1989 (7) TMI 307 - HC - Companies Law

Summary

Issues Involved:
1. Applicability of Article 20(3) of the Constitution to incorporated companies or other bodies corporate.
2. Extension of Article 20(3) protection to directors, officers, or employees of such corporate bodies who are not accused or co-accused.

Detailed Analysis:

Issue 1: Applicability of Article 20(3) to Incorporated Companies or Other Bodies Corporate

Article 20(3) of the Constitution states, "no person accused of any offence shall be compelled to be a witness against himself." The court examined whether this provision could be invoked by an incorporated company or any other body corporate.

The court noted that, according to Article 367 of the Constitution and Section 3(42) of the General Clauses Act, 1897, a company or other body corporate is generally treated as a "person" for constitutional purposes. However, the court asserted that in the context of criminal prosecution, a company or body corporate would not be considered a "person" under Article 20(3). The court reasoned that a juridical person, such as a corporate entity, cannot "be a witness" as it cannot make an oath or affirmation, which is a prerequisite for giving evidence under the Oaths Act, 1969.

The court further emphasized that Article 20(3), which forbids compulsion to make an accused "a witness against himself," is not applicable to corporate bodies as they cannot provide oral evidence or take an oath. The court referred to the Evidence Act, which defines "evidence" to include oral and documentary evidence, and concluded that a corporate body cannot provide oral evidence and does not become a witness merely by producing documents.

The court also referred to the Supreme Court's decision in M.P. Sharma v. Satish Chandra, which initially suggested that producing documents could make one a witness. However, this view was overturned by a larger bench in State of Bombay v. Kathi Kalu Oghad, which clarified that "self-incrimination" must involve conveying information based on personal knowledge, which a corporate entity cannot do.

Additionally, the court considered American jurisprudence, noting that the Fifth Amendment's protection against self-incrimination does not extend to corporate bodies. The court found this reasoning persuasive and applicable to the Indian context.

Issue 2: Extension of Article 20(3) Protection to Directors, Officers, or Employees

The court addressed whether the protection under Article 20(3) extends to directors, officers, or employees of a corporate body who are not accused or co-accused. It concluded that employees or officers of a company cannot be equated with the company itself for the purposes of self-incrimination protection. The court reasoned that if such individuals were not allowed to testify against the company, many corporate crimes would go undetected and unpunished.

The court also highlighted the practical implications of extending Article 20(3) protection to corporate employees. It stated that preventing employees from testifying could hinder the prosecution of corporate crimes, which have become increasingly complex and widespread.

The court did not decide on whether a representative appointed under Section 305 of the Code of Criminal Procedure, who represents the corporation, could be compelled to testify against it.

Conclusion:
The court rejected the revisional application and discharged the rule, allowing the trial to proceed. It held that Article 20(3) does not apply to corporate bodies and does not extend protection to their directors, officers, or employees who are not accused. The judgment underscores the distinction between natural and juridical persons in the context of self-incrimination protections.