REVIEW OF LAW COMMISSION’S 47TH REPORT ON TRIAL AND PUNISHMENT

OF SOCIO ECONOMIC OFFENCES

-Deeksha Agrawal
BA0160015
The 47th Law Commission Report laid down a new composite category of socio-economic
crimes. The three basic forms include illegal economic activities, illegal way of performing
commercial and allied transactions and evasion of public taxes or monetary liabilities.

The report explores the criminality of socio-economic offences with specific emphasis on the
concept of mens rea. It is argued in this note that socio-economic offences should be treated as
‘violations’ or ‘quasi-criminal offences’ and not as ‘crimes’. When mens rea has been expressly
or impliedly (including when it is not expressly excluded) excluded in a statute, courts cannot
read such a requirement into the language of the statute. If it is deemed to be a social welfare
legislation which incidentally penalises a particular conduct, court cannot read mens rea (which
is a criminal law requirement) into the provision. If it is deemed to be a criminal statute, courts
still cannot read into the words of a statute a mens rea requirement, as a criminal statute is
required to be constructed strictly.

1. The Problem of Definition and a Possible Solution

Nearly everyone works with someone else in order to earn a living. Men are interested in getting
a maximum return for a minimum expenditure of effort and energy – there is a common
economic drive to “get rich quick.” In the wake of industrialisation, rapid urbanisation and
changes in institutions, norms and values, material advancement has become one of the main or
the main goals of life. There are various dimensions in which the issue of ‘socio-economic
offences’ have been discussed. Ashworth calls criminal liability “the strongest formal
condemnation the society can inflict and it may also result in a sentence which amounts to a
severe deprivation of the ordinary liberties of the offender.” It is the condemnation that requires
a social justification. There are some activities that the criminal law condemns and others which
it controls. The activities which are condemned (murder, for e.g) must be contrasted with those
which are controlled (prostitution, for e.g).
The problem of defining crime has been called the ‘constant core of criminal law’. As criminal
law symbolises the most extreme form of state power on individual liberty, when a conduct or
result of a conduct is ‘criminalised’, it has wide connotations in terms of status, social stigma and
public perception. The classical approach simplifies it by stating that what the state declares to be
a crime is a crime. But this approach is circuitous in nature – it is a crime when state defines it as
one and state defines it as one when it assumes the characteristics crime. Criminology on the
other hand is concerned with the question ‘what ought to be a crime?’

It is argued that crime is primarily a construct of particular social and legal systems, reflecting
temporarily and geographically parochial interests and arrangements. Thus, the assumption that
criminal law deals with a unitary, discrete category may not be desirable. In this context, let us
analyse what has come to be called ‘socio-economic offences’ and how we have dealt with them
– can we define it? Do we need to define it?

A definition ideally (i) includes what is generally accepted as properly within this sphere, (ii)
exclude what is universally regarded as not being it and (iii) include or exclude borderline cases
in the light of a reasoned comparison of the phenomena in question.

The term ‘socio-economic offence’ should be contrasted and if and when necessary,
differentiated from terms (which are its manifestations) like ‘white collar crimes’, ‘victimless
crimes’, ‘public welfare offences’, ‘organized crime’, ‘corporate crime’, ‘economic crime’,
‘regulatory offences’, ‘statutory offences’, ‘quasi-criminal offences’, ‘anti-social offences’, ‘civil
offences’ etc.

It is submitted that, by virtue of these offences being defined on the basis of motive and a
criminal policy of social welfare, they should be treated as ‘violations’ and not as ‘crimes’. This
does not mean that they are harmless or trivial in nature. On the other hand, they are more
sinister than many ‘true’ crimes. Since these offences easily permeate the social structure, they
are virtually legitimised ultimately (like corruption). Considering the vulnerability of the society
to such offences, they should be treated differently.

Two issues merit consideration: (i) In most cases, such offences are strict liability offences i.e
they exclude or modify the requirement of, mens rea. To what extent is this practice justified? To
what extent is the judicial practice of reading mens rea into such statutes justified? and (ii) what
would be the most appropriate response to such offences? Issue (i) will be dealt with here leading
to a conclusion based on issue (ii). This is not to say that there are no other issues. On the other
hand there are plenty (vicarious liability, situational liability in statutory offences etc.). Nor does
it mean these issues are the most important. However, these issues signify what has been the
prime concern of debates and discussions in relation to socio-economic offences.

At the outset, it is submitted that when mens rea has been expressly or impliedly (including when
it is not expressly excluded) in a statute, courts cannot read such a requirement into the language
of the statute. If it is deemed to be a social welfare legislation which incidentally penalises, court
cannot read mens rea (which is a criminal law requirement) into the provision. If it is deemed to
be a criminal statute, courts still cannot read into the words of a statute a mens rea requirement,
as a criminal statute is required to be constructed ideally. A way out if this anomaly might be
insertion of a Social and Economic Offences Code, as suggested by Malimath committee and
looking for alternative methods of punishment that can effectively increase the stigma against the
offenders.

Mens Rea in Socio-Economic Offences

The Indian approach to the problem suffers from the same kind of inconsistencies as the English
one because our criminal law has its roots (and form?) and is constantly supplemented by
principles of common law. There are offences in the Indian Penal Code, for which no element of
mens rea is required (waging war against the government is an example). But, even in such cases
courts have applied the doctrine of mens rea.

First, let us view the development of the issue in common law. Most of the enactments focus
their attention on the acts themselves, irrespective of the mental intention. This is one reason
why some others refuse to consider it a ‘crime’, as it does not punish a guilty mind. Many
attempts have been made to separate this class of offences from those of obvious criminality.
Such attempts resulted in the classification of these offences in the category of ‘administrative
penal law’ and ‘public welfare offences’.
In a developing country like India, constraints of economic resources have necessitated the
imposition of certain social controls to promote planned development (licensing, regulation,
distribution of scarce commodities etc.) To some extent, it is imperative to impose strict liability
for laying down standards of behaviour. This is because the aim is public welfare. But, is it
justified in all cases? It should be noted that what we are discussing is the criminalization of
productive social and economic conduct.

Mens rea requirement is a common law legacy. However, there are instances in common law
where the doctrine is dispensed with (like public nuisance contempt of court and libel). This was
justified because (i) it was difficult to prove mens rea in some cases, (ii) as they were penalised
under social welfare legislations, a purposive construction was required to further the objectives
of the act. (iii) punishment in these cases is usually light and (iv) they are offences which are in
the nature of mala prohibita and not mala in se.