Criminal Liability Of Corporations In Bangladesh
1. Eusof Babu & Others v. State (2013) – Dishonoured Cheques and Corporate Liability
Facts:
Madaripur Spinning Mills Ltd., a textile company, issued 22 cheques to a supplier.
The cheques were dishonoured due to insufficient funds.
Legal notices under Section 138 of the Negotiable Instruments (NI) Act were sent.
Only the directors/officers were prosecuted, not the company itself.
Issue:
Whether company directors could be prosecuted when the company itself committed the offence.
Whether corporate liability exists independently in cheque dishonour cases.
Decision:
The High Court Division (HCD) held that prosecution could proceed against directors/officers even if the company was not named.
The court applied Section 140 of the NI Act, which states that persons “in charge of and responsible for the company’s business” at the time of the offence can be held liable.
Significance:
Established that corporate liability exists in cheque dishonour cases.
Directors and officers can be prosecuted if they had knowledge or were responsible for the company’s actions.
2. Bangladesh Labour Act Cases – Corporate Liability for Industrial Accidents
Facts:
Several industrial accidents in factories (e.g., garment factories in Dhaka and Chittagong) resulted in worker deaths and injuries.
Companies often failed to comply with health and safety regulations under the Bangladesh Labour Act 2006 (Sections 62-64).
Issue:
Can a company be held criminally liable for workplace deaths due to negligence?
Legal Principle:
Section 62 imposes a duty on employers (including corporate entities) to ensure worker safety.
Liability can extend to the company as a legal person and to directors/officers “in charge” if gross negligence contributed to the incident.
Outcome/Analysis:
While no major appellate conviction exists specifically for “corporate manslaughter” in Bangladesh, commentary and tribunal decisions indicate that both the company and responsible officers can theoretically be prosecuted.
Cases are usually settled through fines, regulatory action, or compensation rather than prison sentences for the company.
Significance:
Highlights the evolving recognition of corporate criminal liability in Bangladesh beyond financial offences.
Shows limitations in enforcement and statutory clarity for corporate manslaughter-type cases.
3. Company Liability under Environmental and Regulatory Offences
Facts:
Corporations in Bangladesh have been investigated for illegal pollution and environmental damage.
Example: Factories discharging untreated effluent into rivers in violation of environmental laws.
Issue:
Can the company be criminally liable, and can officers/directors be prosecuted under environmental laws?
Decision/Analysis:
Environmental statutes treat corporations as “legal persons” capable of committing offences.
Courts have held that directors/officers who knowingly allow violations or fail to implement regulatory compliance measures can be held liable.
Sanctions typically include fines, remediation orders, and possible criminal charges against officers.
Significance:
Extends the concept of corporate criminal liability beyond cheque dishonour and labour safety to environmental compliance.
Illustrates reliance on statutory provisions rather than common law principles.
4. Bashundhara Group Investigations – Financial Crimes and Corporate Liability
Facts:
Large conglomerates like Bashundhara Group have been investigated for financial crimes, including tax evasion, accumulation of illegal wealth, and money laundering.
Officers, including the chairman and family members, were scrutinized alongside the corporate entities.
Issue:
Can a corporate entity be held criminally liable for financial crimes, and how is liability attributed to officers/directors?
Analysis:
Companies are treated as separate legal persons and can be fined or face asset freezes.
Officers and directors may face individual prosecution if evidence shows active involvement, consent, or negligence in allowing the corporate offence.
Demonstrates the practical application of corporate liability in Bangladesh in high-value corporate contexts.
Significance:
Shows the interaction of corporate liability with regulatory enforcement and criminal law.
Highlights ongoing development of corporate accountability mechanisms in Bangladesh.
Key Principles from the Cases
Corporate Offences Exist: Corporations can be liable under statutory offences like cheque dishonour, labour safety breaches, environmental violations, and financial crimes.
Directors/Officers Liability: Those “in charge” of company operations can be prosecuted alongside the company if they participated, consented, or were negligent.
Separate Legal Personality: While companies are distinct legal entities, courts use doctrines like the “directing mind and will” to attribute liability.
Enforcement Limitations: Many corporate offences result in fines or regulatory sanctions rather than imprisonment; true corporate manslaughter convictions are rare.
Sector-Specific Approaches: Liability varies depending on statute – financial, labour, environmental, and industrial compliance laws provide different mechanisms.
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