Economic offences have been in the limelight for the last few years with a few high-profile individuals fleeing the country after duping banks of thousands of crores. Data from the latest NCRB’s Crime in India report indicates that more than 97% of the cases relating to economic offences are pending in courts by the end of 2020, the highest so far. Coupled with the high pendency is the low conviction rate in these offences.
More than three years after Mehul Choksi & Nirav Modi fled India in wake of the Punjab National Bank scam involving Rs.13.5 thousand crores, India is still making efforts to get them extradited and make them face trial in India. The same is the case with Vijay Mallya, whom the authorities are trying to bring back from London.
While these are some of the high-profile cases relating to economic offences, thousands of other economic crimes take place every year which are not reported in the media. Over the years, there is an increasing trend in the number of such offences being reported. Various laws are in place to deal with different types of Economic offences.
In this story, we analyse the trend in economic offences reported in which police has taken cognizance and their disposal, based on the Information provided in National Crime Records Bureau’s (NCRB) Crime in India report.
In 2020, Economic offences make up around 3.4% of all cognizable IPC crimes
As per NCRB’s Crime in India report – 2020, the total number of economic offences in the country in 2020 was 1.45 lakhs. This constitutes around 3.4% of all cognizable IPC crimes reported in the year. The number of economic offences has reduced compared to 2019 when it was 1.65 lakhs. This is in line with the trend observed across major crimes heads during 2020, owing to the COVID-19 pandemic.
The crime rate in the case of economic offences for 2020 was 10.8 per lakh population, down from 12.4 in 2019. The decline in 2020 can be considered an exception, based on the trends in previous years. Data over the five-year period (2016-2020) shows that there has been a year-on-year increase in the number of economic offences reported. In 2016, the number of economic offences was 1.43 lakhs, and the crime rate was 11.3, which increased to 1.65 lakh in 2019 with a crime rate of 12.4 per lakh population.
Nearly 88% of the Economic Offences in 2020 were related to Forgery, Cheating & Fraud (FCF)
In NCRB’s Crime in India (CII) report, Economic Offences are categorized under three major crime heads.
Among these, the greatest number of offences are recorded under the head – Forgery, Cheating & Fraud (FCF). In 2020, total offences related to FCF were around 1.27 lakhs, which accounted for nearly 88% of all economic offences. About 17.35 thousand cases were related to ‘Criminal Breach of Trust’ and another 672 cases were related to counterfeiting.
Trends over the past few years indicate that there is a year-on-year increase in the proportion of offences booked for forgery, cheating & fraud of all Economic offences. In 2016, these three constituted nearly 86% of all Economic offences and in 2017 it was 85.5%, which increased in the ensuing years.
Since 2017, NCRB’s CII report has combined all the Economic offences related to Forgery, Cheating & fraud under one head. Hence, we do not have separate data on each of these specific crimes. However, as per the data for 2016, Cheating constituted nearly 89% of the crimes under Forgery & Cheating (the crimes under Fraud were not separately recorded under economic offences in 2016). While the separate data under each of these heads is no more available, it can be concluded that the number of cases under ‘cheating’ could make up for the bulk of such cases even now.
In 2020, more than 100 offences were booked with Misappropriation of at least 25 crores each
Of all the Economic offences reported in 2020, more than 81 thousand cases involved misappropriation (loss or property). In around half of these, the misappropriation amount is less than a lakh rupees. In another 1/3rd of the cases, the misappropriation amount was between 1 lakh and 10 lakhs. In more than 1500 cases, the misappropriation amount is more than a crore rupees. 24 of these offences involved misappropriation amounts of more than 100 crores rupees each.
The trends even in the earlier years are on the same lines, except for offences with misappropriation amounts of 50-100 crore rupees. There were 353 such cases in 2019 which is an exception. In fact, in each of 2017, 2018 & 2020, the number of cases involving misappropriation amount between 50 and 100 crores was less than 40. It is worth noting that 332 of the 353 such cases in 2019 were registered in Andhra Pradesh alone.
More than 60% of the cases are pending investigation by the police by end of 2020
During 2020, around 3.28 lakh cases relating to Economic Offences were with the police for investigation. Out of these, around 1.27 lakh cases i.e., around 39% of the cases were disposed of by the police. In about 59 thousand cases, a final report was filed, and cases were closed while charge-sheet was filed and cases were sent for trial in courts in around 68 thousand cases.
By the end of 2020, more than 2 lakh cases accounting for nearly 61% of the total cases under investigation by police in 2020 were still pending. The trends over the last five years (2016 to 2020) indicate an increase in the percentage of cases pending with the police year on year.
With an increasing number of new cases every year, the cases to be investigated by the police have also been increasing. Though the number of cases being disposed of by the police i.e., either by submitting a final report or by filing a charge sheet has also increased, it has not kept pace with the number of new cases resulting in increasing pendency over the years.
For instance, in the year 2020, despite fewer new cases compared to 2019, the disposal rate of the police has come down 39% compared to 45% in 2019. While COVID-19 related enforcement measures could have burdened the police, the lower disposal is a concern.
Nearly 97% of the economic offences are pending trial with the courts by end of 2020
In 2020, a total of 6.35 lakh cases relating to economic offences were up for trial in the courts. Of these, the courts have disposed of only 20.5 thousand cases. Of the disposed cases, around 5.9 thousand cases resulted in a conviction, while another 11.75 thousand cases have resulted in discharge or acquittal. By the end of 2020, around 6.15 lakh cases i.e., 97% of all the cases up for trial during the year were pending.
The pending rate has gone up substantially in 2020, from around 93.6% in 2019. Between 2016 & 2020, the pendency percentage has consistently gone up to reach 97% by the end of 2020.
As is the case with Police disposal, the court disposal of cases reduced significantly in 2020 owing to the non-functioning of courts for a certain period during the pandemic.
In addition to the higher pendency, a lower conviction rate in economic offences is a cause for concern. The conviction rate is much less than the overall conviction rate for all IPC crimes.
Increasing pendency with police & courts along with lower convictions is the feature of economic offences
As is the case with most other major crimes, there is an increase in the number of pending cases both with the police as well as the courts. The COVID-19 pandemic in 2020 exacerbated the already grave situation in courts grappling with high pendency.
As highlighted earlier, the conviction rate in the case of economic crimes is around 30%, much less than the more than 50% conviction rate for all IPC crimes put together. In fact, close to half the cases do not even reach the courts as the police seem to be filing final reports without a charge sheet. All this could mean a rise in cases without adequate evidence and a lack of proper investigation by the police resulting in acquittal.
Featured Image: Economic Offences in India
