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Report No. 47

Chapter 9

Desirability of Amendments as to Jurisdiction, Procedure and Limitation

9.1. Introductory.-

A study of the relevant material concerning the prosecution of persons for the economic offences in question, including statistics of convictions and the judgments of the Courts, led us to the tentative belief, even during our earliest deliberations, that these offences could not be dealt with adequately except by special courts constituted more or less exclusively for trying them. A Judge entrusted with the trial of offences generally, we felt, finds it difficult to see these offences in the proper perspective of their impact on the nation's life. Probably, while trying traditional offences against the person or against property, in the discharge of his duties, when he comes to try an economic offence which does not, after all, result in harm to any specific individual or his property, it is easy for him to lapse into a feeling that he is not confronted with any serious offence or with one that represents a serious danger to the community.

9.2. Judicial attitudes.-

That this has been so, is amply demonstrated by the way in which an otherwise unaccountable leniency has often been shown in sentencing persons convicted for these offences. Even where the law has prescribed the minimum sentences for imprisonment, to be waived only in exceptional circumstances in the discretion of the Court, the accused have been let off on such grounds1 e.g., that the accused 'appears to be' of young age, the accused is only a carrier, this is only his first offence, the accused is an old man, the accused has already been fined heavily in the Departmental proceedings, the accused has made a confession of his guilt, the accused has incurred considerable expenditure in defending himself, the accused is a family-man, and so on. It is hardly necessary to add that these considerations do not constitute judicially valid grounds for not awarding the minimum sentence prescribed by law.

1. See Chapter 7, supra.

In the matter of conviction also there has often been an unduly excessive indulgence in favour of the accused. In one case where the accused, notorious for his record of economic offences, had concealed and withheld from the Reserve Bank of India information regarding his ownership of shapes in foreign companies and thus committed the offence of, 'holding' such foreign shares without the knowledge of the Reserve Bank, the court treated the offence as merely a technical one and let him off with a fine of Rs. 10,000, which, of course, for him was as good as acquittal.

9.3. Special Courts-Advantages of.-

The appointment of special courts for the trial of these offences will not only enable the judges who try these offences to develop a sense of perspective and expertise but will also have several additional advantages. The very appointment of such courts will highlight the social importance of such prosecutions. It will also enable the judiciary to develop a new perception and a new and appropriate attitude of concern for such offences. And, above all, if properly armed with an expeditious procedure, these special courts will be able to create the suitable social climate in which the reprehensible anti-social character of these offences will be more adequately brought home to both the general public and the offenders themselves.

9.4. During our discussions with members of the public, the Bar, and government officials, there was almost unanimous support for the general proposition that the economic offences in question should be tried by special courts empowered to follow a special speedy procedure.

9.5. Various patterns of special courts considered.-

We examined various patterns for the establishment of these special courts. One pattern is provided by special tribunals which have been constituted from time to time for the trial of terrorist crimes or other offences disturbing the security of the country, like the one established under the Criminal Law Amendment Act, 1908. Another is provided by the special tribunals contemplated by the Defence of India Act. The so-called "section 30 Magistrates" (to be replaced by the Chief Judicial Magistrates and Additional Chief Judicial Magistrates under the recent Cr. P.C. Bill1), afford yet another pattern of courts specially empowered to try certain class or classes of offences2. But neither of these patterns appeared to us to be satisfactory for the present purpose.

1. See (a) the 41st Report of the Law Commission.

(b) The Criminal Procedure Code Bill, 1970. Commission.

2. As to the Criminal Law Amendment Act, 1952, see para. 9.8, infra.

9.6. Economic offences constituting serious threats.-

We view the economic offences under consideration as constituting a serious new challenge to the economic integrity and well-being of society. We share the view of all those who had to deal with these offences that the existing legal weapons as such are not adequate to protect society from those engaging in their commission. We feel that new instruments and procedure must inevitably be devised.

9.7. New Instrument necessary.-

The new instrument which we propose is a special court which will have exclusive jurisdiction to try these offences. In order to be effective, the special court must not take up any other work, and must develop perception and expertise in the trial of these offences only. In order to be effective, its judgments should be subject to not more than one appeal only, to the High Court, both on questions of fact and on questions of law. The court must have power not only to convict and punish an accused person of the offence specifically charged, but also for an offence under-an Act dealing with similar offences for which he has not been specifically charged, provided that the rules of natural justice have been duly observed, and he is afforded a fair opportunity to defend himself in respect of such charge. It should have power to impose any punishments prescribed by law for the offences of which the accused before it is found guilty.

9.7. Variety of provisions needed.-

We suggest that these courts should be manned by senior and experienced Judicial Officers of the.rank of the Sessions Judge. And, above all, it must follow a special and speedy procedure for the trial of these offences. This procedure, of course, must satisfy the requirements of a fair and impartial trial. But, subject to this, it should be specially devised to cut down delays and various ingenious forensic stratagems to escape the clutches of law and delay, if not frustrate, the administration of justice. Thus, this procedure should avoid the cumbersome and needlessly repetitive process of commital, and should permit the special court to take cognizance of offences without commital.

In other words, the special court should follow substantially the procedure for the trial of warrant cases. The procedure should permit the transfer of cases from one special court to another, and should provide that the special court to which a case is transferred shall not be bound to resummon or re-hear witnesses unless it is satisfied that such a course is necessary in the interests of justice. It should have power to refuse to summon witnesses. Provision should be made that it will not be bound to adjourn a trial for any reason unless such adjournment is necessary in the interests of justice.

The special court should not be required to adjourn proceedings for the purpose of securing the attendance of a legal practitioner if it is of the opinion that such adjournment would cause unreasonable delay. It should have powers to deal with refractory accused, and to proceed with the trial in the absence of an accused who, by his voluntary act, renders himself incapable of appearing before the court or resists his production before it or behaves before it in a persistently disorderly mariner. It should have power to refuse to summon any witness if it is satisfied that the evidence of such witness will not be material.

9.7. The courts trying such offences should have power to direct that proceedings be started against another person not charged before it, if it is satisfied1 that he is prima facie guilty of any offence punishable under the act or acts in question, and on such an order being passed, the person concerned will be tried accordingly.

1. This point is developed in Chapter 11, infra.

9.8. Right of accused not affected.-

The above provisions, calculated to make enforcement of law and justice more effective and speedy are, it will be noticed, carefully drawn to steer clear of the right of the accused to a fair trial based upon a full opportunity of making his defence with the help of a lawyer. This right is not only guaranteed to him in Article 22 of the Constitution, but is one that ought to be respected in any civilised system of administration of justice. In fact, the procedure outlined above is not novel, nor is it being suggested for the first time after the commencement of the Constitution. Many of its features are to be found in the Criminal Law Amendment Act passed by Parliament for the trial of offences relating to bribery and corruption1.

Again, a procedure with all these features had been adopted by the various States for the speedy trial of certain offences in certain cases, presumably because the State Governments felt that there was an abnormal growth of incidence of certain offences and failure to try them speedily.and to punish them effectively would shake the faith of the general public in the administration of justice itself. It is true that the West Bengal Special Courts Act, 1950, which laid down such a procedure, was struck down as unconstitutional by the Supreme Court in Anwar Ali's case2.

But, then, the ground on which the Court struck down the West Bengal legislation was not that the procedure was unfair or otherwise reprehensible, but on the ground that the impugned Act authorised the State Government to pick and choose individuals arbitrarily for trial by the special procedure. In later cases3 where no such arbitrary picking and choosing was involved, the Supreme Court upheld such procedure. In fact, in Kedar Nath's case4, the Supreme Court even permitted picking and choosing of individuals and thus considerably watered down the authority of the decision in Anwar All's case, if not altogether destroyed it.

1. The Criminal Law Amendment Act, 1952.

2. State of West Bengal v. Anwar Ali, AIR 1952 SC 75: 1952 SCR 284.

3. Kathi Raning Rawat v. State of Saurashtra, AIR 1952 SC 123.

4. Kedar Nath Bajoria v. State of West Bengal, AIR 1953 SC 404 (405, 407).

9.9. Recommendation as to Special Courts.-

We, therefore, propose that Parliament should enact a comprehensive law authorising the setting up of special courts and laying down a special procedure for the effective and speedy prosecution of all the economic offences under reference on the lines indicated above. The proposed law may conveniently be drafted by adopting the pattern and the provisions of the West Bengal Special Courts Act, 1950, mutatis mutandis, with the difference that the provisions struck down by the Supreme Court in Anwar Ali's case1 authorising the picking up of individual cases may be dropped, and necessary modifications may be introduced to carry out the suggestions regarding procedure made elsewhere in this Report2.

This law may be titled the Special Courts (Economic Offences) Act, and may be left flexible enough to permit additions to the list of the economic offences to be tried by the Special Courts which it authorises to be set up. It should apply to offences under all the major Acts with which this Act is concerned,-except the Wealth Tax Act and the Income-Tax Act. When the taxation laws are simplified, they could be brought within the scope of the new Act creating Special Courts which we have recommended above.

1. State of West Bengal v. Anwar Ali, AIR 1952 SC 75: 1952 SCR 284.

2. See particularly remaining paragraphs of this Chapter and Chapter 11, infra.

9.9A. Procedural recommendations common to various Acts how to be implemented.-

In our discussion of the amendments of a procedural nature1 which we have recommend at various places in this Report, as amendments common to more than one Act, we have stated that the necessary provisions be inserted in the relevant Acts. But, if a Special Courts Act is passed, as recommended by us2, then that act will include those provisions.

1. For a convenient collection, see Summary at the end of this Report, Part relating to Amendments common to more than one Act.

2. Para. 9.9, supra.

9.9B. Consequential amendment in provisions as to summary trials and other procedural provisions.-

The recommendation for the trial of these offences by special Judges appointed under the new Act, will render it necessary to make consequential changes in a few procedural provisions; in the various Acts, and some of them-e.g., the provisions as to summary trials-may even become totally obsolete, framed as they are with reference to trials before Magistrates. It has not been considered necessary to discuss all these changes in this Report; but those will have to be carried out.

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