Economic Offences: Jail, Not Bail?

    Economic offences have been given a peculiar position in bail jurisprudence under criminal laws in India. The concept of bail emerges from the conflict between the police power to restrict liberty of a man who is alleged to have committed a crime, and presumption of innocence in favour of the alleged criminal. When considering bail in economic crimes, the gravity of an economic offence is directly proportional to the impact and loss caused in society. Some examples of such crimes are corporate fraud, tax evasion, money laundering, currencies forgery, and cybercrime. Economic offenders involved in such scams are usually in positions of responsibility and executive posts in enormous companies. They are often the mastermind and malefactor in organizing and planning the crime. However, once the crime is committed and the investigation has been initiated, several people are roped into the criminal system. Some of these people might have been unaware that such a crime was taking place under their supervision. Therefore, it is essential that procedural safeguards are in place and a uniform process or criteria is adopted when considering bail of the detained i.e. the culprit and the guilt-free, as may be determined by trial.

    A bail plea is critical for the alleged offender, as his freedom is at stake. If bail is granted he can work towards proving his innocence at trial and access appropriate legal services to build his case. Personal Liberty is a stepping stone to ensure that justice is seen to be done. It is indispensable to the nature of bail. However, in recent judicial decisions we see a persistent deviation from safeguarding the personal liberty of the alleged offender. The Judiciary has taken strict action against offenders under the Prevention of Money Laundering Act, 2002, the Prevention of Corruption Act, 1988 and various other criminal laws. Most of the economic offenders are kept in custody for a long period of time pending investigation and trial. The general rule is jail is the exception and bail is the rule. But this principle has now taken a backseat, considering the rise in economic offences and the magnitude of it that affects millions and it also hampers the liberty of the offender.

    In this article, the author sheds light on certain ambivalent observations by courts on grant of bail in economic offences and the need of a pragmatic approach in granting bail.

    Settled Position of Law

    It has been laid down in a plethora of judgments that economic offences are treated differently than other categories of crime. This is due to the gravity of the offence which is an extremely relevant factor while considering bail. In criminal law, the gravity of the criminal activity and the magnitude of it is directly proportional to the punishment the offender has to face. In 2019, the judgement of P. Chidambaram v. Directorate of Enforcement[1], introduced the concept of the Triple test or the Tripod test. The triple test states that the alleged offender seeking bail should not (a) be likely to abscond or be at flight risk; (b) tamper with the witnesses; or (c) destroy evidence.[2] If these requirements are satisfied then bail should be granted. Justice A.S. Bopanna was of the view that “even if the allegation is one of grave economic offence, it is not a rule that the bail should be denied in every case, since there is no bar created in the relevant enactment passed by the Legislature, not does the bail jurisprudence provide for so”. In spite of this change in position of law, courts have still been hesitant in applying the triple test, while granting or denying bail. One of the main reasons being the reverberations of the offence.

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    Incongruence between the Object of Bail and Gravity of Offence

    The primary objective of bail is to secure the attendance of the person at trial but at the same time granting him his liberty to be free. An accused person who enjoys freedom is in a much better position to look after his case and to properly defend himself than if he were in custody. As a presumably innocent person he is therefore entitled to freedom and every opportunity to look after his own case. Therefore, he must have his freedom to enable him to establish his innocence.[3]. Nonetheless, is it still justified to grant bail in such swindles where crores have been laundered?

    Money laundering is a serious threat to the national economy and national interest[4]. In Sanjay Chandra v. Central Bureau of Investigation, the ‘2G scam’ entailed the fraudulent allocation of 2G bandwidth spectrum to private entities in the telecom sector causing the exchequer an estimated loss of Rs. 30,000 crores. In this case, the Supreme Court observed that it has to take notice of the huge financial loss. The scope of consideration relating to bail includes the term of sentence being seven years, if convicted and in that regard it has been held that in determining the grant or otherwise of bail, the seriousness of the charge and severity of the punishment[5]. The Sanjay Chandra case has distinctively elaborated the relevant aspects to be considered while granting bail. The two vital factors being gravity of offence and severity of punishment prescribed in law.

    The question the author puts to the reader is “Should the magnitude of the offence affect the liberty of the alleged offender at the stage of considering bail ?” In the case of Sanjay Chandra, it was observed that it should be a factor when considering bail. However, in order to have a fair trial, the impact of the offence and the loss caused from the commission of the act cannot be a primary or guiding factor in the grant of bail. It can certainly be a factor to enhance the punishment of the offender once trial has taken place and the offender has been convicted, but it cannot be a facet while granting bail as it can cloud the judgment of the Judge.

    Investigation at the stage of granting bail is pivotal. The majority view taken by judges is that there is always a chance of the alleged offender tampering with the investigation and destroying evidence. However, once investigation is completed and a charge-sheet has been filed, the offender should be enlarged on bail unless there is a serious contention of the offender violating the triple test, as laid down in Chidambaram[6]. Trial may take a prolonged period and most offenders are detained for an indefinite period before trial commences. This itself is an infringement of their personal liberty. Therefore, the gravity of offence and seriousness of charge should not deter courts in enlarging the offender on bail.

    A Bombay High Court judgment in Khemlo Sakharam Sawant v. State beheld a hard-headed approach when granting bail. The Court was of the view that an economic offence cannot be equated with a serious offence like murder. The Court should not be swayed away by the perception of morality but should confine its decision to the requirements of law[7]. Applying this position, it can be interpreted that public morality should not be a factor in these offences. Strict adherence should be made to the test laid down in grant of bail in such offences. As pointed out by Justice Krishna Iyer in the State of Rajasthan v. Balchand, that “the basic rule may perhaps be tersely put as bail, not jail, except where there are circumstances suggestive of fleeing from justice or thwarting the course of justice ”[8].

    Conclusion

    Courts have to consider bail matters in economic offences with great caution. The judge has to ensure that when bail is granted, there is parity between a fair investigation and a fair trial. One can hope that the right to freedom and personal liberty is synchronised with the duty of courts to deliver justice. When it comes to bail in economic offences, it cannot be granted from the eyes of righteousness. If it is perceived from this aspect, then the liberty of the alleged offender can often be compromised. The need of the hour is to assess if the offender satisfies the requirements of law for the grant of bail or not. Hopefully, by adhering to this we may be able to achieve justice expeditiously without hampering personal liberty of the guilt-free.

    REFERENCES

    [1] Criminal Appeal No. 1831 of 2019.

    [2] P. Chidambaram v. Directorate of Enforcement, 2019 SCC Online SC 1549.

    [3] Giri Raj v. State Of Haryana, CRM-M No.19535 of 2018.

    [4] Gautam Kundu v. Manoj Kumar, (2015) 16 SCC 1.

    [5] Sanjay Chandra v. CBI, (2012) 1 SCC 40.

    [6] P. Chidambaram v. Directorate of Enforcement, 2019 SCC Online SC 1549.

    [7] Khemlo Sakharam Sawant v. State, 2001 SCC Online Bombay 395.

    [8] The State of Rajasthan v. Balchand, AIR 1977 SC 2447.


    BY VANSHIKA SHROFF | PRAVIN GANDHI COLLEGE OF LAW

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