Deeming Fiction: The Statutory Intendment of Affixing Corporate Criminal Liability in India

This article discusses the statutory intendment pursued by the Indian judiciary in order to avoid the standstill issue of corporate criminal liability, by proper mechanism of fastening legal responsibility through the creation of a legal fiction. Far from giving corporations a shield to commit fraud, this concept narrows down the scope of escape by rejecting the plea that no one is to be held criminally liable for an act of another. This article studies the issue of how the judiciary has disallowed the notion that a body corporate cannot commit a criminal offence by reasoning out the scope of deeming fiction. This article also discusses the issue of one principle being compromised for another, arraigning the corporation along with the functionaries of the corporation. The authors argue that the principle of deeming fiction can capture the desirable features of other principles such as identification, attribution and lifting of the corporate veil. Further the authors demonstrate as to how this principle renders all other theories meaningless in the light of a plain statutory intendment, when put to use in its complete sense to have full effect. The application and use of various UK, USA, Canada, and Indian case laws has been adopted in order to understand and compare the above mentioned machinery of fastening culpability to the money making corporations, for the offences committed by them. Lastly, the authors feel that the courts, upon proper application of mind, have considered the issues of participation, responsibility and enforceability in each case, without which it would have been a futile exercise. The article concludes on the note that a blanket application of either principle would prove to be detrimental and statutory intendment would fasten the liability of deemed culpability, and proceeds against the corporation or the director or both, accordingly.