About 420 — and 415, 409, 405 from IE

Indian Express Saturday , Apr 24, 2010 at 0151 hrs
Vinay Sitapati column
As allegations fly against Indian Premier League Commissioner Lalit Modi, one specific allegation is that Multi-Screen Media (formerly Sony Entertianment Television, India) paid US dollars 80 million as ‘facilitation fees’ to reacquire the telecast rights of the IPL. The allegation is that this amount was paid to Lalit Modi, in return for telecasting rights. These are unproven. But hypothetically, if the case is proved, VINAY SITAPATI examines some of the laws that Modi would have violated (for just this one allegation), and the possible punishment that he might face:

Money laundering

Under the Prevention of Money Laundering Act, 2002, anyone who is “connected with the proceeds of crime and projecting it as untainted property” is guilty of money laundering. This is a broad definition, and punishment under the Act is between three to seven years in jail, including a fine. But according to Sanjeev Sachdeva, partner (indirect taxes) in the law firm Luthra & Luthra, this Act’s real power is that “once notice is issued, the tainted assets can be siezed”. In other words, Modi’s assets could be siezed even while the case drags on.

Tax avoidance
Under the Income Tax Act, if a taxpayer conceals his income, he is liable to pay upto 300 per cent of the tax avoided, along with interest. If income tax officials are able to prove that Modi received some of the 80 million dollars, he will have to pay penalties on the tax avoided. In addition, Section 276C provides the possibility of a jail sentence ranging from six months to seven years for a “wilful attempt to evade tax”. But this clause is hardly ever invoked, especially for first time offenders, says a tax expert from a prominent consultancy firm, who did not wish to be identified as he was advising an interested party.
Criminal breach of trust

A Delhi-based criminal lawyer, who wished to remain unnamed as he is involved in the matter, says that “ in case of ‘corruption’ in a private organisation, the charge most usually employed is criminal breach of trust.” If the Indian Premier League is in fact a private body, then Modi could be booked under Section 405 of the Indian Penal Code which penalises those who, when “entrusted with property, or with any dominion over property, dishonestly misappropriates” it. The punishment, defined in Section 409, can be upto ten years in jail, including a fine.

Cheating
If allegations are proved against Modi, that would mean that a fellow-bidder to the broadcasting rights was cheated out of their right to transparent auction by Lalit Modi. These competitors could file an FIR against Modi for cheating, defined under Section 415 of the IPC, and punishable under Section 420 with a fine and/or imprisonment upto seven years.

Corruption?
Whether Modi would be guilty of “corruption” depends on whether he is a “public servant”. This seems unlikely given that in 2005, the Supreme Court has held that the IPL’s parent body, the BCCI, is not the “state”, though it carries out a public service and must be open to public scrutiny. Besides, Modi may not fit into any of the definitions of “public servant” in Section 2 (c) of the Prevention of Corruption Act or Section 21 of the Indian Penal Code. As Supreme Court senior advocate Rajeev Dhavan says: “IPL may be a private body engaging in a public function, but under criminal law, it is unlikely that Modi can be considered a public servant.” However, if Modi is found to be a “public servant”, he could face punishment ranging from six months to five years under Section 7 of the Prevention of Corruption Act.
-----------------------------------------------------------