Govt moots ‘civilised law’ to check frauds

NEW DELHI: The government is likely to confront corporates indulging in serious economic offences with a ���civilised law��� soon. The plan is to evolve a law which the Serious Fraud Investigation Office (SFIO) can apply as a force of deterrence.

It will, however, not treat the offender as a criminal till the charges are framed. It will also enable the agency to take swift action against an offender without going to court for warrants each time, said a source.

Last year, the SFIO had given a draft for the new law to the company affairs ministry, which now needs to be modified on these lines, said the source. The JJ Irani panel on the proposed new company law also recommended a special statute for SFIO, which will enable successful prosecution of the guilty.

���The idea is to avoid searching and arresting the accused at unearthly hours unless he is fleeing from the country. While the new dispensation would be more civilised in its treatment of the suspect, a lot of procedural requirements in the present investigation process have to be streamlined,��� said an official.

At present, once the government refers a case to the SFIO, it gives an investigation report and needs another authorisation to proceed with the prosecution of the accused.

Besides, it requires the ministry���s consent to probe a person or company related to the investigation. Also, once the probe is in progress, it will have to go to courts for search and arrest warrants. All this, deprives the multi-disciplinary body of time in cracking a crime.

Currently, additional directors from different departments derive their powers from the laws their respective ministries administer. This system is unlikely to change in the proposed new law.

The Irani panel had also recommended that certain ambiguities in the law need to be removed to enable SFIO to take up prosecution under the IPC, in addition to violation of the Companies Act.

The ministry is examining the agency���s powers to carry out prosecution in criminal offences, which has to be proved beyond reasonable doubt, unlike in case of civil offences where the preponderance of evidence is less.