Criminal Conspiracy In Economic Offences
Criminal conspiracy under Indian law is defined under Section 120A and punishable under Section 120B of the Indian Penal Code (IPC), 1860. In the context of economic offences, criminal conspiracy plays a crucial role because such offences are often planned in secret, involve multiple actors, and are aimed at financial or commercial gain through illegal means.
🔍 What is Criminal Conspiracy? (Sec 120A IPC)
Definition:
"When two or more persons agree to do, or cause to be done—
(1) an illegal act, or
(2) a legal act by illegal means,
such an agreement is designated a criminal conspiracy."
Essentials:
Agreement between two or more persons.
Intention to commit an illegal act or a legal act by illegal means.
The act need not be committed; the agreement itself is punishable.
Mere proof of the agreement is enough, direct evidence is rare—mostly inferred from circumstances.
⚖️ Economic Offences Involving Criminal Conspiracy
Economic offences include fraud, money laundering, tax evasion, bank frauds, Ponzi schemes, insider trading, and embezzlement. These offences often involve planning and coordination, hence conspiracy charges are often added.
📚 Important Case Laws with Detailed Explanation
1. R. Venkatkrishnan v. CBI (2009) 11 SCC 737
Facts:
This was part of the Securities Scam of 1992, involving the manipulation of funds from banks by stockbroker Harshad Mehta and others. Venkatkrishnan was a senior official at a bank who helped divert funds illegally.
Issue:
Whether the accused were guilty of criminal conspiracy under Section 120B IPC read with economic offences under the Prevention of Corruption Act and IPC.
Held:
The Supreme Court held that:
There was sufficient circumstantial evidence to prove that the bank officials conspired with the brokers to siphon off public money.
The conspiracy was proved from the chain of transactions and interlinked actions of various accused.
Even if some of the accused were not directly benefitted, they played a role in facilitating the offence knowingly.
Significance:
Established that in economic offences, conspiracy can be inferred from patterns of conduct, communications, and unnatural transactions.
2. State (CBI) v. R.K. Sharma and Others (Coal Block Allocation Scam)
Facts:
This case involved irregularities in the allocation of coal blocks, leading to massive financial loss to the exchequer. Industrialists and government officials were implicated.
Charge:
Criminal Conspiracy under Section 120B IPC read with Sections 420 (cheating) and 13(1)(d) of the Prevention of Corruption Act.
Held:
The special CBI court held several accused guilty of conspiring to manipulate the screening process and furnish false data to gain allocation.
The court highlighted pre-meditated collusion between private companies and public officials.
Significance:
Reaffirmed that government corruption cases involving economic gain fall squarely within the ambit of conspiracy.
Corporate officers can be held vicariously liable if conspiracy is proved.
3. Nirav Modi & Mehul Choksi – PNB Fraud Case
Facts:
In this massive ₹13,000+ crore fraud, Nirav Modi and Mehul Choksi allegedly conspired with Punjab National Bank officials to issue fake Letters of Undertaking (LoUs) to obtain foreign credit.
Allegation:
Criminal Conspiracy under Section 120B IPC, cheating under Section 420 IPC, and charges under the Prevention of Corruption Act and FEMA.
Development:
Investigation by the ED and CBI established that internal banking protocols were bypassed with the connivance of senior employees.
Nirav Modi and others coordinated the fraud over several years, using shell companies and offshore entities.
Significance:
A textbook case of criminal conspiracy in economic offences.
International dimension, showing that conspiracy need not be confined to national boundaries.
Asset seizures and extradition proceedings rely heavily on proving the conspiracy.
4. CBI v. Moninder Singh Pandher (Noida Nithari Case – Financial Angle)
Note: Though primarily a criminal case, there was a financial conspiracy angle involving illegal organ trade and other economic elements.
Facts:
The accused were charged with not just murder, but also with operating illegal financial rackets, involving black-market activities.
Held:
While the main charges were murder and kidnapping, the court acknowledged that there was prima facie evidence of a larger conspiracy involving illegal financial gain.
Significance:
Even in criminal cases, economic motives can give rise to parallel economic offence investigations involving conspiracy.
5. Nitya Dharmananda v. Gopal Sheelum Reddy (Swami Nithyananda Case)
Facts:
There were allegations of financial misappropriation, fraudulent asset creation, and conspiracy to defraud followers.
Charges:
Criminal Conspiracy under Section 120B IPC along with cheating, forgery, and misrepresentation under Sections 420, 468, and 471 IPC.
Held:
The Supreme Court ruled that ongoing investigations into financial irregularities were valid, and conspiracy needed to be investigated thoroughly given the structured nature of the fraud.
Significance:
Even religious or spiritual organizations can be involved in economic offences through criminal conspiracy.
6. CBI v. Satyam Computer Services Ltd (Satyam Scam)
Facts:
Ramalinga Raju, the chairman of Satyam, confessed to inflating company revenues and profits for years to mislead shareholders and regulators.
Allegation:
Criminal conspiracy to defraud investors, SEBI, and public institutions.
Held:
Investigations revealed a planned effort involving senior executives to fabricate financial statements.
Significance:
One of India’s largest corporate frauds, proving how white-collar crime often involves an orchestrated conspiracy at the boardroom level.
🧠 Key Takeaways
Economic offences often involve conspiracies, as these crimes require planning, coordination, and concealment.
Courts rely on circumstantial evidence, conduct, communication trails, and financial records to establish conspiracy.
Corporate officers, bankers, bureaucrats, and even politicians can be implicated in conspiracies.
Criminal conspiracy can be charged independently or along with substantive offences like cheating, fraud, corruption, money laundering, etc.
Mens rea (guilty mind) is crucial – there must be an intention to commit or help in committing the illegal act.
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