How decriminalisation of minor offences for improving business sentiment and unclogging court processes is bad and perverse

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This article is written by Yogesh V Nayyar, Advocate, Member, International Council of Jurists, London & Supreme Court of India.

Introduction

It’s the base fundamental of Law, specially under the Criminal Law which is codified and is governed and implemented through procedure of Courts and systemized for penalizing any offender for any unlawful act, breach of any law be it under Indian Penal Code or any special statue, by virtue of Criminal Procedure Code, the Courts established in India through trials assess the evidence and thus punish the offenders; if found guilty.

Under the sanction of the law, punishment is retribution on the offender to the suffering in person or property which is inflicted by the offender. Punishment is a process by virtue of which an offender is deterred from perpetually getting involved in committing offences against person, property, and government. As such Criminal Jurisprudence lay down theories and punishments based on those theories viz: deterrent, rehabilitative, restorative and retributive.

Under the Criminal Law, depending upon the nature of offence, infliction of injury to person, state the offences and their respective punishments are categorized as Bailable offences and Non-Bailable offence and fall under the category of cognizable and non-cognizable offences, thus having governing factors:

  • The gravity of the violation;
  • The seriousness of the crime; and
  • Its general effect upon public peace and tranquility.

Section 222 in the Code Of Criminal Procedure, 1973 

When a person is charged with an offence consisting of several particulars, a combination of some only of which constitutes a complete minor offence, and such combination is proved, but the remaining particulars are not proved, he may be convicted of the minor offence though he was not charged with it.

Criminalization or criminalisation

In criminology, is “the process by which behaviors and individuals are transformed into crime and criminals”. Previously legal acts may be transformed into crimes by legislation or judicial decisions. However, there is usually a formal presumption in the rules of statutory interpretation against the retrospective application of laws and only the use of express words by the legislature may rebut this presumption. The power of judges to make new law and retrospectively criminalize behavior is also discouraged. In a less overt way, where laws have not been strictly enforced, the acts prohibited by those laws may also undergo de facto criminalization through more effective or committed legal enforcement. The process of criminalization takes place through societal institutions including schools, the family, and the criminal justice system.

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Principles

Several principles may underpin decisions about criminalization. These include the de minimis principle, that of the minimum criminalization. Under this principle, the general harm principle fails to consider the possibility of other sanctions and the effectiveness of criminalization as a chosen option. Those other sanctions include civil courts, laws of tort and regulation. Having criminal remedies in place is seen as a “last resort” since such actions often infringe personal liberties – incarceration, for example, prevents the freedom of movement. In this sense, law making that places a greater emphasis on human rights. Most crimes of direct actions (murder, rape, assault, for example) are generally not affected by such a stance, but it does require greater justification in less clear cases. 

The policy of “social defense” can be seen as an opposing view. It argues that criminalization is used against “any form of activity which threatens good order or is thought reprehensible”. The minimization principle may unwittingly prevent the adaptation of the law to new situations. In general, worldwide policy makers have created a myriad of smaller offences, in contradiction to the minimization principle and more in keeping with the social defence. 

Harm

Leading criminal law philosophers, such as Dennis Baker and Joel Feinberg have argued that conduct should only be criminalized when it is fair to do so. In particular, such theorists assert that objective reasons are needed to demonstrate that it is fair to criminalize conduct in any given case. The commonly cited objective justification for invoking the criminal law is harmful to others, but it cannot deal with all situations. For example, people are not necessarily harmed by public nudity. Feinberg suggests that offence to others also provides an objective reason for invoking the criminal law, but it clearly does not as offence is determined according to conventional morality. Prostitution is another grey area, as some countries allow it in different forms, and it is hard to say whether or not it specifically harms the public in general. One argument may be that prostitution perpetuates the spread of sexually transmitted diseases, including HIV/AIDS, and therefore harms the public which partakes in the act of prostitution. However, the legalization of prostitution would change the way it is regulated, and law enforcement could find a way to prevent the spread of sexually transmitted disease, thus eliminating the health issue and the question of the morality of the profession would be weakened.

People experience a range of physical and social injuries in different contexts which will vary according to the level of economic and political development of their country. Some will be injured out of poverty and malnutrition, others by violence which might stem from a major conflict such as war or from the personal violence in a robbery. The environment may be damaged by pollution; there may be hazards at work. Many of these sources of injury will be ignored while the state may delegate powers of control to a number of different agencies within an international framework where supranational agencies and human rights organisations may offer assistance in responding to the causes of those injuries.
The traditional starting point of criminalisation is the “harm principle”. John Stuart Mill stated “the only purpose for which power can be rightly exercised over the member of a civilised community against his will is to prevent harm to others”. This was approved by the Hon’ble Supreme Court in its ‘adultery judgment’, in September, 2018.

The ultima ratio of legislative policy

Criminalisation is said to be the “ultima ratio” of legislative policy – an “uttermost means in uttermost cases”. It is employed only as a last resort, when all other means – civil litigation, administrative reform, etc, have failed. Over the years, it has become the government’s first line of attack — a way for lawmakers to show that they’re serious about whatever the perceived problem of the month is.

There are several reasons to be alarmed by the exponential growth of criminal rules and regulations. In recent months, the State has used the criminal sanctions envisaged by statutes to go after media houses and lawyers critical of the government. Indians have always prided themselves in the freedoms guaranteed by their Constitution. But a society in which the criminal rules are so pervasive that no one is safe from arrest and prosecution cannot be described as free. The other problem is with the criminal process – a process which despite its safeguards has been described as “worse than the punishment”.

India’s criminal codes are now so voluminous that they bewilder not only the average citizen but also the average lawyer. Our courthouses are so clogged that there is no longer adequate time for trials. Most of our prisons are now operating well beyond their design capacity. All of this begs the question, do we need and can we afford more criminal provisions? The answer is a resounding no.

One must, however, note that decrying over-criminalisation does not mean being soft on crime. Just the opposite; in fact. Being tough on crime requires making intelligent distinctions between conduct that truly threatens the public and conduct that is better handled by fines or civil law. Those who can’t make those distinctions, far from being tough on crime, actually weaken the force of the criminal law.

Criminalization under Indian Law

“Respect for the autonomy of the individual to make his/her personal choices.” At the time when the Central Government of India brought an ordinance making pronouncement of triple talaq an offence punishable up to three years jail term, the Hon’ble Supreme Court of India said that the government should adopt minimalist approach in the criminalisation of offences and desist from criminalizing an act which is essentially civil in nature.

Writing a separate but concurrent judgment, Justice Indu Malhotra said that “in my view, criminal sanction may be justified where there is a public element in the wrong, such as offences against state security, and the like. These are public wrongs where the victim is not the individual, but the community as whole.
“The element of public censure, visiting the delinquent with penal consequences, and overriding individual rights, would be justified only when the society is directly impacted by such conduct. In fact, a stronger justification is required where an offence is punishable with imprisonment. The state must follow the minimalist approach in the criminalisation of offences, keeping in view 

Decriminalisation of minor offences for improving business sentiment and unclogging court processes

First what is to be understood as to what a minor offence mean under criminal law. The definition would elaborate and categorize whether it would be right on the part of Government of India the process of decriminalisation of minor offences for improving business sentiment and unclogging court processes as per the notification published on 08th June 2020; whereby the Government of India is in the process of decriminalisation of minor offences for improving business sentiment and unclogging court processes.

Minor offense: (Dictionary meaning)

A minor offense is a socially harmful act not provided for by criminal law or without the characteristics indicated in criminal law. Unlike a crime, a minor offense usually does not have the element of social danger, that is, the social danger is negligible in a criminal law sense. A distinction is made between civil, administrative, and disciplinary minor offenses and thus between civil, administrative and disciplinary liability. 

A criminal infraction less serious than a misdemeanor. These infractions may not even be tracked as part of a criminal record, depending on state and local laws. Generally, these types of infractions carry penalties of monetary fines and/or up to 90 days in jail. Depending on the state and local statutes, an example of a minor offense is a parking violation or traffic (driving) offense.

Perspective of Government of India for decriminalisation of minor offences

As per Government of India, decriminalisation of minor offences is one of the thrust areas of the Government. The risk of imprisonment for actions or omissions that aren’t necessarily fraudulent or the outcome of malafide intent is a big hurdle in attracting investments. The ensuing uncertainty in legal processes and the time taken for resolution in the courts hurts ease of doing business. Criminal penalties including imprisonment for minor offences act as deterrents, and this is perceived as one of the major reasons impacting business sentiment and hindering investments both from domestic and foreign investors. This becomes even more pertinent in the post COVID19 response strategy to help revive the economic growth and improve the justice system. 

Given the nature of pendency in all tiers of the courts and the time taken for disputes to be resolved, legislative measures have been considered to help restore trust in doing business. In this pursuit, it is also important that a balance be found so that malafide intent is punished while other less serious offences are compounded. Accordingly, a framework is required such that a penalty levied is sufficient to act as a deterrent. Actions taken for decriminalisation of minor offences are expected to go a long way in improving ease of doing business and helping unclog the court system and prisons. It would also be a significant step in the Government of India’s objective of achieving ‘SabkaSaath, Sabka Vikas and Sabka Vishwas’. 

Criminalizing procedural lapses and minor non-compliances increases burden on businesses and it is essential that one should re-look at provisions which are merely procedural in nature and do not impact national security or public interest at large. The following principles should be kept in mind when deciding on reclassification of criminal offences to compoundable offences: (i) Decrease the burden on businesses and inspire confidence amongst investors; (ii) Focus on economic growth, public interest and national security should remain paramount; (iii) Mens rea (malafide/ criminal intent) plays an important role in imposition of criminal liability, therefore, it is critical to evaluate nature of non-compliance, i.e. fraud as compared to negligence or inadvertent omission; and (iv) The habitual nature of non-compliance.

Government of India as per their notification is about to take a decision to decriminalize offences which in their view fall within the category of minor offences in as many as 19 Acts viz: 

Sr. No.

Act

Punishment

01

Insurance Act Sec 12 R/w Sec 147

Penalty not exceeding 25 Crores and with imprisonment up to 10 years

02.

SARFAESI Act, 2002 Sec 29

1 year with fine of both

03.

PFRDA Act, 2013 Sec 16 (7)

punishable with imprisonment for a term which may extend to 1 (one) year, or with fine, which may extend to INR 25 Crores (Indian 

Rupee twenty-five crore only), or with both, and also with a further fine which may extend to INR, 10,00,000/- (Indian Rupees ten lakh only) for every day after the first day during which the failure or refusal continues. 

 

Sec 32 (1)

punishable with imprisonment for a term which may extend to 10 (ten) years, or with fine, which may extend to INR 25 Crores (Indian Rupees twenty-five crore only) or with both. 

04.

RBI Act, 1934 Sec 58B (1) 

punishable with imprisonment for a term which may extend to 3 (three) years and shall also be liable to fine. 

 

Sec 8B (4A)

punishable with imprisonment for a term which shall not be less than one 

year but which may extend to five years and with fine which shall not be less than one lakh rupees but which may extend to INR25,00,000/- (Indian rupees twenty five lakh only). 

 

Sec 58B (5)

punishable with imprisonment for a term which may extend to three years and shall also be liable to fine which may extend, (i) in the case of a contravention falling under clause (a), to twice the amount of the deposit received; and (ii) in the case of a contravention falling under clause (b), to twice the amount of the deposit called for by the prospectus or advertisement. 

 

Section 58B (5A): 

punishable with imprisonment for a term which may extend to 2 (two) years, or with fine which may 

extend to twice the amount of deposit received by such person in contravention of that section, or INR2,000/- (Indian Rupees two thousand only), whichever is more, or with both: 

Provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court, the imprisonment shall not be less than 1 (one) year and the fine shall not be less than INR1,000/- Indian Rupees one thousand only). 

05.

Payment and Settlement Systems Act, 2007 

Section 26 (1): 

Imprisonment of a minimum of 1 month extendable to 10 years or fine up to INR 1 cr. or both Additional fine of INR 1 lakh per day once the contravention or failure to comply continues. 

 

Section 26 (4): 

Imprisonment of up to 6 months or fine which may extend to INR 5 lakh or an amount equal to twice the amount of damages incurred, which is higher or both (imprisonment and fine). 

06.

NABARD Act, 1981 

Section 56 (1): 

punishable with imprisonment for a term which may extend to three years and shall also be liable to fine. 

07.

NHB Act, 1987 

Section 49 (1)

Section 49 (2)

Section 49 (2A)

punishable with imprisonment for a term which may extend to three years and shall also be liable to fine. 

punishable with fine which may extend to two thousand rupees in respect of each offence and in the case of a continuing failure, with an additional fine which may extend to one hundred rupees for every day during which the failure continues after conviction for the first such failure. 

punishable with imprisonment for a term which shall not be less than one year but which may extend to five years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees. 

 

And other respective subsections of Sec 49 where punishment is high and carries payment of fine.

 

08.

State Financial Corporations Act, 1951 

Section 42 (1): 

punishable with imprisonment for a term which may extend to two years, or with fine which may extend to two thousand rupees, or with both. 

 

Section 42 (2): 

punishable with imprisonment which may extend to six months, or with fine which may extend to one thousand rupees, or with both. 

09.

Credit Information Companies (Regulation) Act, 2005 

Section 23 (1): 

punishable with imprisonment for a term which may extend to one year and shall also be liable to fine. 

10.

Factoring Regulation Act 2011

Sec 23:

punishable with imprisonment for a term which may extend to one year, or with fine, or with both. 

11.

Actuaries Act, 2006 

Section 37: 

punishable on first conviction with fine which may extend to one lakh rupees, and on any subsequent conviction with imprisonment which may extend to one year, or with fine which may extend to two lakh rupees, or with both. 

 

Section 38 (2): 

punishable with fine, which may extend on first conviction to fifty thousand rupees and on any subsequent conviction with imprisonment which may extend to one year, or, with fine which may extend to one lakh rupees, or with both. 

 

Section 40(2)

punishable on first conviction with fine which may extend to fifty thousand rupees, and on any subsequent conviction with imprisonment which may extend to one year, or with fine which may extend to one lakh rupees, or with both. 

12.

Banking Regulation Act, 1949 

Section 36 AD (2): 

punishable with imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both. 

 

Section 46: 

punishable with imprisonment for a term which may extend to three years and 2 or with fine, which may extend to one crore rupees or with both. 

13.

General Insurance Business (Nationalisation) Act, 1972

Section 30

punishable with imprisonment for a term which may extend to one year, or with fine which may extend to one thousand rupees, or with both. 

14.

LIC Act, 1956

Section 40

punishable with imprisonment which may extent to one year, or with fine which may extend to one thousand rupees, or with both. 

15.

Banning of Unregulated Deposit Schemes Act, 2019

Section 21 (1)

punishable with imprisonment for a term which shall not be less than one year but which may extend to five years and with fine which shall not be less than two lakh rupees but which may extend to ten lakh rupees 

 

Section 21 (2)

punishable with imprisonment for a term which shall not be less than two years but which may extend to seven years and with fine which shall not be less than three lakh rupees but which may extend to ten lakh rupees. 

 

Section 21 (3)

punishable with imprisonment for a term which shall not be less than three years but which may extend to ten years and with fine which shall not be less than five lakh rupees but which may extend to twice the amount of aggregate funds collected from the subscribers, members or participants in the Unregulated Deposit Scheme 

 

Section 22

punishable with imprisonment for a term which may extend to seven years, or with fine which shall not be less than five lakh rupees but which may extend to twenty-five crore rupees or three times the amount of profits made out of the fraudulent default referred to in said section, whichever is higher, or with both. 

 

Section 23: 

punishable with imprisonment for a term which shall not be less than one year but which may extend to five years and with fine which may extend to ten lakh rupees 

 

Section 24:

punishable with imprisonment for a term which shall not be less than five years but which may extend to ten years and with fine which shall not be less than ten lakh rupees but which may extend to fifty crore rupees. 

16.

Chit Funds Act, 1982 

Section 76 (1)

punishable with imprisonment for a term which may extend to two years or with fine which may extend to five thousand rupees or with both. 

 
 

Section 76 (3): 

punishable with imprisonment for a term which may extend to two years or with fine which may extend to five thousand rupees or with both. 

 

Section 77:

punishable for the second and for every subsequent offence with imprisonment for a term which may extend to two years and shall also be liable to fine 

17.

DICGC Act, 1961

Section 47 (1)

punishable with imprisonment for a term which may extend to three years and shall also be liable to fine. 

18.

Negotiable Instruments Act, 1881

Section 138

punished with imprisonment for a term which may be extended to two years, or with fine which may extend to twice the amount of the cheque, or with both. 

 

Section 143 (1): 

Provided that in the case of any conviction in a summary trial under this section, it shall be lawful for the Magistrate to pass a sentence of imprisonment for a term not exceeding one year and an amount of fine exceeding five thousand rupees: 

Provided further that when at the commencement of, or in the course of, a summary trial under this section, it appears to the Magistrate that the nature of the case is such that a sentence of imprisonment for a term exceeding one year may have to be passed or that it is, for any other reason, undesirable to try the case summarily, the Magistrate shall after hearing the parties, record an order to that effect and thereafter recall any witness who may have been examined and proceed to hear or rehear the case in the manner provided by the said Code.

19.

Prize Chits and Money Circulation Schemes (Banning) Act, 1978

Section 4

Punishable with imprisonment for a term which may extend to three years, or with fine which may extend to five thousand rupees, or with both: 

Provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court, the imprisonment shall not be less than one year and the fine shall not be less than one thousand rupees 

 

Section 5:

shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to three thousand rupees, or with both: 

Provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court, the imprisonment shall not be less than one year and the fine shall not be less than one thousand rupees. 

 

Section 12 (5)

punishable with imprisonment for a term which may extend to two years, or with fine which may extend to three thousand rupees, or with both: 

Provided that in the absence of special and adequate reasons to the contrary to be mentioned in the judgment of the court, the imprisonment shall not be less than one year and the fine shall not be less than one thousand rupees. 

It is quite amusing to see that under what provisions of law, the Government of India by virtue of the notification dated 08th June, 2020 has categorized the offences enumerated above to fall within the category of minor offences where the punishment ranges from 1 year to 10 years and fine is in crores.

How the Government of India is satisfying the norm stating that Criminalizing procedural lapses and minor non-compliances increases burden on businesses and it is essential that one should re-look at provisions which are merely procedural in nature and do not impact national security or public interest at large. By and large it can be seen that the Government of India thus decriminalizing the offences is giving a clear cut go bye and a hand shake policy to those who commit offences thus to continue more with it and putting the government to loss. It is quiet unfair on the part of government to decriminalize the offences and not to penalize those who are habitual offenders.Covid cannot be a reason to decriminalize the offences which are specifically there in a codified statute and the penal provision itself is the soul of the statute without which the statute itself becomes redundant; in absence of any punishment for non-compliance by the offenders.

On one hand, the Government of India is saying by virtue of the notification that the Courts are overburdened and on other hand by bringing the notification and taking a policy decision which would be in the form of amendment, wish the government agencies to have hands tied and be hopeless with nothing in hand in the form of sword of penalizing the offenders and wish them to go for civil action, thus clearly embarking the offenders to be scot-free. The notification is absolutely silent on the front as to what policy decision the government is interested in taking in alternate nor it has specified it’s intentions to that effect. Bringing such notifications is not just unhealthy but as well drastic to the economy but as well giving rise to multiple offences under special statues and thus the notification is bad in law and needs to be brought into implementation. The government cannot act and exercise its powers in a haphazard way.


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