Economic Offences

Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi – 110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)
Semester: Fifth Semester
Name of the Subject:
Socio- Economic Offences
Subject Code:-LLB507 & 509
Unit:- 1
Unit:- 1
Standards Weights and
Measures

The Role of Weights and Measures in
Society
• Trade and Commerce have always been at the
foundation of every civilization. No society can
develop and prosper without its citizens conducting
business transactions. No transaction can be
conducted to the mutual satisfaction of the parties
involved unless each is assured the other is fair and
honest. The basis of fair and honest trade is, and
always has, rested on the use of accurate weights and
measures. Thus, throughout history, weights and
measures has played an important, if largely unseen,
role

• Ever since primitive societies first needed
rudimentary measures for construction, clothing, and
bartering food, or raw materials, weights and
measures have been amongst the earliest tools used
by humans. Early units derived from parts of the body
and natural surroundings. Measures of length came
from the forearm, hand, or finger. For weight, seeds,
grains, and stones were used as standards. Time was
measured by periods of the sun, moon, and other
heavenly bodies.

The Need for Weights and Measures
• These early inexact measures were, at best, only good
for the time and locale they were being used and, at
worst, a means of cheating and defrauding
unsuspecting customers. As civilizations developed,
it became necessary to enact laws to regulate
transactions and the accuracy of standards. As
standards of weight and measure developed so did the
need for methods of determining their accuracy and
the honesty of transactions using them.

• Devising a system of measurement is
relatively easy compared to the work
necessary to ensure agreement between
various standards. How can a consumer be
assured that the pound used to weigh apples in
Kansas has the same value as the pound used
to weigh oranges in San Francisco? This is
done through a series of comparisons in which
each standard is compared to a standard with
greater accuracy

International Standards
• The Convention of the Metre, a diplomatic
international treaty that gives authority to the
General Conference on Weights and Measures to
act in matters of world metrology was signed by
17 countries in 1875. The Convention, modified
slightly in 1921, remains the basis of all
international agreement on units of measurement.
There are now more than fifty Member States,
including all the major industrialized countries.

Relationships With Other Organizations
• In this segment, you will be introduced to some of the organizations and
their acronyms that you will encounter throughout this training and in your
work. By the end of this section, you will be speaking a different language.
In carrying out its mission "To preserve and defend the measurement
standards essential in providing the citizens a basis of value comparison
and fair competition in the marketplace,” the California Department of
Food and Agriculture (CDFA), through the Division of Measurement
Standards (DMS) interacts with many international, national, federal, and
county organizations.

The Standards of Weights and Measures (Enforcement) Act,
1985:
• This act provides the enforcement of the standards of weights and
measures established by or under the Standards of Weights and
Measures Act, 1976 and for matters connected therewith or
incidental thereto. The enforcement aspect of weights and measures
which was earlier in the state list was transferred to the concurrent
list by the forty-second Amendment to the Constitution. As
mentioned above, majority of the states have not taken action for the
revision of their enforcement legislation. Consequently, the
enactment of a comprehensive legislation for the enforcement of the
standards established by the 1976 Act has become an urgent
necessity. Further a Parliamentary Law for implementation of the
modem system of weights and measures would ensure countrywide
uniformity.

The gap in legislation:
•Legislation governing (Packaging Rules) the environment
should cover the problems of pollution created by the packaging
adopted or the lack of packaging where it should have been
adopted. b. The legislation with regard to improving quality of
life which needs to be adopted are those that must guarantee of
product packaged. c. More importantly in-as-much as the life
styles cannot be reversed and products have to be moved, there is
need to have a regulation to insist on the development of right
packaging techniques for agricultural produce and other edible
products with a view to preserve and protect the source /
resources and enable the teeming millions to be fed.

In addition, one must foresee the future to conserve the material
and energy resources of the country and have inbuilt measures
whereby these resources could be deployed for higher value usage.
Conservation of forest resources is a point under consideration.
The industry regulates the types of packaging and systems of
production of packaging materials that should be permitted to be
manufactured in the context of the overall national gains. . A
desirable corollary of such guiding principles could probably be
the development of technologies aimed at upgrading through
simple process the renewable (Natural) packaging materials,
which developing countries possess in abundance.

In the selected cases, the enforcing authorities have misused their
powers and harassed the traders and customers only because half
knowledge of the Packaging Rules, 1977. They are neither
utilising the powers for the benefits of the consumers nor for the
safeguard of the trading commodities.
Now let us see why the provisions of Rule 6 of Packaging Rules,
1977 are not applicable to these packages. It is because the articles
optical have been put into optical case in the presence of the
customer and it is not a prepackaged commodity.

The developing countries have taken the first step in the
direction of formulating legislation with regard to
Packaging Rules 1977 and the effects have set to be felt.
If the positive features of such legislation
The protection of the consumer; b. Help in conserving
scarce resources and the redistribution; c. Contribution to
the industrial growth

If the above have to be fully realized, the efforts
to educate the consumer must be evolved with
almost vigour and speed. Otherwise, the intended
pulposes of the legislation would remain in the
annals of law and the benefits would not be
diffirsed. Where the consumer is involved, he has
a right to be informed of the product, the
deleterious the price.

An indisputable fact is that laws for packaging of food items in
poor nations are lacking in many respects. Not only these are
inadequate in coverage, but even in cases where these exist, the
enforcement if is felt, is not as rigorous as it ought to be. It is true
that dealing through legislation with certain aspects of packaging
is a complex and cumbersome phenomenon and there appears to
be a good case for the need voluntary discipline between the
industry and Trade-but this notion, with few exceptions, has so far
not produced results. Under such circumstances, ideas do filter
through many organisations that recourse to legislation with strong
arms for enforcement appears to be the best and inescapable
solution to overcome the malady.

As the analysis indicated, the manufacturer
should positively involve the packaging in setting
of the organisational goals so that the
manufacturers feel that they are part and parcel of
the packaging unit.
The manufacturer should try listening to the
suggestions of the packages. The supervisor
should not be the taskmaster instead they should
consider the personal interest of the package
technology.

The manufacturer is to be suggested that in good packages with
the demand the manufacturer should show considerable interest
towards the personal status of the package. The study indicated
that some of the packers suggestions were not considered. Their
demands were neglected. They did not really felt that there was
increase in packaging. The package must contained proportionate
price according to the cost of material in package. Excess price
should not be printed on any package only because to give
discount or commission" . By taking excess price on package it
leads to cheat the consumer,

Unit:- 2
Unit:- 2
Food Adulteration in India

REGULATORY REQUIREMENTS IN
INDIA
 To safeguard health and safety, Government of India
promulgates regulatory requirements for manufacture
and sale of goods and services, including those
imported
 Regulations are stipulated through Various Acts/
Rules & Regulations by different Ministries under
Government of India
 Enactment of Acts, Rules & Regulations is done
taking cognizance of the relevant WTO Agreements

Regulatory measures should have
minimum compliance costs
 Regulatory measures should benefit
society
Regulatory measures should comply with
the laws of the country

REGULATORY REQUIREMENTS
Regulations should be made & enforced in a
transparent manner
Regulations should be fair and treat all equitably
Regulations should be drafted in clear and simple
language for understanding of all
Regulatory measures should be flexible for
amendments/ revision , if required due to changed
circumstances

Establishment of SARSO (South Asian Regional
Standards Association)
Objectives:
1.Coordination & Cooperation between SAARC
countries in standards & Conformity Assessment
2.Develop harmonised standards
3.Facilitate intra regional trade
4.Promote MRAs on conformity assessment

FOREIGN TRADE
QUALITY REGULATIONS IN INDIA
• FOR IMPORTS:
 Directorate General of Foreign Trade
 Relevant Regulatory Agency
 BIS for 68 Products
• FOR EXPORTS:
 Export Inspection Council

SOME ACTS/ REGULATIONS/ CONTROL ORDERS TO
REGULATE TRADE IN INDIA
• Prevention of Food Adulteration Act 1954
• (on the pattern of USFDA)
• Plant Quarantine (Regulation of Import into India) Order, 2003
• Insecticides Act
• Fruit Products Order, 1955
• Meat Food Product Order 1973
• Milk and Milk Product Order 1992
• Standards on Weight and Measurement Act 1976
• Bureau of Indian Standards act, 1986
• AGMARK Act 1937

SOME ACTS/ REGULATIONS/ CONTROL ORDERS TO
REGULATE TRADE IN INDIA
• Drugs & Cosmetics Rules
• Textiles Regulation 1988
• Export (Quality Control and Inspection) Act, 1963
• Indian Explosives Act,1884
• Mines Act

ACTS/ REGULATIONS/ CONTROL ORDERS
To regulate trade
through Mandatory Certification by BIS
• Prevention of Food Adulteration Act 1954
• The Infant Milk Substitutes, Feeding Bottles and Infant
Foods (regulation of production, supply and distribution),
Act
• Bureau of Indian Standards Act, 1986
• Indian Explosive Act,1884
• Essential Commodities Act,1955
• Environment (Protection), Act 1986

All standards are widely circulated at draft stage
Period of comments is generally not less than 3
months,
For urgent reasons pertaining to safety, health or
environment, period can be reduced Drafts documents
are hosted on BIS website for public comments
All comments are duly considered by the
appropriate authorities
Programme of Work is published and also hosted on
BIS website and is periodically updated

PREPARATION
Initiated by regulator of proposed legislations
Complete notification format by the Regulatory Body
in consultation with Ministry of Commerce
Clear and descriptive outline of the regulatory proposal
Give adequate time to comment on the proposal
Reasonable time for adoption of measure
SUBMISSION
Prepared notifications are sent to WTO Central
Registry of Notifications (CRN) by National Notification
Authority

Criteria for notification includes assessment of:
whether international standard exists or technical
content differs from international standards impact of
regulation on trade whether regulation deals with
technical requirements or SPS measures for a
product/group of products (relevance under the TBT and
SPS Agreements)
Various sources that are consulted:TBT Agreement,
and relevant Committee recommendations and decisions
regulatory agency responsible for the regulation

Unit:- 3
Unit:- 3
EFFECT OF ANTI -
CORRUPTION LEGISLATION

ANTI - CORRUPTION REGIME
1. Legislative framework
2. Administrative / Institutional framework
3. International Conventions / Regulations
4. Court precedents / Judge made law

1. Legislative framework
 Corruption Act
 Money Laundering Act
 Right to Information Act
 Benami Transactions Prohibition Act

Administrative / Institutional framework
The Central Vigilance Commission
The Central Bureau of Investigation
The Office of the Comptroller and Auditor General
The Chief Information Commission
E-governance

International Conventions / Regulations
UN Convention against corruption - not ratified by Japan,
Germany, Korea and others.
Financial Action Task Force
ADB’s anti-corruption action plan for Asia-Pacific

Court precedents / Judge made law
Cancellation of contract / withdrawal of tender
Demand or solicitation is an offence
Employment of decoys and spies / sting operations

ADMINISTRATIVE SANCTIONS
• Object: to prevent frivolous prosecutions of public servants
• Without sanction, Court will not cognize offences of gratification,
abetment, misconduct etc. (u/s 7, 10, 11, 13 and 15 of the Corruption Act)
• Sanction to be given:
 By competent authority for all Govt. employees except Group A Officers
 By Govt. itself for Group A Officers
 Within 3 months
• Courts not to direct Government to issue sanctions

US AND UK LAWS; COMPARISON WITH;
• US : Foreign Corrupt Practices Act, 1977
• UK : Bribery Act, 2010

EXAMPLES OF RECENT SCAMS
Bribery and abuse of power
 (Coalgate)
Adarsh Housing
Commonwealth games (US$ 13b)
2G spectrum allocation (US$ 40 b)
Kickbacks in defense
Corporate fraud

Strict law enforcement
Procedure simplification: legal and administrative
Electoral reforms
Citizen empowerment
Police reform

Removal / reduction in number of intermediaries
Transparency and accountability in governance
Corruption free governance a fundamental/human right
Whistleblower policy

Unit:- 4
Unit:- 4
Prevention of Corruption
Act, 1987

Prevention of Corruption Act, 1987
• Existed earlier, revised in 1987
• A very broad definition of public servants, to
whom it applies
• In case of conviction, imprisonment from 6
months to 7 years
• Any one with assets disproportionate to his
income commits ‘criminal misconduct’
• Members of legislatures are covered, according to
the Supreme Court

• A police organization
• Can take up investigation of an offence
only if the concerned state government
permits it to.
• In practice, blanket permission by the
states to investigate corruption offences
by central government employees

Central Vigilance Commission (CVC)
• Supreme Court/High Courts often ask CBI to
investigate particular cases, under PIL
• Initially set up as an anti-corruption agency. Now
takes up all sorts of case-heinous crimes, terrorism
etc.
• Most of the senior officers drawn from state
governments for 5 years

• Set up in 1964 as the apex organization for
maintaining probity in public life
• Causes complaints to be enquired into
• Monitors/conducts disciplinary proceedings involving
corruption
• Prior to 1998, not much teeth
• Advising not binding on the government, however
disagreement cases mentioned in annual report,
placed before parliament

Central Vigilance Commission (CVC)
• Each ministry/organization has a CVO,
appointed after clearance from the CVC
• The CVO reports (for most matters) to the
CVC
• Monitors and takes action on irregularities in
the organization, and reports them to the CVC
• All cases of suspected corruption referred to
him

Chief Vigilance Officers (CVO s)
• Object: to prevent frivolous prosecutions of public servants
• Without sanction, Court will not cognize offences of gratification,
abetment, misconduct etc. (u/s 7, 10, 11, 13 and 15 of the Corruption Act)
• Sanction to be given:
 By competent authority for all Govt. employees except Group A Officers
 By Govt. itself for Group A Officers
 Within 3 months
• Courts not to direct Government to issue sanctions

Conduct Rules (some examples relating to the higher civil
service)
• Intimation about all moveable/immoveable property
required at the time of joining civil service
• No acquisition of immoveable property without
previous knowledge of govt.
• Every transaction exceeding Rs. 15000 ($300) to be
informed of within a month
• Annual return in respect of immoveable property

Conduct Rules
•Can accept gifts from friends and relatives on
special occasions, within Rs. 5000 ($100)
•No speculation in stocks/shares
•And no conduct ‘unbecoming’ of a government
servant

Parallel to the central government
Role of CBI played by vigilance wing of the state
police
Role of CVC by the state vigilance
bureaus/ombudsman
No functionary equivalent to CVO s of the central
government

CBI not really independent. The govt. could bring in
new officers, or shift out inconvenient ones, at will
Nothing at the disposal of CVC to enable it to exercise
authority. It could not ask the CBI to investigate an
alleged offence
‘Single Directive’: No investigation could be started
against officers above a certain level

Sanction for prosecution: permission of government
needed before actual trial began. No time limit.
Slow investigation (sometimes)
Slow disposal of cases in courts: the guilty never got
punished

Directions issued in a public interest case, seeking
investigation against certain high functionaries of the
government
Recommendations of a govt. committee adopted by
the court
CVC to be made statutory
Single directive struck down (violated the
‘fundamental’ right to equality)

Time limit fixed for sanction for prosecution
CBI to report to CVC for corruption cases
Chief Vigilance Commissioner to be appointed
by a committee with the leader of opposition as a
member
CBI Director, and other senior officers to be
appointed (deputed) by a committee headed by
the CVC

CVC could now cause specific complaints to be
investigated by CBI
Fixed tenure of 2 years for Director, CBI
Independent prosecution agency to be set up
In general the CBI to be freed from extraneous
influence of any kind

The CBI definitely has much more independence.
There have been instances of the govt. wanting to shift
out officers but not succeeding
The CVC now plays a more important role. It has the
services of CBI at its disposal
However, there is not much change in the disposal of
work by the CBI. Not much change in the investigations
completed

Thank You

Economic Offences

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