COMMITTEE REPORT, 2001
20.5.1 The Report given to the Reserve Bank of India prefaced its report by admitting the fact that criminal jurisprudence in the country based on “proof beyond doubt” was too weak an instrument to control bank frauds. The Committee contended that “Financial fraud is not an offence in spite of the fact that the banks and financial institutions suffer heavily in frauds committed by the borrowers, more often than not, in collusion with the employees of the banks and financial insitutions… . the situation is becoming explosive and can lead to anarchy at any time unless the scams are legally contained.”.
20.5.2 The Committee recommended a two-fold approach to tackle bank and financial frauds. It suggested a preventive strategy by system reform through strict implementation of Regulator’s Guidelines and insisting on obtaining compliance certificates. Secondly, a punitive approach by defining “Scams” (financial frauds) as a serious offence with burden of proof shifting to the accused and with a separate investigating authority for serious frauds, and special Courts and prosecutors for trying such cases and with increased powers to the investigating agency of search, seizure and attachment of illegally obtained funds and properties. The Committee suggested a Statutory Fraud Committee under the Reserve Bank of India.
20.5.3 As it stands, the Criminal Justice System is ineffective in handling major economic crimes. UK set up a Serious Frauds Office under the Criminal Justice Act 1987 to deal with investigation and prosecution of serious economic crimes with extensive powers including search and seizure. Similar arrangements have been made in the European Union and in the U.S. In our Country too, we need to put in place better legislation, improved Criminal Justice System and a strong Regulatory enforcement system to prevent, investigate and prosecute major economic crimes.
20.5.4 It will be useful to have a quick look at the various types of major economic crimes (including cyber crimes), that have to be tackled so that we can appreciate the extent and complexity of these crimes. This does not include the conventional and organised crimes, which have been dealt with in the Penal Code.
20.6 Banking and financial crimes: The traditional crimes in this area are taking loans from banks with fraudulent project documents combined with under invoicing and over invoicing to benefit the loanee, sometimes with the collusion of bank officials. Some of the non-banking financial institutions have taken deposits under false pretences promising all kinds of returns and cheating the depositors, including the plantation type offers. There are also various types of cheques’ frauds. With the growth of online banking, traditional methods of embezzlement of funds have fallen by the wayside as funds can be embezzled through wire transfer or by taking over the accounts or loans can be taken with fraudulent applications online, new accounts can be taken over by taking over the identity of the account holder or one could hack into a bank’s payment system and take money. This is often combined with bank fraud and includes stock manipulations, fraudulent offering. The traditional pyramid schemes, which are not uncommon in our Country, can now be done through the Internet. There is also the increasingly common Internet fraud with on and off websites, fraudulent recommendations on securities with several variations of these. The problems of insider trading, price rigging, floating companies by fly-by-night operators with false prospectus etc., are also yet to be seriously tackled; with the Internet the matter becomes somewhat more complicated. It is interesting to note that in 1997 forging of cheques in the U.S was well over $ 512 million. It was using by over 20% per year. Securities the world over also runs to billions of dollars.
20.7 Money laundering: Another major problem, which is proposed to be solved through a bill, is Money laundering. In 1998, the world wide money laundering was estimated to be about $ 2.85 trillion. While legislation would certainly help in prosecution, it will not be of much value unless proper preventive arrangements are put in place. As filing of charge and prosecution takes time, there should be scope for interim attachment of all properties including bank accounts with the Court getting into investigating the nexus between crime and property. There should be a lower monetary ceiling and insisting on all transactions through cheques (unless in the case of banks, there should be arrangements for reporting such deposits, when they are suspect), prohibition of 3rd party endorsements unless the details in the transactions are made available and reporting by banks of all transactions above a certain limit as well as other transactions which are suspect, with suitable modification of banking secrecy clauses.
20.8 Insurance crimes: Insurance fraud which runs billions of dollars, the world over, can be expected to be a growth sector and these can be committed internally by Company officials and externally by applicants, policy holders, false claimants etc., the fraud being in terms of inflated/false claims, fraudulent policies or using misinformation for gain.
20.9 Credit card crimes: Fraud loss in the credit card industry, is over $ 1.5 billion annually. These are gradually increasing in our Country too and include counterfeit, stolen as well as cards which were not received, taking over of credit card accounts, mail order and transactions on the internet.
20.10 Health care frauds: The frauds in this area include inflated bills, false claims and frauds in the purchase and use of pharmaceuticals and equipment. These would be both in government and the private sector.
20.11 Telecommunications: Fraud in this sector is well over four billion dollars an year. The main fraud here is in subscription or identity fraud as stolen Ids or credit cards can be used for free service in anonymity and with impunity. This includes telemarketing frauds. This kind of fraud is endemic and will increase.
20.12 Identity theft: This new type of offence consists of stealing of identity information and using it to obtain credit, hide from the law or live as a local resident, without being entitled to. Fraud may be perpetrated against financial institutions, government departments or other private companies or individuals, using identity theft.
20.13 Intellectual Property and cyber crime: IP theft (copyright, trademark) industrial/commercial secrets, cyber squatting etc., the cost of which runs to a few hundred billion dollars every year in the US alone. 20.14 Computer Crime: Yet another new type of offence which covers illegal access to information contained in a computer – whether privately or publicly owned in which either fraud is committed using computers or used for sending threatening messages. These could be used for activities threatening a Country’s security.
20.15 Technology and crime: With increasing e-commerce, there is increase in cyber economic crime. For every economic crime, there is a cyber version with much more potential, larger profits and lesser risks. While the ecommerce, as a system is speedy and efficient, its very speed and efficiency are creating problems. The Internet has made all borders and legal jurisdictions obsolete. Criminals can remain in one jurisdiction and commit crimes elsewhere and avoid prosecution. Therefore, a high degree of co-ordination to prevent crime and co-operation to prosecute and punish crime become essential especially as the proceeds of these crimes go into further crimes including drugs and arms.
20.16 Pornography (including child pornography): These offences involve violence against women and children. These offences would cover manufacture, possession and commercial use of pornography including child pornography, violence against women or children and the enforcement of women/child support.
20.17 Crimes against the environment: Offences under any of the various environment protection laws, which pose serious hazards to public health.
20.18 Serious Frauds: It is true that while on and off, economic crimes do come to the fore in press and parliament, they have not received the importance they deserve in spite of their seriousness. Terrorism-both internal and cross-border had taken the central stage in the last few years. The links between terrorism and certain types of economic crimes gradually emergedwhile at the same time unconnected scams and frauds also occurred. Therefore, there is a crying need to deal with economic offences (including some cyber offence) as a special category of offences and they have to be dealt with not only in a manner different from other crimes but would also require a group of highly trained experts with sufficient powers and resources to handle them. Clearly, the existing laws and procedures are not equal to the task of handling the more complex economic crimes; hence the need for the newly suggested approach.
20.18.1 One possible option could be an Economic Offences Code on the lines of the Criminal Justice Act, 1987 of the UK and the more recent Economic Crimes and Anti-Money Laundering Act 2000 of Mauritius. The UK Act of 1987 which provides for special procedures for the investigation and trial of serious frauds creates a Serious Fraud Office with an independent Director under the Attorney General, with powers to investigate any suspected offence which appears to him on reasonable grounds to involve serious or complex frauds. The offences under this Act are punishable up-to seven years imprisonment for not testifying or giving false evidence or concealing evidence about serious frauds. Further, under this Act, cases involving serious frauds can be transferred to Crown Courts and these cannot be questioned in any Court. There are restrictions on the reporting of the proceedings of such trials or hearings. Under this Act, charges for conspiracy can also be brought. In brief, this is an extra-ordinary legislation creating a single authority with high powers for the investigation of offences involving serious frauds by-passing normal criminal procedures.
20.18.2 The Mauritius Act of 2000 is much more comprehensive. It lists out all economic offences (including those created by other laws such as insurance, securities, stock exchange etc.,) under one umbrella and authorise the Director of Economic Crimes to include similar crimes. The Act brings under the jurisdiction of the Director professions such as Lawyers, Accountants, and Notaries etc. The Director has powers to draw the help of civil as well as police authorities, to gather information and carryout investigation, to co-ordinate for this purpose law enforcement agencies, government departments, private institutions, professions etc., and to devise other measures against money laundering and other economic offences. The Director must declare his assets and liabilities both while taking over and demitting office. The Director has high powers to enforce compliance with the Provisions Act by institutions as well as individuals including power to search to attach property etc., On every investigation, he has to report to the Director of Public Prosecution. All banks, financial institutions and professionals are obliged to report all suspicious transactions to him. The Act gives the Director to apply for freezing of the assets of a suspect. He could seek assistance from abroad both for getting evidence and extradition of suspects. Similar laws are being enacted in other countries too. In a slightly different context, the US Government has adopted a Patriot Act 2001, which gives staggering powers to the US Government.
20.18.3 Many other offences listed in the earlier pages including money laundering have been made crimes in India already. Some might not have been covered adequately. Considering the limited capabilities of the present day investigative agencies and the jurisdictional issues, it is being recommended that a Serious Fraud Office be created for handling such crimes.
20.18.4 The Serious Fraud Office should be an autonomous body run by a Board consisting of 3-5 members who will be selected in a manner which will clearly proclaim to the public their independence, autonomy and objectivity so that public will have confidence in the institution. The Serious Fraud Office will deal with serious economic offences, which have been defined earlier. The Serious Fraud Office will have a core staff drawn from different departments such as the Police, specialists in economic administration, customs and income tax, Forensic Science on the one hand and computer specialist, accountants, lawyers and such. They should also have freedom to hire in the short-term specialists of any kind to augment investigating units depending on needs. This way, the essential staff will be kept at a reasonable level and specialists can be had temporarily as and when needed.
20.19 PROCEEDS OF CRIME
20.19.1 A serious problem in investigating these frauds is the identification and attachment of the properties whether movable or immovable accusedindividual (or company) including relations, associates and benamy holders. A way out could be to adopt something similar to the Mauritius Law or adopt the Maharashtra Investor Code system (created under the Investor Protection Act of Maharashtra or MIPA) which will allow the earlier attachment of such property. Once this is done, the accused themselves approach the Court and assist in the investigation as they would like to get the property released. Such a system will shift the burden on the accused to show that the property was indeed obtained through legitimate methods.
20.19.2 The rules of evidence including presumptions and burden of proof have to be suitably modified and streamlined to tackle these new crimes. All public documents including bank documents should be presumed to be correct.If the accused has benefited from the fraud, the principle of res ipsa loquitor should be applied to draw the adverse inference. Similar adverse inference can be drawn in internal rule of procedure have been violated. It is incumbent on the defence to disclose its version once prima facie evidence is available and the charge is framed. Similarly, all authorised signatories of suspect companies and associates must answer truthfully to interrogatories sent or are prosecuted for perjury. As in laws in Singapore, where the accused is either silent in examination or in his reply, adverse inference can be drawn.
20.19.3 The proliferation in recent times of large-scale crimes, which relate to finance, drugs and such involve large amounts of money; at the same time, they affect adversely increasingly larger sections of the population. Some of this money- especially from drugs- is used for financing terror-related crimes. There are large interstate and even international gangs which are controlled by leading criminals who do not get directly involved in these crimes, but manage the system sitting away from the scene of the crime and take the large profits from the crime. Governments find it difficult under the present legal system, especially because of the laws and rules relating to extradition as well as the relationship between States and Countries, to lay their hands on these criminals who therefore remain untouched by the Criminal Justice System, for often, they live in countries other than the ones in which the unit of their criminal empires run. The activities of these organised criminal groups in some cases affects people in their everyday lives too, as the crimes relate to property, kidnapping, financial fraud, and prostitution among other things.
20.19.4 Thus, we have a situation where there are major criminals who are untouchable under the law, but lead very comfortable lives from their substantial profits from crime. As the present Criminal Justice System has failed to apprehend or proceed against such criminals, the one powerful way of dealing with such crimes will be to confiscate the proceeds of their crime and send a message that crime will not pay, thereby restoring people’s faith in the Criminal Justice System. This will also ensure that the money will not be used to finance further criminal activities. Further, the proceeds recovered could be used to finance crime reduction and criminal rehabilitation projects. In the circumstances, what is needed is a law, which will seize the assets of crime and assist in dismantling and disrupting the criminal organisations. This legislation will introduce in a single scheme the powers of confiscation, which Courts have- in a limited fashion – currently against those convicted of offences. There are broadly two ways of looking at the issue of whether a defendant in such cases has benefited directly or indirectly from crime. The more obvious case is where there could be a list of offences, which will help determine when there is a nexus between defendant, the offence and its benefit. In such cases, the Court can assume that all the defendant’s assets are derived from crime, shifting the burden of proof to the defendant unless the defendant proves to the contrary and adduces sufficient ground to prove injustice.
20.19.5 In brief where it is difficult to show a direct nexus, but there is no known source of legitimate income, it should be possible by applying tests of evidence and public interest to investigate and again proceed against the defendant until he proves to the satisfaction of the authorities that the source of his income are indeed legitimate.
20.19.6 In any event, in all such matters, Courts should have the power not only to restrain the assets at the start of the investigation-to ensure that the assets are not disposed of when the Court is seized of the matter- and set in motion detailed investigation with specialists trained in taxation and finance to look at the sources as well as the routes by which the money had come to decide on the further course of action. In those cases where confiscation is not possible, the Court should have the taxation aspect looked at to ensure that such income is taxed suitably. It is important that this legislation covers all income from dubious sources, which includes not just ordinary crime but also drug and terror-related income as well as laundered money. Wherever the prosecutor can prove that the money is fully or in part the proceeds of criminal conduct, then the defendant can be proceeded against the particular offence or class of offences. It is important that with such special legislation, special courts are established to handle such cases and special investigators are appointed, including forensic accountants as in all these cases as it will be difficult to get witnesses and therefore the paper trail has to be discovered. Further, there should be an agency to handle the property for the Courts.
20.19.7 As there is a possibility of official abuse of these powers and there is a need for building in sufficient safeguards against it. The Committee notes that legislation in this regard has been recently introduced in the UK and it would be useful to look at their experience in the matter.
20.20 ASSETS RECOVERY AGENCY
20.20.1 In the UK, under the Proceeds of Crime Act, 2002, Assets Recovery Agency has been setup which supports the police, customs, revenue and other agencies in financial investigation leading to conviction, confiscation and recovery of the property. Keeping this in mind, the Committee is of the view that in place of the present system in which the Judges order attachment/seizure, forfeiture or confiscation, a new agency be created called the Assets Recovery Agency to reduce the work of the Judges and the courts by taking over the responsibility of recovery of assets.
20.20.2 The Agency’s objectives will be to reduce crime by: ? ? Supporting investigative agencies such as the Police, in financial investigations, by providing specialist training and advice. ? ? Investigating cases leading to post-conviction confiscation order and/or applying for such orders. ? ? Using a new power of ‘civil recovery’ – suing in the High Court for the recovery of the proceeds of unlawful conduct. ? ? Using powers of taxation where the Director has reasonable grounds to suspect that there is income, gains or profits that is chargeable to the relevant tax and which results from criminal conduct. The Director will carry out the tax functions that the Inland Revenue would ordinarily carry out, not limited to the proceeds of unlawful conduct but all the defendant’s property. The only difference between the Director and the Inland Revenue will be that when the Director carries out his taxation functions, the source of income need not be identified. ? ? Seeking and executing requests for international assistance in obtaining restraints and confiscation and the use of powers of investigation.
20.20.3 The Agency will take on cases only on the basis of referral from the Police, Customs and law enforcement authorities based on agreed criteria.
20.20.4 It may be noted that ARA has functioned only for a short period, and therefore it is too early to assess its success.
20.21 THE REGULATORS AND THE SERIOUS FRAUD OFFICE
20.21.1 Disclosure has been a long accepted in principle in Corporate Law to prevent fraud and to protect investors’ interest. But with a large bureaucracy both Government and quazi-Government, such disclosure has been partial, delayed and often misleading and has served little purpose. The line between near crime and crime is so fine (as for example between tax avoidance and tax evasion) that criminal liability is not something, which could be pinned upon a suspect easily. Even the quite useful standard procedures of accounting as well as independent auditing have ceased to ensure corporate responsibility or even basic accountability. Bankruptcies, flyby- night operations, sudden and repeated mergers, de-mergers and acquisitions, stock market failures, money laundering etc., have raised serious doubts about accounting and auditing processes not to mention good business practices in corporate governance itself. When corporate governance fails, particularly in the financial sector, the impact is felt by the rich and the somewhat poor indiscriminately and often substantially. There is also the need to define the roles of regulators and demarcate the fine line between the regulators and the criminal investigation machinery. This is of course not common to our country alone but with increasing liberalisation and opening up of the economy, there is a need to improve monitoring, ensure proper disclosures, keep track of major and suspicious transactions, simplification of procedures and greater co-ordingation between regulators, enforcement agencies and the police.
20.22 SELF-REGULATION, REPORTING SYSTEM AND LAW
20.22.1 There has always been a tendency to allow self-regulation, to a large extent to professional as well as companies. This has also happened in the cyber area, especially the Internet. The failure of the accounting, auditing and other professionals have thrown up the weaknesses in the system. It is necessary to intervene where such self-regulation has failed. At the same time Government, to reduce the burden on itself, should work closely and continuously with business by cleaning up regulations, enacting new laws and help in prosecutions. This is particularly true of cyber crime. This is important as fraudsters are clever and are ahead of Government and most companies in the sophistication of their technical knowledge. There is of course the balance between privacy protection, legitimate business use of private data and prevention of cyber fraud. Here, we have to sacrifice some of our individual interest in the interest of fraud prevention in Society. If this initiative is not taken by the Parliament, there will be plethora on conflicting decisions by different courts at different levels – now a new phenomenon- that will inhibit the development of cyber commerce not to mention reduce the effectiveness law enforcement investigations and international co-operation to reduce such crimes.
20.23 CONFUSION IN REGULATION
20.23.1 The various frauds and scandals in the past but over the past two decades in particular, have made it abundantly clear that we need for a clear demarcation of responsibilities for and accountability of both the regulators and regulated. For example, Banks come under regulation by both RBI and the Banking department of Govt., of India and in a smaller way SEBI as well as other company law regulators. When the RBI intervened to control the NBFC’s it was both heavy handed and indiscriminate. RBI regulates banks and has its representatives sitting as Directors on the board of banks, which is somewhat anomalous. The regulation of National Bank for Agriculture and Rural Bank ( NABARD ), National Housing Bank (NHB) and such are not clear. Security Exchange Board o India (SEBI) regulates the mutual funds but not the UTI which has got into serious difficulties, in a sense victimising its customers. The co-operative banks and chit funds are not under any kind of acceptable supervision. In brief, the regulatory system, if it can be called that, has ensured neither compliance nor accountability. In the last decade or so the unanswered question which has emerged in how to make the regulators themselves accountable. Hence the need for looking at the regulatory systems to ensure that there is no confusion in regulation, participation by the regulators in the regulated institutions; applicability of similar rules to those similarly placed and no over-lapping or the issue of conflicting orders etc. This is necessary not only to promote good governance but also to avoid conflict of interest.
20.23.2 It will be useful to have these matters examined to clearly demarcate where regulation ends and control of criminal activities begin. It has become clear the adhoc responses to these serious problems will not be of help, especially as the autonomy of the regulators has become open to doubt and the way the court system operates makes it easy for the criminal to escape.
20.23.3 It is time to bring in close and seamless coordination between the RBI, SEBI, Department of Company affairs, the Company Law Board, the regulatory authorities for telecom, insurance and power, the various departments of tax such as income, excise and customs, and all the other agencies appointed as regulators. Their reporting and regulation systems, data gathering mechanisms be reviewed and their monitoring and supervision improved and track of suspicious activities of especially those treading on the border line of the lawful and criminal activity be kept. These agencies should have, unlike now, a limited but highly effective compliance system, which should be, enforced strictly both on employees of institutions and professionals, failing which they will face heavy penalties, making non-compliance economically non-viable. Environmental laws are violated all over the country with near total impunity. These violations have serious economic consequences in terms of damaging the quality of environment, which affects future generations as well. They also have serious public health consequences as their adverse effect is on the health of the people and reduces economic/financial productivity of the country.
20.24 INFORMERS In its 179th report on the Public Interest Disclosure and Protection of Informers, the Law Commission of India has recommended certain measures to check corruption in Government by enacting a Law titled “The Public Interest Disclosure (Protection of Informers) Bill”. This bill is intended to en courage disclosure of information about the conduct of a public servant involving the commission of an offence under the Prevention of Corruption Act or any other Law; it is designed also to check abuse of one’s official position or mal-administration and protect the person making such disclosure. While this is commendable what we need is an Act which will cover such persons making disclosure (informers) applying to all Economic Crimes, Organised Crimes, Federal Crimes as well as Terrorism. This is a matter of great importance and it is recommended that Government takes steps to enact a general bill to cover all such cases and not just those who “blow the whistle” on corruption. |