Open Access Research Article
Joinder Of Charges Through The Lens Of Financial Crimes (By-Aditya Biswas & Esha Rajan)
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Joinder Of Charges Through The Lens
Of Financial Crimes
The necessity of enacting additional
provisions based on the unique character of financial crimes
Authored By-Aditya Biswas & Esha Rajan
BBA LLB
E
In recent years, the number of cases
where a second First Information Report has been filed have been increasing.
Even though from landmark cases and popular judgements, it can be established
that the scope of second F.I.R is very limited under CrPC, however, it can be
said the law governing second F.I.Rs is still in its infancy and is now being
studied in a limited way through judicial pronouncements. This leads to the
question, whether under certain circumstances, the courts may consider it in
the interest of the administration to club the charges mentioned in the
multiple F.I.Rs. This particular practice with respect to specific cases acts
as an exception to the procedure established in CrPC and is covered under the
Sections 219-223 of CrPC, but essentially the discretion stays with the Court
whether or not to try each charge as being clubbed into one. On the other hand,
with the emerging commercial sector in India, financial opportunities are
developing at a rapid speed. But with this comes the problem of financial
crimes as along with the rapid advancements in financial frameworks and
law-making, the Nation has also witnessed non-completion, defrauding, and
cheating of investors/depositors. Economic crimes, often known as financial
crimes, includes deception and are frequently motivated by monetary gain. It
frequently entails the unauthorised transfer of property ownership for personal
use. The abuse of a position of trust distinguishes them from ordinary theft or
robbery. Financial crimes can be committed by an institution through acts of
tax evasion, money laundering, market manipulation, insurance scams etc., and
also by individuals through acts of embezzlement, bribery, identity theft,
forgery, etc. Economic crimes are regarded as a more sophisticated and separate
criminal phenomenon for a reason. The Supreme Court has drawn a clear line
between economic offences and other types of crimes, wherein it stated
that “In cases of economic offences the remedy of anticipatory bail should be
exercised exceedingly sparingly as they affect the economic fabric of the
society”. (P.
Chidambaram vs Directorate Of
Enforcement, 2019)
The Court reasoned economic crimes frequently drain funds required to improve
the country's public services and needs to be dealt with more severely. The
rise of economic crimes threatens the very wellbeing of the poor and
disenfranchised in India, where social welfare is essential in every element of
administration. India is unfortunately known for its corruption, and we have
had our share of major economic scandals since independence. Despite the fact
that many laws have been enacted to protect the rights of investors and
depositors, the exponential rise in the number of criminal cases filed by
victims of financial crimes has led us to question the legality of criminal
actions in terms of whether the crimes committed are distinct or similar enough
to be considered in criminal proceedings. Therefore, despite the fact that
joinder of charges is an exception to the general rule, in this paper we
will argue that provisions should be established for the clubbing together of
charges recorded in multiple F.I.Rs, for financial crimes based on their
specific nature.
With regards to joinder of charges
relating to financial statements, one of the determinative factors is the
distinction between same offences. The test of sameness though established in
the T.T. Antony v. State of Kerala, was moulded in the State of Jharkhand v Lalu
Prasad judgement with a shift in perspective. Clarity was drawn on the fact
that the test of sameness cannot be applied on the ‘same kind of offence’. A
distinction was observed between same offence and same kind of offence, holding
for both the types of offences to not mean the same thing. In the case of
financial crimes, offences such as cheating of a large number of investors
threw open a number of questions, with there being ambiguity in the
interpretation of clubbing all complaints into one. Which would mean deeming
all but one investor as witnesses, while one being the complainant against the
accused in a single F.I.R (Tripathi, 2019). The court had to take a
stance as to whether each instalment of payment constitutes for a separate
transaction, and how many such transactions could be unified into the same
F.I.R. Secondly, as to whether deposits of multiple victims of the same fraud
can be amalgamated as a pool of witnesses, headed by one complainant would be
with the consonance of law (Tripathi, 2019). Ultimately leading to the
primary question of what exactly constitutes to comprise of ‘same transaction’
when different cases are filed against the accused in cases of cheating
multiple people under section 218 and 220 of CRPC (Khaitan, 2021). The
interpretation of the meaning of ‘same transaction’ was understood through the
judgement of Shapurji Sorabji and Anr v. Emperor, wherein ‘continuity’ of the
transaction was given a deeper meaning. “Holding it to be a new
transaction, if on following up of
some initial act through all its consequences and incidents until the series of
acts or group of connected acts comes to an end, either by attainment of the
object or by being put an end to or abandoned” (Shapurji Sorabji and Anr. v. Emperor, 1935). This would be
the case irrespective of the continuance of the general purpose of the series
of transactions. Ruling that numerous fraudulent transactions through the
course of a period of time could only be tried on one account in the same
trial, as long as all the transactions are part of the same conspiracy.
However, in cases of financial scams involving multiple investors, wherein the
deposits are different, modes and dates of payments are different, and various
other particulars vary and distinct to each depositor, then each and every
complaint registered by the investors constitutes to be an offence by itself (Manoj
Reddy v. Commissioner of Police, 2008). This position of law was arrived at
in the ruling of Manoj Reddy v Commissioner of Police. Finally in the case of
State v. Khimji Bhai Jadeja, the courts explicated on the interpretation of
same transactions. It was held that Investigating
Agency/ Police cannot amalgamate the separate offences investigated under
separate F.I.Rs, into one charge sheet (State v. Khimji Bhai Jadeja,
2019).
Needing a separate final report is required to be drafted with respect
to each F.I.R. Therefore, taking up each transaction as a separate F.I.R would
not be optimal as “although the modus operandi may have been the same, the
several instances of cheating were not part of the same transaction in the
present case; the instances of cheating were in pursuance of the conspiracy and
were therefore only parts of the transaction” (Swamirathnam v. State
of Madras, 1957).
Talking about the joinder of charges
with respect to the nature of the financial offences committed, the second
aspect which comes into play is the application of one of the most fundamental
tests i.e., the ‘test of consequence’. It essentially checks if the offence registered
under subsequent F.I.R’s are directly the consequence of the offence alleged to
have occurred under the F.I.Rst F.I.R. To determine if the offence registered
under second F.I.R is a consequence of the one in the F.I.Rst F.I.R, the
proximity of time, place, motive, and action of the multiple offences committed
must be taken into consideration, which would further answer the question that
whether the facts of the case in question amount to the commission of a ‘single
conspiracy’. In a particular case of the appellants were put to trail for
specific offences of cheating in furtherance of a conspiracy and for the
offence of cheating the members of public. The Supreme Court held that “Where
there was a single conspiracy that spanned several years with the goal of
defrauding members of the public, those instances of cheating that were a part
of the conspiracy form the same transaction and those that were carried out in
the course of the
conspiracy are thus parts of the same
transaction, leaving several other instances of cheating to be treated as
separate transactions under the same conspiracy. The fact that multiple
incidences of cheating occurred in the course of carrying out the conspiracy
meant that the various acts of cheating were all part of the same transaction.
As the modus operandi may have been the same, it was suggested that the
instances of cheating were in pursuance of the conspiracy and were therefore
parts of the same transaction.” (Swamirathnam v State of Madras, 1957)
Secondly, in another case, the accused took large sums of money from various
treasuries between 1990 and 1996 by submitting forged allotment letters and
withdrawing money from various locations. The Supreme Court rejected the plea
of considering multiple offences in furtherance of a single conspiracy and held
that “due to the lack of continuity of action, and lack of proximity of time,
place, money etc. in the cases in question, it's probable that the accused's
method of taking money from government treasuries under false allocation
letters was the same, but the withdrawals were performed at different locations
and times. The same purpose does not indicate that such plots are linked to
larger ones and therefore the petition of the accused to consider multiple
offences as a single conspiracy was rejected.” (State of Andhra Pradesh v
Cheemalapati Ganeswara Rao, 1850) Lastly in another case where the accused
allegedly withdrew money from the Bihar’s State treasury on the basis of forged
and fabricated allotment letters for making payment to non-existing suppliers,
the High Court established the criteria for clubbing multiple offences into a
single conspiracy by stating that “The fact that the accused persons in both
cases are not the same is irrelevant, because even in single-transaction cases,
distinct sets of accused persons commit different offences. The trial court had
to decide whether a series of acts committed by the accused persons, forming
different offences at different times and in different places, were with the
intent to fulfil one common purpose and if there was a continuity of
criminal intent to form a single transaction, or whether different offences
were committed independently with the intent to fulfil different purposes or
objects, despite similarities between the purpose in the cases.” (Lalu
Prasad v State of Bihar, 2007) All these cases indicate the Court’s
reasoning towards financial offences and establishes that multiple offences
registered under subsequent F.I.R’s relating to the same conspiracy needs to
conform with the principle of Res Gestae, wherein the facts form a part
of the same transaction automatically or naturally. When multiple F.I.R’s are
to be filed, the particulars defined in them have to be self-evident with
respect to the previous F.I.R, and the facts of the same become significant
only when their relation is established with respect to their connection to the
main transaction. Looking closely at
the judgements of the cases mentioned
above the Courts have clearly established the necessity of proximity when
taking into consideration multiple transactions, as continuity of sub-actions
with relation to the main motive establishes the link between the individual
events. Furthermore, using this reasoning we can determine the importance of
proximity and continuity for separate events when determining the validity and
permissibility of multiple F.I.R’s as decided by the Courts based on different
facts and circumstances. This brings us back to the application of ‘consequence
test’ while determining the validity of multiple F.I.R’s. The applicability of
the consequence test is mainly established by proximity and continuity in the
accused's acts, as these two components are the fundamental considerations in
establishing whether the offence filed under subsequent F.I.R's is a
consequence of the prior one. Therefore, if the consequence test checks out
with respect to multiple interconnected F.I.Rs considering the facts of the
case, it subsequently establishes the need for joinder of charges. Furthermore,
when it’s established that a group of facts particular to multiple F.I.Rs are
so intrinsically linked together so as to involve certain ideas namely,
continuity, unity, and connection, then the only logical avenue is to club them
together under joinder of charges. (Azam Shah v State, 1990) Hence,
joinder of charges for multiple F.I.Rs where the consequence test has been
established, is the most reasonable thing to do because the proximity and
continuity of the transaction has been established, indicating that they should
be grouped together due to their interdependent nature.
The question concept of permissibility of second F.I.R and joinder
of charges can also be analysed through the lens of the doctrine of double
jeopardy. The system of jurisprudence of law involves ensuring penalising the
wrongdoer just to the extent of the wrong done by him. A corollary to which,
would mean, the legal system in place does not propose to unduly punish one
excessively or repeatedly for a given offence. Protection against double
jeopardy is laid down in section 300 of CrPc which can be read along with
article 20(2) of the constitution of India. The rule of law established is such
that says, “no person shall be prosecuted and fined for a constant offence over
once” (The Constitution of India). While the protection under the
constitution is promising enough, it must be noted that the protection provided
under article 300(1) is of a much wider scope as laid down in Kolla Veera
Raghav Rao v. Gorantla Venkateswara Rao and Ors (Kolla Veera Raghav Rao v.
Gorantla Venkateswara Rao and Ors, 2011). Thereby “forbidding a second
trial, not merely a second conviction, for the same offense in an effort to
prevent criminal trials from becoming an instrument for unnecessarily badgering
individuals” (John English Jr., 1971). The principle behind this is to ensure
the state optimally utilises all its resources and
agency, not allowing duplicate charges to be levelled against the
same individual to the convict him for the same offence. If the courts were to
adopt the same transaction criteria as part of the double jeopardy clause in
relation to the collateral estoppel theory, then joinder of charges would be a
required compulsion rather than discretionary (John English Jr., 1971).
Granting the joinder of charges application would befit both the prosecution
and the accused in a criminal trial. Further prosecutions against the accused
would only be allowed in circumstances wherein "the interests of
justice" demanded that joinder not be used in the F.I.Rst trial, this
would safeguard the defendant from excessive persecution and harassment (John
English Jr., 1971). And is beneficial for the prosecution, the rulings of the
multiple joined charged need not be consistent with each other as each specific
count in a joint charge trial is tried independently from the other counts.
Although it must be noted that joinder of charges must not be permitting in
certain instances where; if the crimes are so convoluted that they would
further complicate the issues, if the offences are entirely unrelated to one
another with little overlap with each other, and if clubbing of the charges would
create a bias towards the prosecution (John English Jr., 1971). Thus, weighing
the arguments, permitting the clubbing of charges clearly prove beneficial to
both parties, and most importantly inhibits the process of initiating a second
trial from becoming a mechanism of causeless badgering to the accused.
Conclusion
Joinder of charges with respect to
multiple F.I.Rs in case of financial crimes remains an underdeveloped area of
research which intertwines criminal procedure code along with the application
of judicial powers. Considering the arguments presented in the paper, it can be
contended that there is a dire need of creation of specific provisions in the
Code of Criminal Procedure for the joinder of charges recorded in multiple
F.I.Rs, in case of financial offences where the continuity of each offence has
been determined as a part of a single conspiracy. Creation of new provisions
relating to the same would also reduce the Courts workload as instead of trying
multiple cases relating to the same conspiracy, these provisions would create a
statutory arrangement wherein all of them are clubbed together and tried as a
single case. Historically the workload and constant inflow of cases in Courts
has been a major problem. Statistics show that pendency in all courts increased
by 2.8 percent every year between 2010 and 2020. Also, there are 4.70 crore
cases pending in various courts in the country, out of which 3.9 crore are
related to district and subordinate courts. (PRS, 2021) Thus, establishing provisions
for the joinder of cases in financial crimes would serve a dual purpose: it
would reduce the Courts' workload as mentioned above, and uphold the true
essence of a well-functioning justice system by effectively and efficiently
delivering justice in cases involving a single conspiracy. Furthermore, it
would uphold the principle dictating double jeopardy by ensuring a speedy trial
rather than having a long-drawn-out process spread across multiple courts,
which inherently hinders judicial effectiveness.
Bibliography
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Article Information
Joinder Of Charges Through The Lens Of Financial Crimes (By-Aditya Biswas & Esha Rajan)
Authors: Aditya Biswas, Esha Rajan
- Journal IJLRA
- ISSN 2582-6433
- Published 2022/09/02
- Volume 2
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
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