Organized Crime: Economic Offences and Cyber Crimes -Understanding Section 111 of Bhartiya Nyaya Sanhita

Siddharth Kohli

Introduction

The Indian legal landscape witnessed a transformative shift with the enactment of the Bharatiya Nyaya Sanhita (BNS), which replaced the outdated Indian Penal Code (IPC). The Bharatiya Nyaya Sanhita (BNS), replacing the Indian Penal Code (IPC), represents a significant legal reform in India. This research paper analyzes the BNS’s provisions (Section 111) related to economic offences and cybercrime, and their impact on financial security and stability. Over the last decade, technology has progressed at a rapid pace and there has been a wider adoption of technology. The technology has also been simplified and unlike before, anyone with internet facilities can understand everything about anything. While this change has contributed positively, criminals also have used this change to benefit themselves.

Organized crime in the BNS

Organized crime is introduced in the BNS under section 111 while there was no such provision under the Indian Penal Code (IPC). To address the need for uniformity across the country, ‘organized crime’ is now explicitly recognized as an offence nationwide. While the BNS is not the only legislation that targets economic offences, its provisions related to organized crime still aim to address criminal activities that will impact the economic and financial stability of the country. Section 111 of the BNS draws inspiration from specialized state legislations like the Maharashtra Control of Organized Crime Act, 1999 (MCOCA) and Gujrat Control of Organized Crime Act, 2015 (GCOC).[1] This attempt helps the states that have not enacted special legislation to combat organized crime to strengthen their action against organized crime and especially economic offences, but this will create a duplication of laws for the states that already have a specialised law.

The specialised laws provide a deviation from the regular process of law for the trial of the person(s) accused of particular offences. This enables speedy trial which helps the state and the person(s) accused. However, the Bhartiya Nagrik Suraksha Sanhita (BNSS) does not provide for a special criminal procedure for offences related to organized crime and these offences are going to be tried by the Court of Session[2]. This leads to varying investigations, and a multiplicity of proceedings for the same offence and defeats the purpose of a speedy trial. To effectively combat various economic offences it is necessary that a coherent special procedure is adopted.

Understanding Organized Crime and Economic Offences

It is important to be conscious of what can constitute an organized crime. Organised crime is ‘Any continuing unlawful activity, by any person or a group of persons acting in concert, singly or jointly, either as a member of an organised crime syndicate or on behalf of such syndicate, by any unlawful means to obtain direct or indirect material benefit including a financial benefit, shall constitute organised crime.’[3]

Economic offences mean and include, ‘criminal breach of trust, forgery, counterfeiting of currency-notes, bank-notes and Government stamps, hawala transaction, mass-marketing fraud or running any scheme to defraud several persons or doing any act in any manner with a view to defraud any bank or financial institution’[4]

The current definition does not provide any clarification on what would constitute “Material Benefit” or ‘Benefits’, making the definition very broad and vague that could include multiple benefits with the financial benefits as mentioned.[5] There was an attempt made to define benefits in the Bill, however, the same was not reflected in the final act. Further, the definition of ‘economic offences’ is a broad definition for example, it can also be interpreted to ensure an effective battle against counterfeiting goods and services and not only the counterfeiting of government stamps, currency notes and bank notes. Counterfeiting is one of the serious challenges in ensuring financial security and stability. The money or gains realised from counterfeiting can be used to finance terrorist activities and other crimes. It is noteworthy that the definition takes into account mass-marketing frauds and other cyber-enabled economic offences which affect many people. The recognition of the evolving nature of criminal activities that have adapted to the evolution of new technologies that criminals can use to commit crimes lays down a futuristic outlook while dealing with economic offences and battling against them. Let's look at the penalties for committing organized crimes and how the BNS has tried to adapt with the advancing times.

Penalties and Deterrence

Organized crime is an interesting concept that is dealt with uniquely in different provisions. For example, the Prevention of Money Laundering Act, 2002 (PMLA) provides that a person found guilty of money laundering will be punished with imprisonment of 3 years which may also extend to 7 years. However, the punishment of organized crime (Section 111(2)) related to economic offences under the BNS provides that a person found guilty will serve imprisonment for at least 5 years which can also extend to life imprisonment. Additionally, they will also be liable to pay a fine of at least 5 lakh Rupees. However, when it comes to the punishment part, the act does not provide a distinction between the commission of the offence and attempt to commission of an offence. In MCOCA there is a separate threshold for punishment for commission and attempt.[6] This high threshold for attempting to commit a crime will act as a tool for deterrence for criminals.

The proviso to Section 111(5) of the Act which deals with intentional harbouring and concealment, states that if a spouse of the offender is harbouring or concealing then the penalties in the sub-clause would not be applicable to the spouse. However, there is no clarity on why such an exemption was accorded. Further, in Section 111(6) the act makes it immaterial if there is an absence of ‘knowledge’ while possessing any property derived or obtained from the commission of an organised crime or proceeds of any organised crime or which has been acquired through the organised crime. This may lead to the punishment of people without them being privy to the crime.?

Furthermore, it is also worthwhile to note that BNS (Sections 47 and 48) provides for extraterritorial jurisdiction thereby adding to the strength of existing laws against economic offences. Lastly, the BNSS (Section 61) allows trial in absentia, provided that a procedure to give fair opportunity to the proclaimed offender is complied with as mentioned under the sanhita. As mentioned previously, this provision too will ensure speedy trial and help in the effective combating of economic offences.

Conclusion

The Bhartiya Nyay Sanhita (BNS) tries to make significant legal reforms, particularly in addressing economic offences and cyber crimes. Section 111 focuses on organized crime and is inspired by state legislation to enhance financial stability and security. However, the BNS is not lacking challenges as there is still a lack of special criminal procedures to deal with organized crime in the technology-driven world. The lack of definitions for ‘material benefit’ and ‘benefits’ makes the efforts of introducing stringent penalties and provisions for extraterritorial jurisdictions futile, if it cannot achieve the aim to provide justice. Despite these issues, the BNS comes across as a step forward in the right direction to modernize India’s legal framework and effectively combat evolving criminal activities.

[1]Aditya Kaul, Bhartiya Nyaya Sanhita, 2023: An Analysis Of Legal Reforms, Coherence Challenges, And The Quest For A Progressive Penal Code, Legal Service India (2023), https://www.legalserviceindia.com/legal/article-14781-bhartiya-nyaya-sanhita-2023-an-analysis-of-legal-reforms-coherence-challenges-and-the-quest-for-a-progressive-penal-code.html .

[2]Ministry of Home Affairs, The Bharatiya Nyaya Sanhita, 2023, PRS Legislative Research (2023), https://prsindia.org/billtrack/the-bharatiya-nyaya-sanhita-2023 .

[3] Bhartiya Nyaya Sanhita -Section 111(1).

[4] Ibid

[5]Criminal Law Bills 2023 Decoded #6: Organised Crime in BNS 2023 - Examining Vagueness and Overcriminalisation Concerns," Criminal Law Blog (September 25, 2023), https://p39ablog.com/2023/09/criminal-law-bills-2023-decoded-6-organised-crime-in-bns-2023-examining-vagueness-and-overcriminalisation-concerns/ .

[6]ibid