– This blog has been authored by Vansh Bhatnagar and Gunjan Sharma. The authors are 4th and 2nd year students of B.A. L.LB. (Hons.) at Rajiv Gandhi National University of Law, Punjab, respectively.
Introduction
The world today is governed by the centers of economic power. In the modern format of heavy reliance on private companies in an economy, the key questions of the criminal liability of these companies are often faced by the courts. The more nuanced and detailed study of corporate criminal liability raises a deeper question of liability particularly in the case of homicide. What if the company causes the death of a person? Can it be prosecuted? How will the principles of criminal jurisprudence on homicide be applied to a company? This blog attempts to answer these questions, particularly with references to the criminal jurisprudence of homicide. The blog explores the lacuna in the law, the loopholes, and provides an interpretation for establishing the liability of the companies in such cases.
Homicide- Death of Humans or Persons?
Homicide refers to the killing of a human being by another human being, i.e., a natural person. The IPC mentions the word ‘human being’ in Section 10, which defines “man” and “woman”. However, the word “person” as defined under Section 11 includes even a company, association, or body of persons, whether incorporated or not. The primary question for holding companies liable for a crime of homicide is whether the meaning of the word ‘person’ can be construed to be the same as that of the word ‘human being’, as the long-standing controversy is that since a corporation cannot possess Mens Rea, an essential of criminal law, criminal liability cannot be established. And even if criminal liability is imposed, imprisonment or even the death penalty for a corporation is not practically possible for offenses that recommend both a fine and imprisonment as a punishment.
The Indian criminal jurisprudence, especially in cases of culpable homicide, heavily relies on the mens rea of the accused. Section 299 of the IPC, which defines ‘culpable homicide’, clearly bases the crime on either the intention to cause death or the knowledge that the act is likely to cause death. Similarly, even Section 300, which defines ‘Murder’, bases the crime on either the intention to cause death or the knowledge that the act is most likely to cause death. The Supreme Court in Kurban Hussain v. State of Maharashtra stated that even in cases of death caused by negligence under Section 304A of the IPC, there must be mens rea. The Court said that it must be proved that the accused went beyond a mere matter of comprehension, thus emphasizing the imperative nature of a guilty mind.
Can Corporations have Mens Rea?
The element of mens rea is generally presumed to be a product of the human mind and not that of a corporation. In order to subject corporations to criminal liability, it is necessary to prove that a natural person committed the crime. Another issue that arises to bring corporations under criminal liability is the punishing policy of forms of homicide under the Indian Penal Code. The punishment in most cases of culpable homicide is imprisonment. It is argued that a corporation, not being a natural person, cannot be imprisoned, and therefore, criminal liability cannot be attracted. However, in 2006, the Supreme Court in Standard Chartered Bank v. Director of Enforcement went on to hold that a company can be prosecuted even under the crimes punishable with a minimum sentence of imprisonment and eventually set the jurisprudence on corporate criminal liability moving.
It was the case of Iridium India Telecom Ltd. v. Motorola that finally settled the jurisprudence in India and heldthat a corporate body cannot escape responsibility on the grounds that the crime carries an imprisonment sentence and that it lacks a body. When both a fine and imprisonment is required as punishment for any offense, a corporate company will simply receive a fine. A corporation can be made liable even for the offense for which mens rea is the essential prerequisite. It recognized the Doctrine of Alter Ego, i.e., “the person or group of persons that guide the business of the company, such as officers, directors, managing directors etc., would be imputed to the corporation.” The Supreme Court reiterated the doctrine of alter ego in Sunil Bharati Mittal v. Central Bureau of Investigation, similar to a position of law found in Canada, another Common Law country.
To counter the difficulty of sentencing companies, ‘Doctrine of Attribution and Imputation’, was put forward for establishing criminal liability. This means that a corporation would be held criminally liable if an offence were to be committed by an individual or group of individuals in charge of its affairs, and that the corporation could be considered to have thought through the individual or group of individuals. Consequently, even a corporation may be criminally liable through its alter ego, or the individuals who direct the business of the company, since those individuals are deemed to have the mens rea of the company.
However, the court observed that in India, the constructive liability rule is not applicable in the absence of specific and express provisions of the law for the imposition of criminal liability. It is pertinent to establish the relationship between the natural person and the corporation to establish constructive liability. To establish such a relationship, the court must use tests like the ‘benefit test’ and the ‘due diligence test’. When an employee’s actions benefit the company and the company continues to benefit from the action despite knowing it to be illegal, it is important to determine whether corporate bodies have planned for due diligence mechanisms to prevent criminal commission; the presence or absence of such mechanisms is a key factor, as is whether action was taken when an employee committed a crime. Thus, there is a two-prong test in place: (a) sufficient incriminating evidence against the person, body, or person, and (b) a statutory regime that attracts the doctrine of vicarious liability.
Various special legislations provide for such liability to be imposed on corporations. For instance, giving advertisements for pre-natal sex determination is illegal, according to Section 22 of the Pre-Conception and Pre-Natal Diagnostic Techniques (Prohibition of Sex Selection) Act of 1994 (PCPNDT Act). If this crime is committed, the advertising company, the hospital, and the doctor are held accountable. Any clinic that engages in or permits its use for sex determination is subject to penalty. Similarly, the Transplant of Human Organ Act of 1994 (THO Act) is a key piece of legislation to address the issue of organ transplant commercialization. According to Section 21, hospitals are corporate bodies, and they as well as the individuals in charge of their business are subject to criminal penalties for illicit organ procurement and transplantation.
On the contrary, the provisions in the IPC dealing with the offenses of homicide do not provide any specific and express provision for establishing the corporations liable for the acts. The corporations can easily escape legal scrutiny, even if they are the beneficiaries of an illegal act. In such cases, it would violate the fundamental right to a free and fair trial for the victim. In this era of globalization and the growing involvement of corporations in the commission of international crimes, international jurisprudence, in congruence with the Roman statute, has adopted the extension of the International Criminal Court’s jurisdiction beyond human beings to include corporations. But in order to adopt a similar jurisprudence, as found in countries like the United States that work on the principle of vicarious liability and Respondeat Superior, the lack of specific provisions that provide for the same is a major hurdle for establishing criminal liability.
The introduction of the Companies Act and specific provisions under Section 34, read along with Section 447, is a step forward in providing punishment, even though specifically for the crime of fraud. Similar provisions, even beyond the companies act, can help in holding corporations criminally liable. The Companies Act, by recognizing specific crimes, marks a positive step, but a broader legal framework is essential for holding corporations accountable in cases beyond just fraud. And as we grapple with the challenges of globalization and the involvement of corporations in international crimes, the need for comprehensive legislation becomes evident.
Conclusion
Criminal jurisprudence in India heavily relies on the fundamental principle of Actus non facit reum, nisi mens sit rea. Hence, in order to attribute criminal liability to a company, it must be proved that there was a physical act, i.e., actus reus, and that there was an intention to commit the act, i.e., mens rea.
The criminal jurisprudence with regards to the liability of corporations in cases of homicide is limited in India. The lack of specific legislation is a major hurdle when it comes to holding a corporation liable for such acts. The hyper-technical differentiation between ‘human’ and ‘person’ under the IPC must be construed liberally. The IPC ought to be amended to include the liability of such corporations through specific clauses. It is a practical problem that a corporation cannot be imprisoned; however, the imposition of a hefty fine will act as a deterrent model for companies for the time being.
Relating to contemporary times, we realize that we are surrounded by the ever so pervasive artificial intelligence, which can even be employed to proximate negligence or establish accountability upon members of a corporation. AI can help not only detect any failure in the system but also demonstrate any reckless behavior on part of the corporation. Therefore, India does not lack tools that can aid in establishing corporate liability, and statutory changes can go a long way.
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