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Report No. 156

11.02. Commission of fraud through the use of computers.- With the advent of electronics many transactions are done through computers. Recent scam of fraud in New Delhi Municipal Corporation electricity bills through use of computers is an illustration of computer-fraud.

The topic of computer-crime has recently formed the subject of a report by the Scottish Law Commission. In this respect the Scottish Law Commission identified eight distinct forms of behaviour, while the English counterpart referred to five main headings. In both cases, however, three critical issues stand out, namely: (i) the involvement of the computer in a scheme to secure unlawful financial advantage or the unauthorised amendment or deletion of data, (ii) the unauthorised use of a computer system or the securing of unauthorised access to data held therein, and (iii) the 'theft' of the information.

The Audit Commission (U.K.)1 has conducted a triennial survey of 'computer fraud and abuse'. The Commission was only able, in their survey covering the years 1984-87, to discover 118 incidents of frauds within England and Wales with total losses amounting to a little over 2.5 million pounds. It has also been alleged that clearing banking have set aside the sum of 85 million pounds to cover losses arising from computer fraud. The Audit Commission (U.K.) further found that the concept of computer frauds spans a wide range of activities ranging from sophisticated multimillion pound frauds to the misuse of a bank's automatic teller machine.

Therefore, there is a need to explicitly bring the computer frauds within the purview of Chapter XVIII of the I.P.C. dealing with offences relating to documents by enlarging the scope of the term 'document'.

1. Audit Commission (U.K.)

11.03. The term 'document' is defined in section 29, I.P.C. as follows:-

"29. Document.-The word "document" denotes any matter expressed or described upon any substance by means of letters, figures, or marks, or by more than one of those means, intended to be used or which may be used, as evidence of that matter.

Explanation I.-It is immaterial by what means or upon what substance the letters, figures or marks are formed, or whether the evidence is intended, for or may be used in, Court of Justice, or not.

Illustrations

A writing expressing the terms of a contract, which may be used as evidence of the contract, is a document.

A cheque upon a banker is a document. A power-of-attorney is a document.

A map or plan which is intended to be used or which may be used as evidence, is a document. A writing containing directions or instructions is a document.

Explanation 2.-Whatever is expressed by means of letters, figures or marks as explained by mercantile or other usage, shall be deemed to be expressed by such letters, figures or marks within the meaning of the section although the same may not be actually expressed.

Illustration

A writes his name on the back of a bill of exchange payable to his order. The meaning of the endorsements, as explained by mercantile usage, is that the bill is to be paid to the holder. The endorsement is a document, and must be construed in the same manner as if the words "pay to the holder" or words to that effect had been written over the signature."

Evidently, this definition though wide in nature, needs to contain explicitly a provision in the light of the recent electronic developments. The Law Commission in its 42nd Report, para. 2.56, observed that:-

"2.56 The main idea in all the three Acts is the same and the emphasis is on the "matter" which is recorded, and not on the substance on which the matter is recorded. We feel, on the whole, that the Penal Code should contain a definition of "document" for its own purpose and that section 29 should be retained.

The two Explanations attached to section 29 are, we think, helpful. The first Explanation helps to clear ambiguity about the import of the word "evidence" used in the section, and is in accord with the view of the Courts."

11.04. It may be noticed that in the Forgery and Counterfeiting Act, 1981 (U.K.), section 8(1), the term 'instrument' means:

"in this part of this Act 'instrument' means-

(a) any document, whether of a formal or informal character;

(b) any stamp issued or sold by the Post Office;

(c) any Inland Revenue Stamp; and

(d) any disc, tape, sound track or other device on or in which information is recorded or stored by mechanical, electronic or other means."

Arlidge & Parry on Fraud1, para. 5.012, observe:

"in particular it is submitted that the words "any device on or in which information is recorded or stored by mechanical, electronic or other means" in section 8(1)(d) include the magnetic stripe on a payment card: the stripe is clearly a device on which encoded Information about the holder's account is recorded and stored. The same must apply to electronic chip used on "smart" card. Since the stripe or chip is attached to the card, it follows that information is also stored on the card; but is the card a "device"?

It is submitted that if it is not a "document" within section 8(1)(d). It is clear that cheque cards and credit cards, at least, are intended to qualify as instruments because they are expressly included among the special category of instruments possession of which can be an offence. Other forms of payment card are not so included; but it would be strange if a credit card were an instrument and a debit card were not."

1. Arlidge & Parry on Fraud, Ch. 5, para. 5.012

11.05. A survey of definition of 'Document' in other legislations would be of great use. According to Black's Law Dictionary,1 'Document' means-

"An instrument on which is recorded, by means of letters, figures, or marks, matter which may be evidentially used in this sense the term "document" applies to writings; to words printed, lithographed, or photographed; to seals, plates or stones on which inscriptions are cut or engraved; to photographs and pictures; to maps or plans. The inscription may be on stone or gems, or on wood, as well as on paper or parchment."

Under section 3 of the Indian Evidence Act, 1872, the term 'Document': "means any matter expressed or described upon any substance by means of letters, figures or marks, or by more than one of those means, intended to be used, or which may be used, for the purpose of recording that matter.

1. Black's Law Dictionary, 5th Edn., p. 432.

Illustrations

A writing is a document; words printed lithographed or photographed are document;

A map or plan is a document;

An inscription on a metal plate or stone is a document; A caricature is a document."

Under section 10(1) of the Civil Evidence Act, 1968 (U.K.) the word 'document' is defined as follows:-

"Document: A written paper or something similar which may be put forward as evidence.

'Document' includes in addition to a document in writing.

(a) any map, plan, graph or drawing;

(b) any photograph;

(c) any disc, tape, sound track or other device in which sounds or other data (not being visual images) are embodied so as to be capable (with or without the aid of some other equipment) of being reproduced from it; and

(d) any film, negative tape or other device in which one or more visual images are embodied so as to be capable (as aforesaid) of being reproduced from it."

Under clause 11 of the Companies (Amendment) Bill, 1996 the following section was proposed to be inserted in the Company's Act, 1956:

"610A. (1) Notwithstanding anything contained in any other law for the time being in force,-

(a) a micro film of a document or the reproduction of the image or images embodied in such micro film whether enlarged or not); or

(b)......

(c) a statement contained in a document and included in a printed copy produced by a computer (hereinafter referred to as a computer printout), if the conditions mentioned in sub-section 2 are satisfied shall be deemed to be also a document for the purposes of this Act

(2) The conditions referred to in sub-section (1) in respect of a computer print-out shall be the following, namely:-

(a) the information contained in the statement reproduced or is derived from returns and documents filed by the company on paper or on computer network, floppy, diskette, magnetic, cartridge tape, CD-Rom or any other computer readable media;

(b)......

(c)......"

11.06. It is, thus, evident that there is a trend of widening the scope of the term 'document' having regard to the latest scientific inventions in the field of electronics. Consequently, there is apparent need to combat frauds committed through computers. This would give rise to the need to exhaustively define the term 'document' under section 29, I.P.C.. In this connection, it is pertinent to refer to clause 11 of the Bill which seeks to amend section 29 of the Penal Code.

Under sub-clause (a) of clause 11 of the Bill, it is provided that in section 29 of the Penal Code, for the words "expressed or described", the words "expressed, described or recorded" shall be substituted. By virtue of sub-clause (b) of clause 11, for the words "figures or marks", the words "figures, images, marks or sounds" shall be substituted in section 29, I.P.C.

11.07. The Law Commission in its 42nd report, para. 2.57 recommended for a slight alteration of the language of section 29 of the Penal Code. It observed that the definition under section 29 relating to the term "document" is wide enough to cover every kind of document. Some doubt was however, noticed as to whether it includes mechanical records of sound or image. It recommended that it should include such, as mechanical devices like "tape-records" which are in frequent use.

It referred to the decision of the Supreme Court in Pratap Singh Kairon, AIR 1964 SC 72 (86) (para. 15), that a conversation recorded on a tape is good evidence, and obviously if a person forges a tape record, he ought to be punishable the same way as a person preparing a false document. The Commission recommended to make this clear by adding an illustration to section 29. The Commission recommended that section 29 should be revised to read as follows:-

"29. Document.-The word 'document' denotes any matter recorded upon any substance by means of letters, figures, or marks, or by more than one of those means, intended to be used, or which may be used, as evidence of that matter.

Explanation I.-It is immaterial by what means or upon what; substance the letters, figures or marks are formed, or whether the evidence is intended for, or may be used in, a Court of Justice or not.

Illustrations

The following are documents-

(a) a map or plan;

(b) a caricature;

(c) a writing on a metal plate, stone or tree;

(d) a film, tape or other device on which sounds or images are recorded.

Explanation 2.-Whatever is expressed by means of letters, figures or marks as understood by mercantile or other usage, shall be deemed to be recorded by such letters, figures or marks within the meaning of this section, although the same may not be actually expressed.

Illustration

A writes his name on the back of a bill of exchange payable to his order. The meaning of the endorsement as understood by mercantile usage, is that the bill is to be paid to the holder. The endorsement is a document, and must be construed in the same manner as if the words 'pay to the holder' or words to that effect had been written over the signature."

The proposed substitution of the words "expressed or described" under sub-clause (a) of clause 11 of the Bill by the words "expressed, described or recorded" are thus intended to widen the scope of the term "document" by bringing within its import any matter even "recorded".

One may argue that by virtue of the insertion of the word "recorded" in the definition of term 'document' under section 29, I.P.C. that any matter recorded on any disc, tape, sound track or other device on or in which information is recorded or stored by mechanical, electronic or other means would fall within the ambit of the proposed amended definition of 'document' vide clause 11 of the Bill. Nevertheless, the matter is arguable both ways. Accordingly, it would be advisable to define the term 'document' on the lines of definition of 'document' given under section 8(1)(d) of the Forgery and Counterfeiting Act, 1981 (U.K.).

11.08. Therefore, the term 'document' as defined in section 29, I.P.C. may be enlarged so as to specifically include therein any disc, tape, sound track or other device on or in which any matter is recorded or stored by mechanical, electronic or other means. These words also find place in section 8(1)(d) of the Forgery and Counterfeiting Act; 1981 (U.K.) Quoted abovc. In order to achieve this purpose, in addition to the amendment proposed to be added vide clause 11 of the Bill, we recommend that a new Explanation 3 be also inserted in section 29, I.P.C. on the following lines:-

"Explanation 3.-The term "document" also includes any disc, tape, sound track or other device on or in which any matter or image or sound is recorded or stored by mechanical or other means."

The aforesaid proposed amendment in section 29 would also necessitate consequential amendment of the term "document" under section 3 of the Indian Evidence Act, 1872 on the lines indicated above.



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