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[1982] CLJ 225

Criminal Liability of Corporations in Malaysia

by
Yashwant Rai Vyas1
Malaysia

Owing to the rapid industrialization, the number of corporations has increased tremendously during the present century. They virtually cover almost all
activities of human life but their presence is felt most in the commercial field. Side by side with this development, as demanded by an industrial society, a
whole new area of criminal law has developed in the form of regulatory and public welfare offences. It is in this context that the question of corporate criminal
responsibility has acquired a new importance and dimension. It is proposed in this paper to examine the state of Malaysian law dealing with the criminal
liability of corporations.
The law relating to corporate criminal responsibility is remarkable for its lack of clarity.2 This appears to be due to various factors. Firstly, it is of relatively
recent origin. Secondly, there is the question regarding the nature of the corporate personality. The whole of criminal law has been designed with natural
person in mind, while in case of corporate crimes, an artificial juridical person has to be super-imposed in place of a natural person. This has created, as we
shall see later, both procedural as well as substantial difficulties. Thirdly, there is the interaction of various policy considerations. A view is held that
corporations serve a useful purpose in society and, therefore, should not be subjected to the harsh rules of criminal law. On the other hand, a view is
propounded that since the corporations are spreading their tentacles in almost all fields of life, there is no justification in excepting them from criminal
responsibilities.3
At one time, it was supposed that corporations lay quite outside the criminal law. However, when the Penal Code 1872, the General Clauses Ordinance 1888,
and Companies Ordinance V of 1889, were introduced in the Straits Settlements, it was an accepted principle in England that corporations may be criminally
liable for certain offences.4 Section 11 of the Penal Code 18725 provided that:

the word "person" includes any company or association or body of persons, whether incorporated or not.

This provision is still retained in s. 11 of the present Penal Code.6

So also, s. 3(22) of the General Clauses Ordinance provided that:

Unless there be something "repugnant in the subject or context", "person" shall include "any company or association or body of individuals
whether incorporated or not.

This section sought to introduce wider rule of liability than the Penal Code since it was applicable to every written law. However, it contained a qualifying
clause "repugnant in the subject or context". This provision is still retained in the Interpretation and General Clauses Ordinance 19487 and the Interpretation
Act 1967. However, the latter does not contain the qualifying clause.
A plain reading of these sections gives an impression that the liability of corporations is extended to all statutory offences. However, it is submitted that when
these provisions were introduced, it was not contemplated that the effect of these sections would be to extend liability for all or even most statutory offences,
to corporations8. This conclusion is supported by the observation that the word "person" is used frequently in the Indian Penal Code in a sense in which it is
clear from the context that corporate bodies etc. are not included.9 Moreover, such a possibility was not contemplated by the Courts also. In The King v. Yong
Lee Seng & Co.,10 the respondent company was charged under s. 17 of the Liquors Ordinance 1894, for having removed dutiable liquors from a licensed
warehouse without a permit. In its judgment the Court of Appeal said:

When the Liquors Ordinance 1894 was passed it was not intended that the word "person" should at any rate, generally, in the Ordinance, include
to use the words of s. 3 of the General Clauses Ordinance 1888, "any company or association or body of individuals whether 'incorporated or
not.'11

On the provisions of s. 11 of the Penal Code the Court said:

although this is correct no doubt as regards Penal Code as a general rule, still there are cases even in the Penal Code where ... it is clear the
word "person" cannot include a company or corporation, as, for one instance, in s. 394 of the Code.12

The limitations to the generality of the provisions of Penal Code and Interpretation Acts is perhaps, due to the intangible nature of the corporate person. This
has created both procedural and substantial difficulties.12a
Procedural Difficulties
The procedural difficulties related to summoning a corporation before a Court and of its punishment. Earlier following the English Courts,13 the local Courts
took the view that since a corporation cannot be summoned before the Court therefore its conviction could not be permitted. In The King v. Yong Lee Seng &
Co.14 the Court of Appeal held that since a company cannot tender itself to be examined upon its own behalf therefore its conviction cannot hold good.
Similar view was taken by the Supreme Court in PP v. Jelai Concessions (Pahang) Ltd.15 where an appeal against the acquittal of the respondent company
was disallowed for an offence under s. 118 of the Mining Enactment 1928 for carrying on mining operations without lawful authority. The decision of the Court
was based inter alia on the ground that under the provisions of the Criminal Procedure Code, under which the proceedings were conducted, an accused
person has a right to tender himself and give evidence on his own behalf. Since such a right cannot be exercised by the company its conviction cannot stand.
However, certain observations of the Court in that case were quite confusing. For instance it observed:

It seems to me impossible to conceive that the draftsman of the Enactment had in mind that the whole of the members of a corporate entity would
proceed to mining land fully equipped with implements, e.g., changkols, baskets, etc. and endeavour to dig the ground and recover ore.16

However, this procedural difficulty has been resolved by the decision in Rex v. Lee Printing Co. Ltd.,17 where a preliminary objection was raised on behalf of
the respondent company that the committal for trial of the company was a nullity. The Court rejected the objection and held that the limited company has been
properly committed to stand its trial in the Court and must attend and plead and stand its trial accordingly through an advocate or duly accredited agent. The
Court based its decision on the ground inter alia that under the order of commitment what is necessary is to find the right of the Public Prosecutor to present
his indictment and the jurisdiction of the Court to try to charges which he presents. That right and that jurisdiction cannot depend on the fact that the accused
person has been in prison or on bail while awaiting his trial. It is not necessary to commit a limited company to prison nor to give it bail. It cannot run away. If it
does not appear at the Assizes it can be dealt with for contempt of the order committing it to stand its trial.
It may be noted that this difficulty in England was finally removed by making statutory provisions under s. 33, Criminal Justice Act 1925, which allowed a
corporation to appear through a representative. In Malaysia also such a provision exists under s. 35(iii), Criminal Procedure Code.18
Another procedural difficulty in relation to corporation relates to its punishment. There are certain offences which necessarily entail the consequences of
corporal punishment or imprisonment and it is a principle of criminal law that where there is an offence there must be a punishment.19 Since, a body
corporate cannot be subjected to corporal punishment or imprisonment, therefore, it cannot be prosecuted for offences where such punishment provided20. In
State of Maharashtra v. Syndicate Transport Co. (P) Ltd.21 the respondent company was charged under s. 420 of the Indian Penal Code21a for cheating and
dishonestly inducing delivery of property. The said section provided for a sentence of seven years' imprisonment and fine. It was argued before the Court that
as certain offences had to be punished with imprisonment and it would not be possible to impose a punishment of imprisonment on a corporate body,

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therefore, the definition of a "person" in s. 11 Indian Penal Code (s. 11 Malaysian Penal Code) would have to be read as being subject to the qualifying clause
"unless there is anything repugnant
[1982] CLJin the
225subject or context". Accepting this contention it was held that the "person" in offences where imprisonment is
mandatory does not include corporate body.22
However, in Municipal Corporation of Delhi v. J.B. Bottling Co. Pvt. Ltd.23, the Delhi High Court took a different view, viz that there is no difficulty in the Court
passing the sentence of the imprisonment and fine in case of a company but ex facie such an order which is contemplated by the section will not be passed
as the sentence, so far as imprisonment is concerned, cannot be executed but that does not mean that the company is granted exemption from indictment. It
is true that the sentence of both imprisonment and fine is mandatory in the sense that it has to be imposed but it will be limited to fine where it cannot be
imposed, as corporal punishment in the case of companies becomes impossible of execution.
In The Coastal Bus Co. Ltd. v. P.P.,24 the Court said, obiter, that in the case of a company, the sentence of imprisonment in default of payment of fine is
clearly wrong, which implies that a company cannot be subjected to the punishment of imprisonment.25
Thus, a sentence of fine may be imposed against a corporation apart, of course, from any statutory disqualification or forfeiture.25a
However, this difficulty is only of a technical nature, hence there is no justification in allowing corporate bodies to take advantage of it and claim immunity from
criminal proceedings. It is, therefore, submitted that a suitable amendment may be made either in the Cr. P.C. or in the Interpretation Acts for making
provisions for imposing fines as punishment on corporations in lieu of imprisonment. Such a provision seems to exist under the Canadian Criminal Code.26 It
may be noted here that, inspite of practical difficulty of imprisonment of corporation, a valiant effort has been made recently in England to provide for the
imprisonment of a corporation. Section 68(5), Companies Act 1967 proclaims:

An insurance company which contravenes a restriction ... shall be guilty of an offence and liable on conviction on indictment to imprisonment for a
term not exceeding two years.

How this provision will be enforced, in practice, is still a matter of conjuncture.

Substantial Difficulties
Substantive law posed several difficulties in rendering corporations criminally liable. A corporation can function only through its employees and agents, and it
is the act or omission on the part of any employee or agent which can render the corporation punishable for an offence. A corporation's liability could not
therefore be other than vicarious and, at common law generally there was no vicarious liability in criminal law. Therefore, the early 19th century jurists
expressed a doubt as to whether a corporation could at all be made punishable for the acts or omissions of its employees or agents. Subsequently the theory
was developed that a corporation could be made criminally liable for the breach of such statutory obligations, for which it was not necessary to prove the
existence of mens rea.27 Thus, the notion of "vicarious liability"28 was introduced in criminal law also.
This doctrine is well illustrated in the speech of Viscount Reading CJ in Moussell Bros. Ltd. v. London and North Western Rly. Co.29

Prima facie, then a master is not to be made criminally responsible for the acts of his servant to which the master is not a party. But it may be the
intention of the legislature, in order to guard against the happening of the forbidden thing, to impose a liability upon a Principal even though he
does not know of, and is not a party to, the forbidden act done by his servant. Many statutes are passed with this object. Acts done by the servant
of the licensed holder of licensed premises render the licensed holder in some instances liable, even though the act was done by his servant
without the knowledge of the master ... In those cases the legislature absolutely forbids that act and makes the principal liable without a mens
rea.30

So, apart from his strict liability, an employer might find himself vicariously liable for acts of servants to whom he had "delegated" his functions. Thus, the
vicarious liability now arises in two situations. In the first place, where an individual delegates to another, the performance of duties cast on him by statute, the
individual may be held liable for the acts of that other. Secondly, an employer may be liable for acts done physically by his employee because those acts are
held, in law, to be his, the employer's acts. A corporation may be vicariously liable in both these situations in the same way as a natural person.31
In Malaysia, the doctrine of vicarious liability seems to have been accepted by the Courts. In Pillay v. P.P.,32 the manager of a company, Century Motors Ltd,
was charged for failing to pay the provident fund contribution of an employee of the company under s. 16A(1)(c) of the Employees Provident Fund Ordinance
1951. In the course of its judgment, the Court said, obiter, that the statutory offence under s. 16A(1)(c) of the Employees Provident Fund Ordinance is one of
strict liability and the conviction of Century Motors should have been inevitable upon mere proof of nonpayment of any contribution due in respect of any of its
employees.33
Corporate Mens Rea
Earlier, it was thought that a corporation has no soul to be damned and no body to be kicked.34 Since the corporation has no mind and could therefore have
no guilty mind, it could not be held responsible for offences involving mens rea. However, during the Second World War period, a very important development
took place whereby the criminal responsibility of the corporations was widened beyond cases of vicarious liability. In 1944, in trilogy of cases, DPP v. Kent and
Sussex Contractors Ltd.35,R. v. ICR Haulage Co. Ltd. & Ors.,36 Moore v. I. Bresler Ltd.,37 the Courts evolved, what is now termed as, personal liability of the
corporations. Under such a liability a corporation is identified with its responsible officers and acts and mental state of those officers may be attributed to the
corporation itself. Corporate mens rea is, thus, derived from the same line of reasoning that led to the organic theory,39 the corporation through one of its
organs is deemed to have formed the necessary intent. This principle was expressed by Denning LJ (as he then was) in the following words:

A company may in many ways be likened to a human body. It has a brain and a nerve centre which controls what it does. It also has hands which
hold the tools and act in accordance with directions from the centre. Some of the people in company are mere servants and agents who are
nothing more than hands to do the work and cannot be said to represent the mind or will. Others are directors and managers who represent the
directing mind and will of the company, and control what it does. The state of mind of these managers is the state of mind of the company and is
treated by the law as such.40

The personal liability of the corporation can thus be attached to it only by attributing to it certain of the activities of individuals identified with the corporation.
Thus, under the English law there clearly emerges the distinction between the vicarious and personal liability of a corporation. This distinction is exhibited in
the following passage in Tesco Supermarkets Ltd. v. Natrass.41

A living person has a mind which can have knowledge or intention or be negligent and he has hands to carry out his intentions. A corporation has
none of these: it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting
for the company. He is acting as the company and his mind which directs his acts is the mind of the company. There is no question of the
company being vicariously liable. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company, or, one
could say, he hears and speaks through the person of the company, within his appropriate sphere, and his mind is the mind of the company. If it is
a guilty mind then that guilt is the guilt of the company. It must be a question of law whether, once the facts have been ascertained, a person in
doing particular things is to be regarded as the company or merely as the company's servant or agent. In that (i.e., the latter) case any liability of
the company can only be a statutory or vicarious liability.

The law, however, provides no clear principle to define the degree of connection with a corporation that is necessary to constitute an individual as an organ of
the company from which corporate criminal liability might follow. It is around this point that most of the controversy with regard to corporate criminal liability is
still continuing. In DPP v. Kent & Sussex Contractors Ltd.,42 the intention of the transport manager of a company was imputed to the company. That decision
was approved in R. v. ICR Haulage Co. Ltd.43, where it was said that the acts of the managing director were the acts of the company and the fraud of that
person was the fraud of the company. In Moore v. I. Bresler Ltd.,44 the secretary of the company and its sales manager, of the branch concerned were
identified as the company. Welsh45 criticised this decision on the ground inter alia that the Court went too far down the scale. In Tesco46 the House of Lords
held that the branch manager of the company is not the company's brain and does not act as the company.
The question of corporate mens rea came for consideration in Malaysia in PP v. Teck Guan Co. Ltd.46a. In this case the respondent company was charged
under s. 30, Forest Enactment for the possession of 13 logs bearing the property hammer marks of some other company, without lawful authority or legal

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rights. It was acquitted by the Magistrate on the ground that knowledge was an ingredient of the offence and mere possession was not sufficient to convict.
Relying on the observations [1982]
in Newman
CLJv.225
Jones,:46b

That a corporation will be placed in a serious position if it is to be held liable in every case through the act of its servant. Generally, a master is not
responsible for the act of his servant when that servant acts without his knowledge and outside the scope of his authority.

The Court in this case upheld the acquittal of the company. Surprisingly there is no mention, in this case, of the 194446c and subsequent cases in England.
However, in the Malaysian Courts also distinction seems to have been drawn between the vicarious and personal liability of the corporations. In Yue Sang
Cheong Sdn. Bhd. v. P.P.47 the Federal Court appears to have accepted the principle of personal liability. In the instant case, two questions were referred to
the Court for its consideration:

(1) Whether a limited company charged under s. 135(1)(d) of the Customs Act 1967 can be guilty of such criminal offence without proof of mens
rea of its agents or officers.
(2) If the answer to (1) is in the negative, whether it is relevant to consider the relative importance of the agents or officers of the limited company
whose knowledge is to be imputed to the company.

The first question was answered by the Court in the negative. While for the second question it unanimously found a ready answer48 in the following passage
of the speech by Lord Diplock in Tesco49:

In my view, therefore, the question: what natural persons are to be treated in law as being the company for the purpose of acts done in the course
of its business, including the taking of precautions and the exercise, of due diligence to avoid the commission of criminal offence, is to be found
by identifying those natural persons who by the memorandum and articles of association, or as a result of action taken by the directors, or by the
company in general meeting pursuant to the articles, are entrusted with the exercise of the powers of the company.

Thus, the persons whose knowledge is to be imputed to the company are those who are entrusted with the exercise of the powers of the company. This
decision seems to be a good example of what may be termed as "mechanical jurisprudence". It is most respectfully submitted that due consideration ought to
have been given by the Court to the various issues involved in providing a basis for the criminal liability of the corporation in the case of mens rea offences.
Whereas other heads of corporate liability are the creatures of statutory law, corporate mens rea is a fiction created by the Courts. This is a judge-made law.
Accordingly, in such a situation, a thorough discussion of the various issues involved is desirable.
Tesco is, probably, the most controversial decision on corporate criminal liability49a. The purpose here is not to analyse that case but to offer a few
comments, which may be useful.
The decision has been considered as "a blow against enterprise liability" and as putting a question mark on the enforcement of public welfare legislation
against organisations.50 It was said that Tesco creates, in effect, a discriminatory rule in favour of large-scale employers like corporations.51 The practical
effect of this case was that the prosecutors in many cases were reluctant to proceed against large employers as is evident from the Report of the Inter-
Departmental Committee, which says:

Local authorities with few exceptions are unwilling to prosecute employees such as shop managers, in cases where the trader has argued that
the offence has arisen from the employee's act of default, there must be many instances of the Act being flouted with impunity.52

It was said that:

If seen in a larger perspective Tesco decision may be regarded as an example of the limitation of judicial innovation, here in applying criminal law
to the process of regulating economic activity. One can see that initially the approach taken by the Courts to their function in this process was
constructive - the development of the principles of strict, vicarious and then corporate liability being evidence of this. It may now be that, in
England at least, the judicial refinement of the latter two of these principles has brought things to the point of diminishing returns so far as the
Court's part in this process is concerned.53

However, these were the general comments on Tesco as such. Let us now turn again to the question of identification. The Federal Court in Yue Sang Cheong
Sdn. Bhd.,54 thought it proper to identify the company with its formal constitutional organisation. The practical effect of this seems to be to confine the
identification doctrine to the behaviour of a few men meeting at the headquarters of the company, when the activities of the company may be country wide. In
many cases, there might be difficulty in proving relevant states of advertence on the part of personnel far removed from the actual scene of violation. The line
seems to have been drawn too tightly. It is through that "if the companies are only liable for the crime of their board they will rarely be liable".55 Although, the
test of identification adopted by the Federal Court is a bit wider than the board of directors, the above remarks equally apply here also. A direct remark on
Lord Diplock's approach is to be found in a passage:

Lord Diplock's approach, which arbitrarily confines identification to those officers who are countenanced by a corporation's formal constitution, is
perhaps less productive of uncertainty than the more functional approach (in relative terms) applied by the other members of the Court. However,
such an approach seems to rest on the patently false assumption that a corporation's constitution reflects the true nature of its managerial
functions. Not only is the assumption false but it also conduces to evasion.56

The author there seems to have been referring to the "technostructure" or the complex division of power and authority in a large corporation as described by
Prof. Galbraith57 and Gordon.58 Prof. Galbraith was of the view that all who bring specialized knowledge, talent or experience to group decision making are
the guiding intelligence the brain - of the enterprise and not the management.59
It was conceded in Tesco itself that this test may not be appropriate in all cases where the ambit of a corporation's liability is being considered60. Moreover,
the other Law Lords adopted different approach to the question of identification.60a However, since the decision of the House of Lords is not binding on the
Federal Court, it should have thought of adopting a suitable formula for identification from some other country or could have left the question open to be
decided by the Courts according to the nature of the charge and other relevant facts and circumstances of the case.
In America there seems to be no distinction between the vicarious and personal liability.61 Under the doctrine of respondent superior a corporation may be
held liable for the acts of any of its agents if an agent commits a crime within the scope of employment with the intent to benefit the corporation.61a
In Australia also it seems that the distinction between the two types of liabilities is blurred.62 There the employee's actions are considered as those of the
corporation if they may reasonably be regarded as within the scope of his employment.

The scope of employee's employment for this purpose is not necessarily limited to what he has express authority to do, for if it were, at least in
the case of junior employees, it frequently would be possible to exclude the operation of the criminal law by arguing that the employee had no
authority to commit an unlawful act.63

The scope of employment doctrine has enabled the Australian Courts in a number of cases to convict corporations for the action of quite junior
employees.63a
In New Zealand, the doctrine of identification is being followed, but the liability of the company is expanded nearer to the point of responsibility for acts of its
officers within the scope of their authority.64
In the context of English Law it was said that "what is needed is a statutory redefinition of the officers whose acts and mental states implicate the company".
This may be done on the basis of the proposed United States Federal Criminal Code, which includes amongst these officers "an executive officer or any other
agent in a position of comparable authority with respect to the formulation of corporate policy or the supervision in a managerial capacity of subordinate
employees"64a

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Crimes which cannot be Committed by Corporations
[1982]byCLJ
There are certain offences, which their225
very nature, cannot be committed by a corporation, as for example, bigamy or perjury. Perjury is an offence which
cannot be vicariously committed and bigamy is an offence which a limited company, not being a natural person, cannot commit vicariously or otherwise.65
However, even in some of these cases, it is not inconceivable that a corporation might be held liable as a secondary party.66
In addition, a corporation cannot commit a rape or66a a self administration of a noxious drug to procure an abortion.66b
The Supreme Court in P.P. v. Jelai Consessions (Pahang) Ltd.,67 seems to suggest that a corporation is incapable of committing a criminal trespass.
Apart from these offences there now appear to be no specific limitations upon the offences which a corporation may commit.
Responsibility of Directors and Officers
The general rule is that the officers, agents or servants who commit offences which can be attributed to the corporations for which they act are themselves
primarily liable criminally either as a joint principal in the first degree or as an abettor according to circumstances.68 A wide number of statutes nowadays
contain provisions whereby the directors and officers of the corporation are made liable for offences attributed to the corporations. Following the English
practice, this is done in Malaysia also in two forms: (1) Where the burden of proof lies on the prosecution and (2) Where the onus is on the directors, officers
to disprove complicity on their part. Example of the first form is to be found in, s. 20(1), Trade Descriptions Act 1972:

Where an offence under this Act which has been committed by a body corporate is proved to have been committed with the consent and
connivance of or to be attributable to any neglect on the part of any director, manager, secretary or other similar officer of the body corporate, or
any person who was purporting to act in any such capacity, he and the body corporate shall both be guilty of that offence and shall be punished
accordingly.

Example of second form is to be found in s. 28, Official Secrets Act 1972:

Where the person guilty of an offence under this Act is a company or corporation or a member or servant of a partnership or firm, every director or
officer of the company or corporation or every member of the partnership or firm (as the case may be), shall be guilty of the like offence unless he
proves that the act or omission constituting the offence took place without his knowledge, consent or connivance and that he exercised such
diligence to prevent the commission of the offence as he ought to have exercised.

The Companies Act 1965 also contains provisions for making directors or officers liable in case of corporate fault. Section 370(3) defines an "officer who is in
default" as any officer of the company or corporation who knowingly and wilfully - (a) is guilty of the offence; or (b) authorizes or permits the commission of the
offence.
A plain reading of such provisions, clearly indicates that in case of corporate crimes, the responsibility of the directors or officers of the company usually
involves mens rea. The word "consent" has been held in other context to imply a requirement of knowledge. So also, the word "connivance" has been
interpreted to involve knowledge and acquiescence, a "willing mind or corrupt acquiescence". What is negligence must depend on all the circumstances.69
The word 'knowingly' imports mens rea for proof of guilt70. In Barbour v. PP, it was observed that the word "wilfully" has not been defined but it has been said
to be same as "voluntarily". It occurs in s. 447A of the Penal Code in the phrase "wilfully and with intent to defraud". "Voluntarily" implies either actual intention
or knowledge or reason to believe. It was observed by Sharma J in Wolfgang Pzetzhodt v. PP72:

"Knowledge" is a very strong word. It implies a consciousness of facts. It is a word of greater import than "having reason to believe", and cannot in
the interpretation of statutes, and more particularly statutes which are penal in their consequences, be equated with suspicion or doubt.

It may be noted that the effect of such provisions has not yet been judicially considered in England.73 The import of mens rea in case of directors and officers,
it seems, lays a considerable stress on the rule of personal responsibility.
In Pillay v. P.P.,74 the appellant, who was the manager of a company was charged for failing to pay the provident fund contribution of an employee of the
company. The Court acquitted the appellant on the ground that he was only a supervisor of a branch. He was concerned only with sales and was not
responsible for the payment of salaries of employees in the company.
In the case of offences under the Companies Act, the Courts have been empowered by s. 354 to relieve any officer of a company from his liability, if it appears
to the Court that such officer has acted honestly and ought fairly be excused. The Courts are also empowered to grant anticipatory relief where an officer
apprehends that such proceedings will or may be brought against him.
Thus, under the existing law, both the corporation and its responsible agents may be convicted for the same offence. Corporate liability and individual criminal
liability are complimentary, not mutually exclusive.
Conclusion
It may be seen from the above discussion that corporations, in Malaysia, can now be held liable for many, and perhaps most offences. However, in case of
offences involving mens rea the test, for identification, propounded by the Federal Court lays considerable stress on the rule of corporate liability and needs a
re-consideration.
The rule that a corporation cannot be indictable for offences punishable with imprisonment or corporal punishment also needs rectification.

Endnotes:

1. The unsatisfactory nature of this law was recognized by the English Law Commission in its Working Paper No. 44 [1972].
2. Various justifications in support of imposing criminal liability on corporations are enumerated in W.B. Fisse, "Consumer Protection and
Corporate Criminal Responsibility". [1971] 4 Adel. LR 113 at pp. 115-118.
3. For an account of development of English law see Welsh, "The Criminal Liability of Corporations", [1946] 62 LQR 345; L.H. Leight, The
Criminal Liability of Corporations in English Law (London, 1969) Ch. 2-4.
See also Winn, "The Criminal Responsibility of Corporations", [1929] 3 Camb. LJ 398.
4. Some years later, further legislation on the same lines was introduced into the Federated Malay States, see L.A. Sheridan edited Malaya,
Singapore and the Borneo Territories, (London, 1961) p. 192.
This legislation is still the basis of the Law in Malaysia.
5. FMS Cap. 45. It may be noted here that Penal Codes in Malaysia were modelled on the basis of Indian Penal Code 1860.
6. Although this Ordinance is repealed by the Interpretation Act 1967, by virtue of s. 65(1) of the 1967 Act, it is still applicable to any written law to
which it applied before the 1967 Act.
7. This view is based on the observations made in relation to the English Interpretation Act 1889 in L.H. Leigh, op. cit., p. 23.
8. Ratanlal and Dhirajlal, The Law of Crimes (22nd Edn., 1971) p. 42, where a list of the sections of Indian Penal Code to which s. 11 do not apply
is given.
9. [1920] 7 SSLR 31, CA
10. Ibid. p. 35, see also PP. v. Jelai Concessions (Pahang) Ltd. [1931-32] FMSLR 255 at pp. 257 - 258
11. Ibid. p. 36
11a. The best account of these difficulties is to be found in Glanville Williams, "Criminal Law, The General Part". (2nd Edn., 1961), Ch. 22
12. In R. v. Harrison & Co. 8 TR 508, The Pharmaceutical Society v. The London and Provincial Supply Association, Limited [1880] 5 App. Cas
857

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13. [1902] 7 SSLR 31
14. [1931-32] FMSLR [1982]255 CLJ 225
15. Ibid. p. 258
16. [1973] MLJ Rep. 6
17. FMS Chap. 6. Hereinafter referred to as Cr. PC
18. See Queen Empress v. Wazir Jan [1887] ILR 10 All, 58; King v. Tustipada Manada AIR [1951] O. 284; State v. Govind Singh AIR 1962 MR 36.
Section 2 of the Penal Code provides that: Every person shall be liable to punishment under this code and not otherwise ...
19. R. v. ICR Haulage, Ltd. [1944] KB 551 at p. 554; Pharmaceutical Society v. London and Provincial Supply Association [1880] 5. App. Cas. 857
p. 869; R. v. Cory Bros. & Co. Ltd. [1927] 1 KB 810
20. AIR 1964 Bom. 195
20a. Corresponding section in Malaysia is s. 420, Penal Code
21. See also Girdharilal v. Lalchand AIR 1970 Raj. 145; Ananth Randhu v. Corporation of Calcutta AIR 1952 Cal. 759; Rameshwar Chotte Lal v.
Union of India, ILR [1969] DLI 1196
22. [1975] Cri. LJ 1148 (DLI). It may be noted that this case was under the Prevention of Food Adulteration Act 1954
23. [1962] MLJ 325
24. Observations to similar effect are to be found in Rex v. Lee Printing Co. Ltd. [1937] MLJ Rep. 6 at p. 8
24a. PP v. Kedah and Perlis Ferry Service Sdn. Bhd. [1978] 2 MLJ 221
25. See Jacob S. Ziegel, Studies in Canadian Company Law (Toronto, 1967) p. 29
26. Birmingham v. Gloucester Rly Co. [1842] 3 QB 223; Great North of England Rly. Co. [1846] 9 QB 315; Griffiths v. Studebakers Ltd. [1924] 1
KB 102; Mousell Bros. v. London and North Western Rly. Co. [1917] 2 KB 836
27. The correctness of this phrase has been disputed, see Brain Harris, "Crime and the Company" [1978] 142 JPN 65 at p. 67
28. [1917] 2 KB 836
29. Ibid. p. 844
30. See Law Commission (England), "Working Paper No. 44" [1972] para. 4. See also "Working Paper No. 43" proposition 4
31. [1965] 1 MLJ 35
32. Ibid. p. 36
33. Per Lord Tharlow, cited in Glanville Williams, Criminal Law: The General Part (2nd Edn. 1961) p. 856
34. [1944] KB 146
35. [1944] KB 551
36. [1944] 2 ALL ER 515
37. Sometimes it is termed as "primary liability" see, W.B. Fisse, "The Distinction between Primary and Vicarious Corporate Criminal Liability",
[1967] 41 ALJ p. 503., HAJ Ford, Principles of Company Law (2nd. Edn. 1978) p. 138
38. For a discussion of this theory see for example Gower, Modern Company Law (4th Edn. 1979 p. 205 et. seq.)
39. H.L. Bolton (Engineering) Co. Ltd. v. Graham and Sons [1956] 3 ALL ER 624 at p. 630 (CA)
40. [1972] AC 153 at p. 163 hereinafter referred to as "Tesco"
41. [1944] KB 144
42. [1944] KB 551
43. [1944] 2, ALL ER 515
44. Welsh, op. cit., p. 358
45. [1972] AC 153
45a. [1970] 2 MLJ 141
45b. (866) 17 QBD 132
45c. Supra, footnotes 35; 36; 37
46. [1973] 2 MLJ 77
47. Per Ong CJ at p. 79 per Gill FJ at p. 82 per Ong Hock Sim FJ at p. 82.
48. [1972] AC 154 at p. 199
48a. For an interesting analysis of the case see R.W.L. Howells, "A Blow Against Enterprise Liability", [1971], 34 MLR p. 676, I.A. Muir,
"Tescosupermarkets, Corporate Liability and Fault", [1973] 5 NZULR p. 257, W.B. Fisse, "Consumer Protection and Corporate Criminal
Responsibility - A Critique of Tescosupermarkets Ltd. v. Nattress", [1971] 4. Adel. LR 113 see also Gordon Borrie, "A Review of the Trade
Descriptions Act 1968", [1973] Crim. LR p. 662; Brenda Barrett, "Enterprise Liability and the Guilty Employee" [1971] 34 MLR 220 (This article
reviews decision of the Divisional Court)
49. R.W.L. Howells, op. cit., p. 678
50. I.A. Muir, op. cit., p. 366
51. A review of the Trade Descriptions Act [1975] para. 59, quoted in Gordon Borrie, op. cit., p. 664. See also the Report of the Chief Inspector of
Weights and Measures, Birmingham, 1971-72 quoted in Gordon Borrie, op. cit., p. 664
52. I.A. Muir, op. cit., p. 366
53. [1973] 2 MLJ 77. This decision was followed in PP v. Kedah and Perlis Ferry Service Sdn. Bhd. [1973] 2 MLJ 221
54. John Andrews, "Reform in the Law of Corporate Liability", [1973] Cri. LR p. 91 at p. 93; The notion of the board as tightly constituted mind of
the corporation seems, in many cases, outdated see Timberg "Corporate Facts and Fictions, Logical, Social and International Implications" [1946]
46 Col. L. Rev. 533
55. W.B. Fisse, "Consumer Protection and Corporate Criminal Responsibility". [1971] 4 Adel. LR 113 at p. 121
56. Galbraith, The New Industrial State, pp. 70 - 71
57. Gordon, Business Leadership in the Large Corporation [1966] pp. 76 - 80
58. Galbraith, op. cit., pp. 70 - 71
59. [1972] AC 153 at p. 200
59a. Note the view upon "alter ego" and the "brain" test in the Speeches of Lord Reid, Lord Morris of Borth-y-Gest. Viscount Dilhorne and Lord
Pearson. Particularly, Lord Reid at p. 158
60. The equation of primary and vicarious liability has been supported by Edgerton, "Corporate Criminal Responsibility" [1927] Yale, LJ 827

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60a. See "Development in the Law - Corporate Crime - Regulating Corporate Behaviour through Criminal Sanctions", [1979] 92. HLR 1229 at p.
1247 [1982] CLJ 225
61. See W.B. Fisse, "The Distinction Between Primary and Vicarious Corporate Criminal Liability". [1967] 41. ALJ 204 - 5; H.A.J. Ford, Principles
of Company Law (2nd Edn., 1978) p. 139
62. Colin Howard, Australian Criminal Law (3rd Edn. 1977) p. 390
62a. Ibid. p. 391
63. I.A. Muir, op. cit., p. 370
63a. Glanville Williams, Text Book of Criminal Law (London, 1978) p. 949
64. See R. v. ICR Haulage, Ltd. [1944] KB 551 at p. 554; DPP v. Kent and Sussex Contractors Ltd. [1944] KB 146
65. Cross and Jones, Introduction to Criminal Law (8th Edn. 1976) p. 100
65a. See State of Maharashtra v. Syndicate Transport Co. (P) Ltd., AIR 1964. 1964 Bom. 195, "Law Commission (English), Working Paper No.
44" [1972] paras. 8, 37 and 38
65b. Law Commission (English), Working Paper No. 44 para. 37
66. (1931-32) RMSLR 255 at p. 256
67. Glanville Williams, "Criminal Law, The General Part" (2nd Edn. 1961), p. 866
68. Ibid. p. 867
69. Yue Sang Cheong Sdn. Bhd. v. PP [1973] 2 MLJ 77 at p. 78; PP v. Teck Guan Co. Ltd. [1970] 2 MLJ 141
70. [1923] 4 FMSLR 264
71. [1970] 2 MLJ 195 at p. 197
72. Glanville Williams, "Criminal Law, The General Part" (2nd Edn. 1961) p. 867
73. [1965] 1 MLJ 35.

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