Purpose of law to protect or persecute?
`THIS COURT is not only a court of law but the court of justice too,' so pronounced the Bench of the Madras High Court, according to press reports, in the recent case concerning the strike of State government employees. It was also reported that in the same case, the Honourable Chief Justice had, while seeking clarifications, asked "Can the Government view all crimes uniformly? There are offences and there are grave offences.'' Strong words, these, full of meaning and are likely to be quoted ad infinitum in the future.
Two doubts will arise in a layman's mind. One, is law different from justice, or can it be said that a strict observance of law may lead to unjust actions? Two, does the law framed by the Government (read officers of Government) treat all offences, irrespective of the gravity, on an equal footing? Unfortunately, the answers to both questions can on some occasions be positive, thereby making a mockery of the intentions behind framing laws.
Taking the second issue first, one example may illustrate. Supposing a person unauthorisedly enters another's property and damages it, he/she ought to be punished for the trespass. But then, if the trespasser did so involuntarily for instance, he was thrown into the property by a bull charging at him should not the law treat this "offence'' more leniently than the earlier one? No, the law apparently does not, and more significantly, the second example is reportedly cited in the training programmes of income -tax officers, with perhaps a mild suggestion that they ought to treat it as severely as the voluntary trespass. So, next time the reader receives, in his/her opinion, a shabby treatment from his /her ITO, he/she should know that the blame lies with the system and not individuals.
Lest one might tend to consider the discussion as academic, one could take two statutes the Companies Act and the Income-tax Act, which do provide ample scope for a government officer to be unduly harsh on citizens.
The Companies Act is a magnum opus having well over 600 sections. And, in at least 76 places, the Act specifies the penalty of fine for non-compliance (the amount of fines was increased tenfold in 2000). In 38 other places, penalty of fine and/or imprisonment is specified. It is in the latter cases that many innocent persons can face the fury of law and can even be put behind bars for very minor "offences.''
Justice, not mere law
In one case, a high ranking officer of the Government, on retirement, joined a joint sector company as a director. When the going became tough, the representatives of the State development agency that was a co-promoter, got out before they could be called to question. For the company failing to publish its annual financial statements, all the directors, including the retired officer, were sued by the Registrar of Companies (ROC), because the law provided for it. This offence warranted fine and/or imprisonment and could not even be compounded, that is, the imprisonment compromised for a fine. The Judge examining the case dispensed justice and not mere law and let the director off with a fine.
Another case takes the unfairness to the extreme. A public sector investment company was taking deposits from companies and other corporate bodies, on a short term basis. On an average, it was taking over 360 such deposits in a year. These deposits were not considered "public'' deposits, based on sound legal opinion. Hence, the requirement of issuing advertisements in papers, containing financial details of the deposit taking company, did not apply. In one year, deposits were taken from two quasi statutory bodies. The ROC felt that the deposits fell under the category of "public'' deposits and sued the company and its directors for not having issued advertisements; punishment was both fine and imprisonment. The case was filed four years after the deposits were taken and repaid fully with interest as per the original terms. The ROC was least concerned whether the action of the company resulted in any loss or inconvenience to anybody, including the depositors, but was only complying with law, as he interpreted it.
In the end, the company won the case since the particular matter came under the domain of the Reserve Bank of India and not the ROC. A pertinent issue was that if the RBI had taken it up, the maximum imprisonment would have been three years whereas if the ROC had sued, it would have been five years. In the case of the former, the law of limitation would apply and no suit can be filed after three years, whereas ROC is given unlimited time to wake up and file a suit; yes, even after 20 years a suit can be filed.
That government officers are given privileges far in excess vis-a-vis members of the public in such matters is evident from the following two provisions. In respect of violation of Companies Act provisions, the complaint can be lodged in a court of law by a shareholder of the company or the ROC or any person authorised by the Central Government. If a shareholder complains and it is later proved to be on false premises or vexatious or frivolous, he/she would be penalised with a fine and, if the fine is not paid, could even be imprisoned. If, on the contrary, a government officer makes such a complaint he/she is immune from any prosecution.
The other provision where government officers are given the most favoured treatment is in guarantees issued by banks and others in favour of government departments, on behalf of contractors or others who do work for the Government. If the guarantee is in favour of the Government, in the event of the guarantee being invoked, the beneficiary (government department) has 30 years in which to file a suit for claiming the amount. For all other beneficiaries, the period of limitation is just three years. Thus, the law seems to give total freedom for government officers to be like the legendary Rip Van Winkle and doze off for even 30 years. It is unlikely that any such provision is available in other countries.
In matters of persecuting the public, the Income-tax Act has some strange provisions and an overzealous ITO can make life miserable for the tax payer. To give an example, the public sector investment company mentioned above had been paying interest on the deposits and was also deducting tax thereon, at source, as required by law. In a particular year, out of deductions in over 360 cases, it failed to pay the deducted tax, in time, in six cases. When the mistake was found out, it voluntarily paid the amounts to the Government, well before submitting the tax return for that year. The ITO demanded interest for the period of delay and this was paid.
Then he slapped a penalty equal to the amount of tax deducted; this too was paid under protest and with an appeal to higher authorities. On top of this, the ITO filed a criminal complaint in the court of law seeking to put the directors of the company behind bars. And, the Income-tax Act did provide for such an action. If this is not persecution, what else is? When the company tried to appeal to the High Court, the Judges there reportedly commented that if the tax department were to file such suits, nearly half of the tax payers could be jailed!! Of course, there was a provision for compounding that "offence'' and the ITO finally agreed to settle with a further fine.
Relevance of criminal
One fundamental issue crops up in all such matters. Should the law at all provide for criminal punishment for violating the provisions of many of the Acts? Can't these be only monetary fines and if the offence comes under the criminal law, such as forgery, false representation or perjury, the Indian Penal Code can be invoked. By vesting the powers of criminal law in the hands of various government officers, there is scope for frivolous or even vindictive punishment. Further, in these cases, the ROC or the ITO or a similar officer is not required to show that there was mens rea or an intention to cheat or commit fraud on the part of the person(s) arraigned.
The other issue is why should a government officer enjoy a preferred treatment as compared to the members of public in terms of immunity from false complaints, very long period for filing suits etc. Can't there be a level-playing field in such matters? Lastly, as the Honourable Chief Justice of the Madras High Court so aptly put it, should not the law differentiate between minor infractions and major violations of the law?
One may be tempted to view the cases quoted above as very stray instances. But then, it was a famous Judge who remarked that it is better to be accused of allowing a few criminals to go scot free than to hang one innocent person.
Will it be too much to expect that the highly efficient, energetic and knowledgeable Central Minister of Law should address the above issues and take away the powers of persecution vested in the hands of various Government functionaries?
Send this article to Friends by