Offences by Companies and by Government Departments: Sections 86 and 87

Acquisition's defaults are mostly institutional, the Requiring Body is a company, the acquirer a department, and Sections 86 and 87 give the chapter's offences human addresses inside both: the persons in charge of the company, the head of the department, each with the classical knowledge-and-diligence defences, and each with liability extending to the officers whose consent, connivance or neglect produced the offence. This note covers the two formulas and the State amendments that have begun rewriting the second.

1. Offences by Companies: Section 86

• The deeming: where an offence under the Act is committed by a company, every person who, at the time, was in charge of, and responsible to, the company for the conduct of its business, as well as the company itself, is deemed guilty and liable to be proceeded against and punished.
• The defence: no such person is liable if he proves the offence was committed without his knowledge or that he exercised all due diligence to prevent it, the standard escape that protects honest management and strands the negligent.
• The officers' limb: where the offence is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or other officer, that officer is also deemed guilty, the second net, catching the author behind the nominal in-charge.
• The working doctrine: the formula is the one Indian regulatory law has litigated for decades, and its settled learning applies: the complaint must aver how the accused was in charge and responsible, vicarious liability is not roped onto a designation alone, and the company's own prosecution is the anchor of the officers'.

2. Offences by Government Departments: Section 87

• The deeming: where an offence has been committed by any department of the Government, the head of the department is deemed guilty and liable to be proceeded against and punished.
• The defence: unless he proves the offence was committed without his knowledge or that he exercised all due diligence to prevent it, the corporate formula applied to the State's own hierarchy.
• The officers' limb: where the offence is committed with the consent, connivance or neglect of any officer other than the head, that officer too is deemed guilty, so the liability finds the desk where the default actually happened.
• The design's significance: Section 87 is the Act's frankest admission: most acquisition wrongs are official wrongs, and the provision refuses the anonymity of "the department", the 2013 Parliament choosing deemed liability where a century of practice had offered none.

3. The Contested Edge: Sanction and the State Amendments

Section 87's calibration has been the chapter's battleground. The 2014 Ordinance and the 2015 Amendment Bill sought to recast the provision so that prosecution of government servants would require the prior sanction discipline of Section 197 of the Code of Criminal Procedure, protection the original text deliberately omitted; the central amendment lapsed with the rest (Topic 95). The States then moved under Article 254(2): Andhra Pradesh and Maharashtra have substituted Section 87 with provisions requiring courts to follow the Section 197 CrPC procedure before cognizance against government employees, and Haryana has inserted a Section 87A to the same effect, so in those States the head-of-department formula operates behind a sanction gate. The practical rule is now the series' refrain: check the State's version first, because the same official default is directly prosecutable in one State and sanction-gated next door, and the choice between the two models, accountability against protection from vexatious prosecution, is precisely the policy argument the amendment history records.

4. Related Topics and Provisions

• The offences they carry (Topics 81 and 82): Sections 84 and 85
• Cognizance and complaints (Topic 84): how the dock is reached
• State amendments (Topic 96): the Article 254(2) machinery behind the variants
• The 2015 Amendment Bill (Topic 95): where the sanction idea came from