Somasekhar Sundaresan: Collective conscience and social retribution

White collar crime has always been victim to society’s passions

It is the era of debating “collective conscience”. Recently, the President of India rejected a mercy petition filed by Afzal Guru, a convict on death row. He was stealthily hung to death overnight. His family was not extended the courtesy of being informed. Blatantly, government officials say, they feared the rejection of the mercy petition being stayed by courts.

One of the key merits of Guru’s mercy petition was the poor quality of the trial. The Supreme Court had acknowledged that the trial quality was poor. In upholding capital punishment, the court had relied on the need to satisfy the “collective conscience” of Indian society since was the Indian Parliament, a symbol of democracy, that he was convicted of having attacked. In less polite words, the court echoed the view that society’s blood-thirst had to be satisfied by hanging someone.

In short, if a trial did hold someone guilty, it did not matter that there were serious doubts about the quality of the justice meted out. The majesty of the court’s decision was not sought to be disturbed. Mercy petitions, necessarily, follow a final ruling by the courts of the land.

The Constitution, consciously, provided for grant of mercy by the President of India after a convict is finally sentenced by the justice delivery system. The President’s rejection of the petition was not in a reasoned order. A demand for the reasons by exercise of right-to-information legislation has been rejected.

While the current national debate is in the context of capital punishment, in the case of white-collar crime, where empowered regulators are given the capacity to inflict economic death, society’s collective conscience quite holds centre-stage. Stringent penalties for minor violations by major players in the scam are quite the norm. Ketan Parekh, was kept out for 14 years from the capital market on the ground of just a few of his transactions. Every other violative transaction could independently still be taken up for inflicting more and more punishment in future. The same person can be made to suffer injuries for the very same facts and the very same transactions. Shankar Sharma was injured in 2001 by keeping his firm, First Global, out of business for years. Ten years later, he was punished yet again for the same transactions – this time in his “individual capacity”. (Disclosure: the author was involved in the defence of the second round).

As a consequence, rather than focus on whether a certain accused in fact committed a crime that has occurred, all that enforcers need to do is focus on showing that the crime occurred was a very grave one.

They only have to invoke collective conscience of society for their enforcement actions to be perceived as kosher.

With insider trading, for example, one need not focus on whether the accused in fact committed insider trading. Society’s collective conscience would be satisfied if one just said that the accusation made is that of insider trading. It would want some head to roll – it matters not what the quality of trial is. Indeed, the very members of the ecosystem who are prone to be victims are part of such collective conscience that fuels blood-thirst. Except, of course, when the collective conscience comes knocking at one’s own door.

A senior merchant banker once wondered how lawyers could at all represent an auditor of a company in which a large accounting fraud was discovered – he had no greater facts to his knowledge beyond the morning newspapers, and whether the auditor was a victim or a perpetrator was, to him, a matter of irrelevant detail. The same merchant banker later lamented how his organisation was not being treated fairly when a large portfolio management fraud was discovered in his firm.

There are other terrible implications of such a trend in society. Regulators become wary about how they are perceived. Their actions are more driven by how society would react rather than whether justice would be rendered. They get tempted to hide information that could actually absolve an accused, on the ground that they are not relying on it to level a charge. It is the “real truth” that one seeks to pursue, one would have to shy away from enforcement when there is in fact, evidence of innocence.

When truth does not really matter, one would have to acknowledge that integrity has suffered. The truth is that courts have to dispassionately focus on the material before them to determine if the accused has committed a crime. When the law enforcement system starts believing that it should have regard to society’s passions, they necessarily fail in their duty. The day society finds for itself truths that it is willing to lie for, the collective conscience has to introspect deeply.

The author is a partner of JSA, Advocates & Solicitors. The views expressed herein are his own.

Email: somasekhar@jsalaw.com