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Scope of Corporate Criminal Liability

Courtesy/By: Aarushi Ghai | 2020-12-30 10:39     Views : 266

The topic of corporate criminal liability has been controversial over the past few decades. With the establishment of corporate and giving them a separate legal identity the questions that frequently come up is that can a company be held liable? Can a company have Mens rea (guilty mind) or can a company be sent to jail? All the questions were answered by the courts in various cases.

According to the basic principle embedded in criminal law, criminal liability can be imposed on someone who has a body, and a soul of his own. For criminal liability to be established, two elements need to be fulfilled i.e. the actus rea and the mens rea. Mens rea indicates the presence of a guilty mind and criminal intention whereas actus rea refers to the physical activity that has been committed and is an offense under the law. In the case of corporations, the problems arise in the sense that a corporation does not have a body and soul or mind of its own. It is a separate legal entity that acts through its members. Therefore when the question arises of imputing a criminal liability on a company, it is difficult to assists how a company incorporates Mens rea and actus rea can.

The landmark case on corporate criminal liability in India is the case of Iridium Motorola, wherein the Supreme Court clearly observed that a company can be held liable for both criminal offenses and civil wrongs. Several principles have been laid down by the courts in England and also followed in India.

The first principle is the identification principle, which means that the act of the people and the state of mind people who are acting and carrying out business activities on behalf of the company will indicate the knowledge on the part of the company. The basis of this principle is that since the company does not have a mind of its own, it works through the mind of its agents, therefore the guilty mind of the members of the company will be linked to the mind and actions of the company

The second principle is the called the attribution principle, wherein the acts of the company and the state of mind of the company are attributed to a specific class of person. This principle helps in finding out whose mental element shall be attributed to the company for foisting the criminal liability.

Another principle that is widely followed is the vicarious liability, wherein the company is held liable for all the acts committed by the members, directors, or employees of the company who acts as the agents of the company, provided that the act has been authorized by the principal i.e. the company, and performed by the agent during the course of employment. The vicarious liability is also linked to the officer in charge. Therefore at times, the courts look upon who was the officer in charge of the acts committed.

Thus, all the above-stated tests are used while determining the criminal liability of a corporation. The courts generally in such a scenario lifts the corporate veil and identify the mind and body behind the offense committed. Therefore, even a corporate can be imputed to criminal liability and also be imprisoned. IPC Section 11 includes a corporation, which implies that a corporate can also be held liable for offenses that includes malice intent such as defamation.

 

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.

Courtesy/By: Aarushi Ghai | 2020-12-30 10:39