Barathkumar K M | Sastra Deemed to be University Thanjavur | 18th June 2020
For a criminal offence, malice is an essential ingredient. Being an artificial person, the company has no soul and body and so the company has no malice to commit a criminal offence. It is a billion-dollar question of whether a company is liable for a criminal offence. If the company was held liable for a criminal offence, whether the company was sentenced to Jail? The Doctrine of Attribution gave a clear solution to these issues. The company is incapable of any mind or soul. It was considered that a company could not be liable for a criminal offence since malice or mens rea is an essential ingredient for that offence. To clear these issues the court has developed a Doctrine named ‘Doctrine of Attribution’. According to this Doctrine, the persons who are the ‘directing mind and will’ of the company were held liable along with the company. Although the Doctrine was developed in the United Kingdom, it was also used in India.
Origin of the Doctrine of Attribution:
The vicarious liability principle was applied to hold companies liable for the actions of its agents but there are many loopholes in this principle. To plug these loopholes the court in the United Kingdom crested the new principle ‘Doctrine of Attribution’, In ‘Lennard’s Carrying Co. Ltd. Vs. Asiatic Petroleum Co. Ltd.[1]’, the house of lords applied the doctrine of attribution to identify Mr. Lennard, the owner of the ship was the ‘directing mind and will’ of the company. In ‘H.L.Bolton Co. Ltd. Vs. T.J.Graham and sons[2]’, the court considered the company as a human body and the brain of the body was the directors of the company and confirmed the application of the doctrine of attribution to criminal cases.
The Doctrine of Attribution in India:
In ‘State of Maharashtra vs. Syndicate Transport Co. (P) Ltd[3].’ the Bombay High Court held that the criminal liability of the corporate body depends on the nature of the offence and the position of the officer or agent of the corporate body. However in ‘Sunil Chandra Banerjee vs. Krishna Chandra Nath[4]’ the Calcutta High Court held that a company cannot be said to possess mens rea to cheat. In ‘Kusum Products vs. S.K.Sinha[5]’ the Calcutta High court held that a company is a juristic person could not be punished.
In ‘M.V.Javali vs. Mahajan Borewell[6]’ the Supreme Court held that for the company the fine will be the only punishment instead of imprisonment. In ‘Asst.Commissioner vs. Velliappa textiles[7]’ the company is an artificial person, it has no soul and body, it cannot be physically punished. The court is not given the discretion to impose fines instead of imprisonment.
In ‘Iridium Indian Telecom Ltd. vs. Motorola Inc.[8]’ for the first time, the Supreme Court applies the Doctrine of Attribution to determine the liability of Motorola Inc. Motorola sold a technology product to Iridium which was duplicate. Iridium sued a case against Motorola for cheating. Sec. 415 of IPC describes cheating but cheating requires an intention to deceive. Motorola argued that a corporate body is an artificial person and hence has no body and soul, therefore cannot be held liable for the criminal offence. The main motive of the Doctrine of Attribution is to determine the ‘mind and will’ of the company. There are always some employees who will be acting on behalf of the corporation. Thus the company is held liable according to the mental states of the employees who are working for it.
In ‘Sunil Bharti Mittal vs. Central Bureau of Investigation[9]’ the question arises whether the officials of the company can be held responsible for acts of the company? The Supreme Court held that the person who occupies the position of a Chairman or Managing Director is not only held liable on the ground of Chairman or Managing Director. A person who fulfils the ‘legal requirement’ of being a person is responsible to the company or the person in charge of at that time of the criminal offence is held liable along with the company. Unless the person proves that the offence was committed without his/her knowledge. The Essential Food Commodities Act, the Prevention of Food Adulteration Act, the Negotiable Instrument Act, the Environment (Protection) Act, provides the punishment for the company, not only with fine but also with imprisonment for the criminal offence. The Doctrine of Attribution holds the company criminally liable for the acts committed through its agents and employees. The Doctrine of Attribution has brought a revolution in the corporate world.
[1] Lennard’s Carrying Co. Ltd. Vs. Asiatic Petroleum Co. Ltd., [1915] AC 705
[2] H.L.Bolton Co. Ltd. Vs. T.J.Graham and sons, CA 1957
[3] State of Maharashtra vs. Syndicate Transport Co. (P) Ltd, AIR 1964 Bom 195
[4] Sunil Chandra Bannerjee vs. Krishna Chandra Nath, AIR 1949 Cal 689
[5] Kusum Products vs. S.K.Sinha, 1980 126 ITR 804 Cal
[6] M.V.Javali vs. Mahajan Borewell, 1997 143 CTR SC 320
[7] Asst.Commissioner vs. Velliappa textiles, 2003 11 SCC 405
[8] Iridium Indian Telecom Ltd. vs. Motorola Inc., criminal appeal no.688 of 2005
[9] Sunil Bharti Mittal vs. Central Bureau of Investigation, AIR 2015 SC 923
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