Showing posts with label Punishes. Show all posts
Showing posts with label Punishes. Show all posts

Monday, 4 November 2019

IPC 406 – Provision and Punishment for Criminal Breach of Trust

Section 406 IPC is dealing with the punishment clause of Criminal Breach of trust, defined under section 405 of the Indian Penal Code, 1860. So basically by its own heading of section 405, it is to be clear that, when any “person” putting their trust on “someone” for transferring the possession of some property to “someone” and that “someone” thereafter breaches the trust of the “person” by retaining the property by some forge way or by any other act, then such type of activities done by any person has come under the ambit of criminal act under the provision of Indian Penal Code, 1860. The offenses of criminal breach of trust, as defined under section 405, is very similar to the offense of embezzlement under the English law.

Furthermore, to constitute the offense of criminal breach of trust under section 405, it must be established that the accused was entrusted with some property or power over the property of other person and that the person with mala-fide intention misappropriated it or converted it to their use. In short, the section reads as ‘dishonest misappropriation’ or ‘convert the property to own use’ some other person’s property. Criminal breach of trust and criminal misappropriation (under Section 403) is distinct from each other in the context of the fact that in the criminal breach of trust, the accused person is entrusted with property or control over the property.

Provisions under IPC: –

That the provision related to Criminal Breach of Trust is mentioned under Chapter VI (of offenses against the body) from section 405 to 409. Whereas section 405 defines Criminal Breach of Trust, section 406 provides punishment of offense defining u/s 405 and section 407-409 sets when some specific people and their punishment commit the wrong of breach of trust.
Although Section 405 has a wide ambit, however ‘entrustment’ of the property is an essential ingredient for an offense to be punished under S.406 of IPC.
Some of the other essential elements of the offense of Criminal Breach of Trust under Sec. 405 are the following: 
  1. giving a charge of their property to any person in whom confidence is placed or providing any power over property;
  2. Also, the person is entrusted:-
      •  With mala-fide intention misappropriates the property or converts the property to his use or,
      • With the mala-fide intention uses or disposes of that property or willfully suffers any person of any contracts which is legal made touching the discharge of such kind of trust.
Section 405 of the IPC extends to the entrustment of all type – whether, to clerks, servants, business persons or some other persons, just one thing is taken into consideration that, they are holding a position of trust. Entrustment need not be express always, and it may be implied.

Punishment (Under Section 406 IPC) 

Whoever commits offenses defined under section 405 of IPC shall be punished with imprisonment which may extend to three years, or with fine, or with both.

Case laws: –

In the State of Gujarat vs. Jaswantlal Nathalal (AIR 1968 SC 700.) Supreme Court held pronounce that the expression ‘entrustment’ carries with it the implication that the person handing over any property or on whose behalf that property is handed over to another person, they continue to be its owner.
Further, the person who is handing over the property must have confidence in the person taking the property. To create a relationship based on trust between them. Only the transaction of sale cannot amount to an entrustment. If the accused had infringed or violated the conditions of purchase, the only legal help is to prosecute him under the law.
Stridhan and Criminal Breach of Trust: –
Basically, In Stridhan it includes all kind of gifts given by the husband to his wife before their wedding; Also, gifts given by the husband or as we can say (groom) and his family, or other guests or persons, and the wife’s (bride) parents to the wife at the time of marriage, and any type of gifts given to her after the marriage by an person including her parents, her husband and his husbands family, or anybody else. In Stridhan it may include jewelry, apartments, vehicles or any other item. Stridhan is considered as the exclusive property of the wife according to the Hindu Marriage Act, and the definition is accepted by judicial authorities for other purposes too.
Though Misappropriation of Stridhan by the husband or husband’s side is a punishable crime by the provision of law defined in IPC u/s 406 (“punishment for criminal breach of trust“), the definition is given u/s 405, while sections 407- section 409 defines the penal provision for breach of trust in some specific relationships. The spectrum of relationships covered by these sections which include the relationship between sender and carrier of property or goods, and between an owner of the property and their employee, and between the owner of property and banker, and between public and public officials, and between an owner of the property their attornies or agents. Section 406 provides three years simple or rigorous imprisonment, both part, i.e., 407 and section 408 provides seven years simple or rigorous imprisonment, and section 409 prescribes severe punishment from ten years – life imprisonment. By some section 406 can be more correctly described as “punishment for criminal breach of trust simpliciter” in the light of these undoubtedly severe sections. There are many contradictory views regarding that the components of the Stridhan which has been gifted by the husband or the husband’s side. Some experts say that taking back such kind gifts creates only civil liability, while some of in the opinion that this may attract IPC section 406 (Criminal Breach of Trust), which is a criminal provision.
If we talk about some other aspect of the term Stridhan, any gifts given by the wife’s side to the husband or husband’s family are to be returned if and when the marriage collapses. Because If these kinds of gifts are deemed by the court to have been given “in consideration of marriage” (or as we can say as a price for marriage), then this is considered as dowry, and the husband’s side may be liable under the provision of Dowry Act for the imprisonment and /or a fine or both for demanding these items or accepting these items.
The Apex Court of the country i.e., Supreme court quoted that the sections under 498a and 406 under the Indian penal code are widely misused, and for no reason, the husband and his family members are prosecuted and send behind bars thereby, tarnishing the reputation of the family, these sections are termed as a “legal terrorism”. Hence the apex court in a very recent judgment of “Arnesh Kumar Vs. The state of Bihar” has given some compulsory or obligatory proposal of guidelines which are as follows: –
  1. All the State Governments to instruct its police officers not to directly arrest when a case under Section 498-A of the IPC is lodged but it’s necessary to satisfy themselves about the requirements for arrest under the framework laid down above flowing from Section 41, Cr.PC;
  2. The police officer or in charge may provide a check-list under section 41(1)(b)(ii) of the Criminal Procedure Code which shall forward  and furnish the reasons and materials which necessitated the arrest while producing the accused person before the Magistrate for further detention;
  3. The magistrate may pursue the report furnished by police, and only after recording its satisfaction, the magistrate authorizes detention.
  4. Notice send (for appearing in court) in terms of Section 41A of Cr.P.C.must be reach before accused within 14 days from the date of filing the case.
  5. Giving detention without recording any reason by Judicial Magistrate shall be liable for a departmental inquiry by the appropriate HC.
  6. Once FIR under 498a/406 is lodged the apprehension of arrests may create even with the guidelines and safeguards as to be mandatorily implemented by the police officials. The police officer can follow the guidelines and can arrest the person.

Conclusion

Lastly, I will conclude this article with If we have to make a person liable under the discussed provision, it is not only sufficient to establish that the property has not been mismanaged, also, It has to be established that the accused has put the property to his use with the mala-fide detention or to some unauthorized use. And Negligence does not come under the ambit of ‘dishonestly keeping the property in possession,’ it’s an exception.
The wrong of breach of trust under Section 406 is cognizable, and a warrant should, ordinarily, an issue in the first aspect. The wrong is not bailable. It is only compoundable with Court permission when the value of the property does not exceed Rs. 250 and not compoundable otherwise, and is triable by a Magistrate of the first or second class.

Thursday, 24 October 2019

You Will Never Thought That Knowing 5 Top White Collar Crime Cases In India You Never Know Could Be So Beneficial!


What is White Collar Crime?

White–collar crime or a corporate crime refers to financially motivated, nonviolent crime committed by government and businesses professionals. Below are some of the top 5 white collar crime cases in India.

1. Harshad Mehta Securities Fraud (1988-1995)  

Protagonist – Harshad Mehta 
Harshad Mehta was a stockbroker, and he established his security firm in 1990, “ Grow More Research & Asset Management Limited”. He was a reputed name in the stock market, and is considered the ‘Sultan of Dalal Street’, investors blindly followed Mehta’s footsteps.[1] He took a loan of huge amount from the bank and purchased the scrips at high prices, thereby creating a false market. He misused his status and manipulated the stock prices of certain scrips for his gain.[2] This resulted in unnatural pumping of money in the stock markets causing an abnormal rise in the price of these shares. This act of Harshad Mehta though being immoral was not illegal. The problem arose when Mehta obtained capital to invest in the stock market by misappropriating bank’s money. This misappropriation of money falls in the purview of money laundering. He earned approximately ₹ 5000 crores.[3] The then renowned journalist Sucheta Dalal exposed this scam. This unabated selling caused the market to loose ₹ 0.1 million in a day. This was the biggest ever crash which the Indian stock market had ever experienced. To curtail such transaction various changes were brought in SEBI rules and regulations.

2. Satyam Scandal: biggest ever corporate accounting fraud

Protagonist – B. Ramalingam Raju
This scam came into light on 7th January, 20009 by way of confession letter written by B. Ramalingam Raju (Founder and chairman of Satyam Computers Services Limited) published in Times of India. The letter confessed about manipulating his books of account by overstating the assets and understating liabilities.[4]
The books of accounts are the reflection of the company’s financial standing. They act as an important tool on which investors can rely on before investing their money. Accounts books were manipulated to cheat investors and shareholders.
The whole scam cost approximately ₹14,000 crore and is considered to be an important factor which contributed to the recession of 2009.[5]
In this scandal, SEBI hit back strongly, holding Ramalinga Raju and nine major associates and guilty of insider trading, indulging in fraudulent and unfair trade practices. SEBI directed accused to pay approximately ₹3000 crore within 45 days and also debarred them from accessing the security markets in any way for 14 years.[6] SEBI managed to lash back strongly to ensure such a scam never happened again.

3. Ketan Parekh Security Scam

Protagonist – Ketan Parekh  
Parekh was involved in circular trading and stock manipulation through 1999-2001. He borrowed from banks like Global trust Bank and Madhavpura Mercantile Co-operative bank and manipulated a host of stocks known as K-10 stocks.[7] The scandal amount was approximately ₹ 1,250 Crore. He has spent only one year in jail, but he has been debarred from trading in the Indian Stock market till 2017.
Although his name continues to haunt the street as he has been accused of playing from backstage. An Intelligence Bureau Report alleged Parekh and his associates to be engaged in circular and insider trading through front entities.

4. Saradha chit fund case

Protagonist- Sudipta Sen  
Saradha Group financial Scandal was a major financial scam and alleged political scandal caused by the collapse of Ponzi scheme run by Saradha Group, a consortium of 200 private companies that were believed to be running collective investment schemes popularly and wrongly referred to as Chit Fund.[8] This group collected around ₹200 to ₹300 billion from over 1.7 million depositors, promising a multiplied hefty sum in return in the form of cash or real estate and other assets.[9]
At least 10 Saradha group entities were alleged for committing fraud through public money-pooling activities. Amidst continuing public protest against the group’s alleged fraudulent activities, SEBI barred Saradha Realty India and its managing director Sudipta Sen from the securities market till it winds up all the Collective Investment Schemes (CIS) and makes the refund, as the same amounts to CIS Violation.[10]
The central government through income tax department and Enforcement Directorate launched a multi-agency probe to investigate the Saradha Scam and similar Ponzi scheme. Later, in May 2014 Supreme Court of India, alleging possible international money laundering, severe regulatory failures an alleged political nexus, referred this case to CBI, India’s federal investigation agency.[11] Many prominent personalities were arrested for their involvement in the scam including two Members of Parliament- Kunal Ghosh, Srinjoy Bose, former West Bengal director general of police- Rajat Majumdar, a top football club official Debabrata Sarkar, Sports and Transport minister in the Trinamool Congress government Madan Mitra.
This scam is often compared to the Sanchayita investment scam, a multi-crore rupees scam that occurred in West Bengal in the 1970s, complaints related to the same have to lead to the formation of Prize Chits and Money Circulation Schemes (Banning) Act, 1968.[12]

5. Punjab National Bank Fraud

Protagonist- Nirav Modi  
Nirav Modi is a diamantaire, elite jewelry designer and India’s 85th richest person.
Bank said that Modi and the companies linked to him colluded with its officials to get guarantees or Letter of Undertaking to help fund buyer’s credit from other overseas banks.[13]
PNB’s preliminary investigation showed that two officials of the bank had fraudulently issued Lou’s to the said firms without following the due procedure. These Los were then transmitted across the SWIFT messaging system, based on which the credit was offered to the said firms.[14]
PNB alleged that the funds ostensibly so raised for the purchase and sale of diamonds were not used for the purpose.
PNB issued to the stock exchange, about the detection of the fraudulent and unauthorized transaction. PNB has incurred $1.8 billion fraud, one of the largest to be detected in Indian Banking Sector.[15]

[1] “THE GROWTH OF SEBI – FROM HARSHAD MEHTA TO SUBRATA ROY” (PDF) <https://lawsdocbox.com/Legal_Issues/73899378-The-growth-of-sebi-from-harshad-mehta-to-subrata-roy.html> accessed May 13, 2019.
[2] Ibid.
[3] Ibid.
[4] Datta D and Datta D, “Ramalinga Raju And The Incredible Story Of India’s Greatest White Collar Crime” (HuffPost India July 15, 2016) <https://www.huffingtonpost.in/devangshu-datta/ramalinga-raju-and-the-in_b_7032688.html> accessed May 13, 2019.
[5] Ibid.
[6] Ibid.
[7] Nimmi (KETAN PAREKH SCAM) <https://www.indianmirror.com/indian-industries/indian-scams/ketanparekhscam.html> accessed May 13, 2019.
[8] “Here’s Why Saradha Was Not a Chit Fund but a Ponzi Scheme” (first post-December 20, 2014) <https://www.firstpost.com/business/heres-why-saradha-was-not-a-chit-fund-but-a-ponzi-scheme-739597.html> accessed May 13, 2019.
[9] Ibid
[10] “Saradha Chit Fund Scam: Mercedes of Sudipta Sen’s Son Seized” (The Economic TimesMay 7, 2013) <https://economictimes.indiatimes.com/news/politics-and-nation/saradha-chit-fund-scam-mercedes-of-sudipta-sens-son-seized/articleshow/19937529.cms?from=mdr> accessed May 13, 2019.
[11] Reporters BS, “SC Jolt for Mamata: CBI to Probe Saradha Scam” (Business StandardMay 9, 2014) <https://www.business-standard.com/article/current-affairs/sc-jolt-for-mamata-cbi-to-probe-saradha-scam-114050900345_1.html> accessed May 13, 2019.
[12] Mukherji UP, Bandyopadhyay K, and TNN, “Sanchayita Haunts Saradha Victims | Kolkata News-Times of India” (The Times of IndiaMay 13, 2019) <https://timesofindia.indiatimes.com/city/kolkata/Sanchayita-haunts-Saradha-victims/articleshow/19656723.cms> accessed May 13, 2019.
[13] “Nirav Modi Case: How PNB Has Defrauded of Rs 11,400 Crore” (Business TodayMarch 15, 2018) <https://www.businesstoday.in/sectors/banks/nirav-modi-case-pnb-fraud-11400-crore-scam-ed-cbi-raid/story/270708.html> accessed May 11, 2019.
[14] Desk BQ, “The Nirav Modi-PNB Fraud Case: Everything We Know So Far” (BloombergQuintFebruary 17, 2018) <https://www.bloombergquint.com/law-and-policy/the-nirav-modi-pnb-fraud-case-everything-we-know-so-far> accessed May 11, 2019.
[15] Nair V, “The Nirav Modi Case: How The $1.8 Billion Fraud Detected At PNB Unfolded” (BloombergQuintFebruary 19, 2018) <https://www.bloombergquint.com/pnb-fraud/the-nirav-modi-case-how-the-18-billion-fraud-detected-at-pnb-unfolded> accessed May 11, 2019.
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Monday, 21 October 2019

Simple Guidance For You In Section 323 Of The Indian Penal Code, 1860

INTRODUCTION TO IPC 323


The Indian Penal Code covers the offense of hurt under Chapter XVI, i.e., “Offences Affecting Life.” Section 323 punishes voluntary causing of hurt under the same.
The provision laid under Section 319 reads as: “Whoever causes bodily pain, disease or infirmity to any person is said to cause hurt.”
The important points for establishing an offense of under Section 319 are:
  • Firstly, bodily pain caused should be physical. In other words, such pain should not be emotional or mental.
  • Secondly, infirmity includes temporary mental impairment, hysteria, or terror.
  • Thirdly, communicating diseases is also a cause of ‘hurt.’
The courts have taken a mixed approach to the third point. For example, in the case of R v. Clarence[1], there was a transfer of venereal disease from the husband to wife. The husband resisted from informing his wife in spite of knowing about his condition. Because if she had come to see, she would not have agreed for sexual intercourse. Contrarily, the court held that the husband was not guilty of causing ‘hurt.’
It is differentiated from the offense of ‘Grievous-Hurt[2]’. It is of a graver intensity as compared to ‘hurt’ and thus, lesser punishment is applicable in case of hurt.

VOLUNTARILY CAUSING HURT

A small case under Section 319 is not punishable. Thus, IPC demarcates a separate offense for hurting voluntarily or intentionally. Section 321 states: “Whoever does any act to thereby cause hurt to any person, or with the knowledge that he is likely thereby to cause hurt to any person, and does thereby cause hurt to any person, is said, “voluntarily to cause hurt.”
In Hanif Usmanbhai Kalva v. State of Gujarat[3], the court has discussed the essential ingredients which constitute the offense under section 323 IPC. These areas under:
  1. “The accused caused hurt to another person;
  2. He caused such hurt voluntarily;
  3. S. 334 does not protect his act.”

Exception

Furthermore, these provisions under Section 321 is subject to Section 334 of the Indian Penal Code. Anyone who acts unintentionally or without any knowledge and causes hurt to a person who provoked him would have a reduced punishment as a result of lack of intention.
However, it is necessary here that the provocation must be grave and sudden.

Punishment

A person causing hurt voluntarily is punishable with an imprisonment of either description for a term which may extend to one year, or with fine which may extend to one thousand rupees, or with both under Section 323 IPC.
However, this punishment is subject to Section 334 which provides for imprisonment of either description for a term which may extend to one month, or with fine which may extend to five hundred rupees, or with both in case of doing the act under grave and sudden provocation.

Other Forms Of Voluntarily Causing Hurt

  1. Voluntarily Causing of Hurt by Dangerous Weapons or Means

Section 324 specifically defines ‘voluntarily causing of hurt by dangerous weapons or means’ as an offense. The special circumstances of voluntarily causing hurt laid down under Section 324 are by means of:
  1. an instrument for shooting, stabbing or cutting, or
  2. an instrument which, used as a weapon of offense, is likely to cause death, or
  3. fire or any heated substance, or by means of any poison or any corrosive substance, or
  4. explosive substance, or
  5. the substance which is harmful to the human body to inhale, to swallow, to receive into the blood, or
  6. any animal.
Likewise, imprisonment of either description for a term which may extend to three years, or with fine, or with both, is enforceable in case of voluntary hurt by dangerous means.[4] And it is also subject of Section 334.
  1. Voluntary Hurt to Extort Property, Or To Constrain To An Illegal Act –

Voluntarily hurting a person to extort any property or valuable security from him or any person interested in him or constraining to do anything illegal is separately punishable with an imprisonment of either description for a term which may extend to ten years, and also relevant fine.[5]
  1. Causing Hurt by Means of Poison to Commit an Offence – 

Section 328 of the IPC says that, whoever administers to or causes to be taken by any person any poison or any stupefying, intoxicating or unwholesome drug, or other thing with intent to cause hurt to such person, or with intent to commit or to facilitate the commission of an offence or knowing it to be likely that he will thereby cause hurt is an offender.
Furthermore, such an offense would be punishable with imprisonment of either description for a term which may extend to ten years, and shall also be liable to fine.[6]
  1. Voluntary Hurt to Extort Confession – 

Voluntarily hurting a person so as to extort any confession or information from either the sufferer or anyone interested, which may lead to the detection of an offence or misconduct and vice versa, is punishable with imprisonment of either description for a term which may extend to seven years, and also makes a person liable to fine.[7]
Illustration: Torturing a person in order to induce him to point out where certain stolen property is deposited makes a person guilty of an offense under Section 332.
  1. Voluntary Hurt by Endangering Life in Public – 

Whoever hurts any person by doing any act so rashly or negligently as to endanger human life or the personal safety of others, shall be punished with imprisonment of either description for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both.[8]

CONCLUSION

Thus, intentional or voluntarily hurting anyone is a punishable offense. Section 323 of the IPC punishes it accordingly. In addition to this, several separate offenses are also formed in furtherance of a voluntary act.
[1] (1889) 22 QB 23.
[2] Section 322, Indian Penal Code 1860.
[3] Criminal Misc. Application No. 3120 of 2014.
[4] Supra note 2, Section 324.
[5] Ibid, S. 327.
[6] Ibid, S. 328.
[7] Ibid, S. 332.
[8] Ibid, S. 337.