The collection, preservation and analysis of information is existential to catch fraudsters and cyber criminals. In addition to paper files, digital data present in an individual’s company computer, laptop, mobile or any other handheld device can uncover a complex matrix of fraud using digital and computer forensics. This information can subsequently be presented before the court during civil or criminal litigation proceedings.
In India, companies may approach either law enforcement officials or external specialists to conduct ‘search and seizure’ operations to collect data. Typically, this would entail searching the alleged fraudster’s office or desk for evidence, without compromising the sanctity of the data so it can be presented during legal proceedings, if required. The right to conduct a ‘search and seizure’ of an individual or a location is an imperative component of any investigation.
Enforcement agencies such as the Central Bureau of Investigation (CBI), Economic Offences Wing (EOW), Enforcement Directorate (ED) and others are legally empowered to conduct search and seizure operations under applicable regulations. On the other hand, external forensic specialists or investigators can be appointed by the Board or management or Directors, giving them the directive to conduct an investigation on behalf of the company against errant employees. For external specialists, it is critical to take adequate precautionary measures to ensure that work is carried out within the boundaries of compliance, there are no violations and the operation is concluded successfully without any roadblocks. The external agency has to ensure that there are audit rights, and such search and seizure is covered under the audit rights specially in case of visiting any third parties, else there is no legal locus to visit such a third party.
In cases of fraud, embezzlement or misappropriation, an employee may possess documentary evidence, which they may not want to disclose initially. In such a scenario, search and seizure may be exercised without offering any prior indication to the individual. Some of the steps that can be undertaken to for external specialists to circumvent potential issues, allegations of violation, and ensure the discovery is presentable as per the law include:
- Ensuring the presence of an authorized company representative during the entire search and seizure process
- Informing the purpose (on entering the premises) where the search and seizure has to be conducted. In addition, a proactive offer to personally search the team conducting the search before commencing it can also be made.
- Physically documenting the list of all the articles or records, with comprehensive details of the premises where they were located
- All documents, articles or records found should be listed with a serial number, subsequently verified and initialled by the authorized company representative present
- Digitally recording the entire process of the search and seizure procedure, covering entry into the premises, proactive offer to search the team, presence and details of documents discovered and time of entry and exit
- An offer for a personal search once again should be made when exiting the premises
Further compliance should be ensured with the provisions of Section 100 and Section 102 of The Code of Criminal Procedure to ensure sanctity of the evidence uncovered and for the search and seizure to be legally sound. These steps are also imperative to avoid any allegations of ‘criminal trespassing’ punishable under Section 441 and ‘theft’ punishable under Section 379 of the Indian Penal Code. To explain,
Criminal trespass means, ‘whoever enters into or upon property in possession of another with intent to commit an offence or to intimidate, insult or annoy any person in possession of such property, or having lawfully entered and unlawfully remains there.’ Intention is an element as ‘mens rea’ is important for an act to be criminal. Punishment for the same is provided under Section 447 IPC, which includes imprisonment for up to three months; fine up to INR 500 or both.
‘Theft’ implies, ‘whoever commits theft shall be punished with imprisonment of either description for a term, which may extend to three years, or with fine, or with both.’
In today’s times of rising fraud and increased scrutiny, it is important that companies take quick action to uncover perpetrators, gather evidence ethically and within applicable boundaries of law.
(Devendra Pardeshi, Director, Fraud Investigation & Dispute Services has co-authored the above post)