Corporate criminal liability – possession of mens rea by a company

[Rishabh negi]

Whether a corporate can have send really or is it necessary to prove the mens really of the corporate body to establish criminal calves.

And 2ndly can a sessions court give out a verdict of 100 crores,does pecuniary jurisdiction come into play and how do we justify the stamp duty.

[Dr. Ashok Dhamija]

Not possible to understand your question. You may write in Hindi if you have problem in English. Secondly, where is the question of stamp duty in criminal cases?     

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Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

[Rishabh negi]

And can a lower court hand out a verdict of 100 crores.

[Rishabh negi]

Sir,the question was wrong due to auto-correct.What I did want to enquire about was-
Whether criminal proceedings for defamation be initiated against a corporate body?
Whether corporate body possess a mens rea?
If it does or does not then how do we make it criminally liable?

[Dr. Ashok Dhamija]

Firstly, please note that Section 11 of the IPC defines “person” as under:

“The word “person” includes any Company or Association or body of persons, whether incorporated or not.”

Likewise, Section 3(42) of the General Clauses Act, 1897, also lays down that “person” shall include any company or association or body of individuals, whether incorporated or not.

In the case of Standard Chartered Bank v. Directorate of Enforcement, (2005) 4 SCC 530 : AIR 2005 SC 2622, a Constitution bench of the Supreme Court, by a majority of 3:2 has held that a company is liable to be prosecuted and punished for criminal offences. It was held that as regards corporate criminal liability, there is no doubt that a corporation or company could be prosecuted for any offence punishable under law, whether it is coming under the strict liability or under absolute liability.

In the case of Iridium India Telecom Ltd. v. Motorola Inc., (2011) 1 SCC 74 : AIR 2011 SC 20, the Supreme Court held as under:

“…virtually in all jurisdictions across the world governed by the rule of law, the companies and corporate houses can no longer claim immunity from criminal prosecution on the ground that they are incapable of possessing the necessary mens rea for the commission of criminal offences. The legal position in England and the United States has now crystallised to leave no manner of doubt that a corporation would be liable for crimes of intent.”

Supreme Court quoted the observations in 19 Corpus Juris Secundum, Para 1363as under:

“A corporation may be criminally liable for crimes which involve a specific element of intent as well for those which do not, and, although some crimes require such a personal, malicious intent, that a corporation is considered incapable of committing them, nevertheless, under the proper circumstances the criminal intent of its agent may be imputed to it so as to render it liable, the requisites of such imputation being essentially the same as those required to impute malice to corporations in civil actions.”

Thereafter, it was observed by the Supreme Court as under:

“The courts in England have emphatically rejected the notion that a body corporate could not commit a criminal offence which was an outcome of an act of will needing a particular state of mind. The aforesaid notion has been rejected by adopting the doctrine of attribution and imputation. In other words, the criminal intent of the “alter ego” of the company/body corporate i.e. the person or group of persons that guide the business of the company, would be imputed to the corporation.”

The Supreme Court concluded as under:

“…a corporation is virtually in the same position as any individual and may be convicted of common law as well as statutory offences including those requiring mens rea. The criminal liability of a corporation would arise when an offence is committed in relation to the business of the corporation by a person or body of persons in control of its affairs. In such circumstances, it would be necessary to ascertain that the degree and control of the person or body of persons is so intense that a corporation may be said to think and act through the person or the body of persons. The position of law on this issue in Canada is almost the same. Mens rea is attributed to corporations on the principle of “alter ego” of the company.”

So, the legal position should be clear from the above observations of the Supreme Court.

With regard to the other part of your question, regarding the power of a criminal court to deal with high value matters, please note that generally there are no monetary restrictions on the powers of a criminal court; their powers are generally on the basis of the punishment prescribed for an offence under law, and not the monetary limit.

     

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Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

[Rishabh negi]

Sir,can u pls elaborate with the provisions of companies act and in relation to lifting of the corporate veil and legal maxims involved.

Further what is ur justification in the case of 100 crore verdict given in favour of retd justice pb sawant in his lawsuit against times now.pls provide remarks in favour of the above with case laws

[Dr. Ashok Dhamija]

I thought you had a specific problem in your own case. Otherwise, it is not possible to answer academic questions. This forum is to help needy people who are facing legal issues in their own actual cases, and not to answer academic queries. Time wasted on academic queries can better be utilized for helping some other needy person, as one does not have unlimited time.     

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Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

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