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CHANGING DIMENSIONS OF BAIL JURISPRUDENCE IN ECONOMIC OFFENCES
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CHANGING DIMENSIONS OF BAIL
JURISPRUDENCE IN ECONOMIC OFFENCES
AUTHORED BY - RASHINA THESNIM
LLM (Criminal Law)
Government Law College, Ernakulam
INTRODUCTION
Socio-economic offences are those
which not only affects the country economically but they also damage the very
fabric of the society. The primary intention behind treating economic offences
as a separate class of crime stem from the fact compared to a regular offence
which is generally directed towards a particular person or section of society,
economic offences affect and harm the populace at large by impairing the
economic stability and wellbeing of the nation. Economic
offences not only inflict pecuniary losses on individuals but also damage the
national economy and have security implications as well. The offences of
smuggling of narcotic substances, counterfeiting of currency and valuable
securities, financial scams, frauds, money laundering and hawala transactions
etc. evoke serious concern about their impact on national security.
The
incarceration of an accused pending trial is considered necessary in the
interests of justice when there is a reasonable apprehension that he might
attempt to subvert the case against him by tampering with the evidence, by
intimidating the witnesses, or where he poses a flight risk. In absence of such
apprehensions, it is considered judicious to release the accused from custody
on bail. In Sanjay Chandra v. CBI[1],
the Supreme Court held that the object of bail is neither punitive nor
preventative, it is merely to secure the appearance of the accused at the trial
by a reasonable amount of bail. The Court further held that the deprivation of
liberty must be considered a punishment unless it is absolutely necessary in
the interests of justice. However, the approach of the judiciary
towards granting bail to economic offenders is that bail should be granted only
in exceptional cases after taking into consideration the relevant factors of
the case and the prejudice that has been caused to society.
Economic
offences are well-planned and organized crimes. They act as facilitators for
other crimes. They drain the public wealth and elevate economic inequalities.
Keeping in mind the consequences of such offences on the society, the courts
have classified them to be of a distinct class.
Nature of Economic Offences;
An economic
offence is a rampant and pervasive social wrongdoing; each country on the
planet is confronting this socio-economic challenge in one or the other form.
It is the most consequential threat to a nation’s economy at large and law in
particular. In Y.S. Jagan Mohan Reddy v. CBI[2],
the Supreme Court explained the nature of economic offences and went on to hold
that “the economic offences having deep-rooted conspiracies and involving huge
loss of public funds need to be viewed seriously and considered as grave
offences affecting the economy of the country as a whole and thereby posing
serious threat to the financial health of the country.
Economic offences unlike
regular offences are not stand alone in nature. i.e they are of continuing
nature. The concept of an offence of a continuing nature was explained by the
Supreme Court in State of Bihar v. Deokaran Nenshi[3]
“A continuing offence is one which is susceptible of continuance and is
distinguishable from the one which is committed once and for all…the
distinction between the two kinds of offences is between an act or omission
which constitutes an offence once and for all and an act or omission which
continues, and therefore, constitutes a fresh offence every time or occasion on
which it continues. In the case of a continuing offence, there is thus the
ingredient of continuance of the offence which is absent in the case of an
offence which takes place when an act or omission is committed once and for
all...”
Thus, as distinguished from
general offences which are of a standalone nature, in a continuing offence the
commission or consequences of such a crime is not affected over a small period
of time or on a single occasion but are rather spread out over a considerable
period of time. An example of such an offence is money laundering. Thus, in the
case of a continuing offence, it is difficult to ascertain the conclusion or
termination of the criminal act and its object. For example, in the case of
money laundering, while the initial part of the offence is over quickly, the
proceeds of the illegal act can theoretically be utilized over an indefinite
period of time. It is in this background that releasing on bail an accused who
is charged with committing an offence of a continuing nature becomes
problematic since it is highly probable that he will attempt to frustrate the
case against him especially since the criminal act would still be in
progress.
In Central Bureau of
Investigation v. Jagjit Singh[4],
the Supreme Court observed that economic offences not only creates a
hazard in the financial interest of the society but also creates a deep dent in
the economic spine of the nation.
The approach of the judiciary
towards economic offenders can be saw in observations made by the Supreme Court
in State
of Gujarat v. Mohanlal Jitamalji Porwal[5]
wherein the Court laid down that the: “… entire community is aggrieved if the
economic offenders who ruin the economy of the State are not brought to book. A
murder may be committed in the heat of moment upon passions being aroused. An
economic offence is committed with cool calculation and deliberate design with
an eye on personal profit regardless of the consequence to the community.”
In Prem
Kumar Parmar v. State[6],
the Court observed that such offences are even worse than murders. It
was observed that “The economic
offences having deep rooted conspiracies and involving huge loss of public
funds whether of nationalized banks or of the State and its instrumentalities
need to be viewed seriously and considered as grave offences affecting the
economy of the country as a whole and thereby posing serious threat to the
financial health of our country. Therefore, the persons involved in such
offences, particularly those who continue to reap the benefit of the crime
committed by them, do not deserve any indulgence and any sympathy to them would
not only be entirely misplaced but also against the larger interest of the
society. The Court cannot be oblivious to the fact that such offences are
preceded by cool, calculated and deliberate design, with an eye on personal
gains, and in fact, not all such offences come to the surface. If a person
knows that even after misappropriating huge public funds, he can come out on
bail after spending a few months in jail, and thereafter, he can continue to
enjoy the ill-gotten wealth, obtained by illegal means, that would only encourage
many others to commit similar crimes in the belief that even if they have to
spend a few months in jail, they can lead a lavish and comfortable life
thereafter, utilizing the public funds acquired by them.”
In a recent judgment[7], the Delhi High Court held
that “… economic offences are offences which corrode the fabric of
democracy and are committed with total disregard to the rights and interest of
the nation and are committed by breach of trust and faith and are against the
national economy and national interest….” These observations made by the High
Court are in line with the views expressed by the Supreme Court holding
economic offenders to be “a menace to the society”[8].
Judicial Trends Towards Bail in
Economic Offences;
The origins of
the distinct treatment of economic offences vis-à-vis general offences at the
stage of bail can be traced back to a batch of petitions that were heard by the
Supreme Court back in 2013[9]. In Y.S.
Jagan Mohan Reddy v. CBI[10],
the Supreme Court while dealing with the bail applications for offences under
the Prevention of Corruption Act discussed the concept of an economic offence
and its ramifications on the society at large and held that “Economic offences
constitute a class apart and need to be visited with a different approach in
the matter of bail. While granting bail, the court has to keep in mind the
nature of accusations, the nature of evidence in support thereof, the severity
of the punishment which conviction will entail, the character of the accused,
circumstances which are peculiar to the accused, reasonable possibility of
securing the presence of the accused at the trial, reasonable apprehension of
the witnesses being tampered with, the larger interests of the public/State and
other similar considerations.”
The landmark judgment
delivered in Jagan Mohan Reddy[11] has
been pivotal in changing the approach from bail as rule to custody as rule in
cases concerning economic offences. The judicial approach laid down in Jagan
Mohan Reddy was thereafter followed by the Supreme Court in Gautam
Kundu v. Directorate of Enforcement[12]wherein
the petitioners who were charged with offences under the Securities and
Exchange Board of India Act, 1992 and the PMLA Act had challenged the order
passed by the Calcutta High Court denying them bail. The Supreme Court relying
on the precedent laid down in Jagan Mohan Reddy upheld the order passed by the
High Court. The Court further went on to discuss the rationale behind the
distinct treatment of economic offender and held that there is no doubt that
PMLA deals with the offence of money laundering and Parliament has enacted this
law as per commitment of the country to the United Nations General Assembly.
PMLA is a special statute enacted by Parliament for dealing with money
laundering.
In State of Bihar v. Amit Kumar[13],
the Supreme Court while dealing with a matter concerning large scale fraud in
intermediate examinations in Bihar reiterated the law laid down in Jagan Mohan
Reddy and held that “It is well settled that socio-economic offences constitute
a class apart and need to be visited with a different approach in the matter of
bail. Usually, socio-economic offence has deep-rooted conspiracies affecting
the moral fibre of the society and causing irreparable harm, needs to be
considered seriously. When the seriousness of the offence is such, the mere
fact that he was in jail for however long time should not be the concern of the
courts. We are not able to appreciate such a casual approach while granting
bail. The government’s interest in preventing crime by arrestees is both
legitimate and compelling. Although “bail is the rule and jail is an exception”
is well established in our jurisprudence, we have to measure competing forces
present in facts and circumstances of each case before enlarging a person on
bail.”
The Supreme Court in P. Chidambaram v. Directorate of
Enforcement[14]
recognizing the long-term ramifications of economic offences and laid down
that: “Power under Section 438 CrPC being an extraordinary remedy, has to be
exercised sparingly; more so, in cases of economic offences. Economic offences
stand as a different class as they affect the economic fabric of the society.
The privilege of the pre-arrest bail should be granted only in exceptional
cases… Exercising the power to grant anticipatory bail in cases of the
Prevention of Money-Laundering Act would be to scuttle the statutory power of
the specified officers to arrest which is enshrined in the statute with
sufficient safeguards… Grant of anticipatory bail, particularly in economic
offences would definitely hamper the effective investigation.” The Court
further held that a delicate balance is required to be established between
safeguarding the personal liberty of an individual and the societal interest,
and refusal to grant anticipatory bail cannot be termed as a denial of the
rights conferred upon the accused under Article 21of the Constitution of India.
In this case, the Court also recognized that money laundering poses a serious
threat not only to the economy of the country but also to its integrity and
sovereignty.
A similar view was taken by
the Court in Serious Fraud Investigation Office v. Nittin Johari[15]
where the Court while dealing with a bail application under Section 212(6) of
the Companies Act, 2013, which imposes similar twin conditions for bail, once
again reiterated that economic offences constitute a class apart and need to be
viewed seriously and considered as grave offences affecting economy of country
as a whole and thereby posing serious threat to the financial health of the
country. Cases involving economic offences are among a small minority of crimes
where the court has regularly overruled fears associated with custodial
interrogation and has gone on to favour incarceration of the accused to
facilitate a fruitful investigation by the authorities.
CONCLUSION
From
the above discussion, it is apparent that there is a departure from the basic
jurisprudence of bail being the norm and jail being the exception to a scenario
where custody has become the rule in economic offences considering the gravity
of economic offences whose ramifications are far-reaching and extend over a
prolonged period of time. In other words, the courts have departed from
the basic jurisprudence of bail being the norm and jail being the exception and
have put the interests of society first in preventing and punishing economic
offenders. Judicial decisions suggest certain factors that are to be kept in
mind while exercising discretion in granting of bail. A person who is able to
commit an economic offence can easily tamper with evidence and cause
obstructions to the investigation process and thus courts should exercise
greater caution while dealing with application for bail in such cases.
[1] (2012) 1 SCC 40
[2] (2013) 7 SCC 439
[3] (1972) 2 SCC 890
[4] (2013) 10 SCC 686
[5] AIR 1987 SC 1321
[7] Malvinder Mohan Singh v. State, 2020 SCC OnLine Del 2001
[8] Enforcement Officer v. Bher Chand Tikaji Bora, (1999) 5 SCC
720
[9] Y.S. Jagan Mohan Reddy v. CBI, (2013) 7 SCC 439, Nimmagadda
Prasad v. CBI, (2013) 7 SCC 466.
[10] Supra Note 2
[11] Supra Note 2
[12] (2015) 16 SCC 1.
[13] (2017) 13 SCC 751
[15] (2019) 9 SCC 165
Article Information
CHANGING DIMENSIONS OF BAIL JURISPRUDENCE IN ECONOMIC OFFENCES
Authors: RASHINA THESNIM
- Journal IJLRA
- ISSN 2582-6433
- Published 2023/09/19
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International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
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