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Report No. 47

The Trial and Punishment of Social and Economic Offences

Chapter 1

Introductory

1.1. Reference to the Commission.-

This Report deals with the question of effective implementation of the material provisions of certain Acts. These offences may briefly be described as social and economic offences. The broad question which has been referred to the Commission can be thus stated1-

"The Government of India had under consideration the question of effectively dealing with certain anti-social and economic offences. There are certain special Acts intended for the benefit of general public and the offences under such Acts are anti-social in nature. There are special legislations as Essential Commodities Act, Prevention of Food Adulteration Act, Drugs (control) Act, Imports & Exports (control) Act, Foreign Exchange Regulation Act, etc. These anti-social offences also extend to deliberate evasion of taxes and the question that arises for consideration is how drastically and swiftly penal action can be taken to prove a deterrent against commission of such offences.

The present trend of legislation and also the judicial approach to such offences appears to be that these offences are treated lightly and the punishments are not adequate having regard to the gravity of such offences. The Government of India would like to have a well-considered opinion of the Law Commission as regards desirability of dealing with adequately and swiftly such anti-social and economic offences."

1. Letter of the Minister of Law and Justice dated 4th October, 1971 to the Chairman, Law Commission.

1.2. Scope of the Report.-

This Report accordingly concerns itself with the question of dealing adequately and swiftly with those offences. As we point out in a later chapter1, we thought it necessary to widen the scope of our inquiry by including within its purview questions about investigation, prosecution, trial and punishment in respect of proceedings taken under these Acts. We wish to make it clear that we are not dealing with contents or structure of these Acts.

1. Para. 2.1, infra.

1.3. Previous Report.-

It may be stated here that the question whether social and economic offences should be included in the Indian Penal Code has been considered at length in a Report of one of the earlier Law Commissions3, and it is outside the scope of this Report.

1.4. Social and economic offences.-

By now, the concept of anti-social acts and economic offences has become familiar to those acquainted with the progress of the criminal law and its relationship to the achievement of social objectives. Still, it may not be out of place to draw attention to some of the salient features of these offences.

Briefly, these may be thus summarised:-

(1) Motive of the criminal is avarice or rapaciousness (not lust or hate).

(2) Background of the crime is non-emotional (unlike murder, rape, defamation etc.). There is no emotional reaction as between the victim and the offender.

(3) The victim is usually the State or a section of the public, particularly the consuming public (i.e. that portion of which consumes goods or services, buys shares or securities or other intangibles). Even where there is an individual victim, the more important element of the offence is harm to society.

(4) Mode of operation of the offender is fraud, not force.

(5) Usually, the act is deliberate and wilful.

(6) Interest protected is two-fold

(a) Social interest in the preservation of-

(i) the property or wealth or health of its individual members, and national resources, and

(ii) the general economic system as a whole, from

(i) exploitation, or

(ii) waste by individuals or groups.

(b) social interest in the augmentation of the wealth of the country by enforcing the laws relating to taxes and duties, foreign exchange, foreign commerce, industries and the like.

1.5. Offences without individual victims.-

The most important feature of these offences is the fact that ordinarily they do not involve an individual direct victim but are punished because they harm the whole society. This constitutes the primary reason why special efforts have to be made to enforce them. If a man or woman is robbed, assaulted or cheated, there is some person who is interested in getting the offender prosecuted, and because the act is a physical one, having an immediate and direct impact, both individual and social vengeance are likely to be aroused. This element is, however absent when, for example essential commodities are hoarded, or foreign exchange is illegally taken out of the country or prohibited goods are imported.

No doubt, some social offences do involve a 'victim'. For example, when adulterated food is sold, the immediate consumer is harmed. But the criminal act is potentially capable of harming a large number of persons and that is the principal object behind punishing it. It is not, of course, suggested that offences falling within the general criminal law are not to be regarded as anti-social acts; and in a sense every crime is antiĀ¬social because the State, when it prosecutes, does so on behalf of the society. What is intended to be emphasised is, that the injury to society predominates in the case of some acts, while it may be in the case of others.

1.6. Categories of social and economic offences.-

The Law Commission had, in an earlier Report1, occasion to deal with the following categories of offences, while considering the question whether provisions as to social and economic offences should be transferred to the Penal Code:-

(1) Offences calculated to prevent or obstruct the economic development of the country and endanger its economic health.

(2) Evasion of taxes.

(3) Misuse of position by public servants.

(4) Offences in the nature of breaches of contracts, resulting in the delivery of goods not according to specifications.

(5) Hoarding and Black-marketing.

(6) Adulteration of food and drugs.

(7) Theft and Misappropriation of public property and funds.

(8) Trafficking in licences, permits etc.

For the purposes of the present Report also, it is not necessary to go beyond the above offences. In fact, some of the categories mentioned above-e.g. categories (3), (4), (7) and (8) -do not present problems of enforcement with much frequency and seriousness so as to require much attention.

1. 29th Report of the Law Commission.

1.7. Offences of strict liability.-

It is well known that while most of the offences under the Penal Code rule out absolute liability, the same is not true of many offences under the special laws. Considerations of the need of enforcement have led to the creation of absolute liability. Some of the acts punishable under special laws may be regarded as "public welfare offences", "regulatory offences" or "civil offences'', while some of the acts can be regarded as akin to traditional crimes.



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