What is Economic Offence Wing (EOW)?

Khushboo Asrani

One of the Nodal agencies of State Government, generally established under Criminal Investigation Department, is Economic Offence Wing. Economic Offence wing as the name suggests- deals with offences which are of economic and financial nature.

The term Economic Offences is very vast in nature and very inclusive. Now the question arises that what offences are typically considered by Economic Offence Wing for investigation? Is there any threshold? What is its composition? What powers does it hold? And these questions go on and on till we go in the depth of the Economic Offence Wing.

What is Economic Offence?

Can we call Economic Offence as corruption? The answer is a straight NO. The term Economic Offence is much wider than it seems. Corruption can be included in the term Economic Offence as its type, but it cannot be said as its equivalent.

Now again our question is left unanswered if Economic Offence is not corruption then what it is?

Economic Offence covers diversified range of offences starting from frauds, tax evasion, financial crimes committed by banks, money laundering, illicit capital heavens, crimes related to securities, chit funds, bribery by public officials, traffic of influence, cheating, embezzlement, etc.

A divested or considerable social and economic damaged can be caused by these economic crimes.

That is because the possibility of it affecting state treasurer and public at large apart from domestic entities and institutions is high. And the matter of fact is that this damage is not calculated damage, and no one can tell how many people were affected by most of the occurred crimes.

There are certain vivid features of Economic offences which differentiates it from other kind of offences:

• Generally, elements like breach of trust, cheating, fraud, deception are involved.
• Before the commission/omission of the act it needs to have actus reus and mens rea.
• Generally, no physical harm is caused by commission of the offence.
• Generally, mens rea behind the commission of Economic Offence is material profit or preventing material loss or causing material loss to some third party.
• Generally, committed by a person or an entity, privileged enough to have access to the required resources or involved in such type of economic and business activity.

List of Economic Offences

A table listing various economic offences, the relevant legislation and the enforcing authorities in India given below:

*list of Economic Offences source link

What is Economic Offence Wing

Economic Offence Wing is purely a matter of State Government. It is established under the State Government’s Act, it is a sub department of CID i.e Crime Investigation Department which is subdivision department at Indian State Police.

Around 1970’s Economic Offence Wing was established in every State as with the hike of Economic Offences the need for special cell was realised.

Economic Offence Wing is also widely known as EOW in abbreviated form.

Following functions are performed by Economic Offence Wing:

• EOW run investigation into the cases of fraud, misrepresentation, cheating of Government money involving various departments, organisation and institutions of Government.
• State Government with its discretion can allot its agency to EOW with cases concerning any private entity say private person, company or any corporation, depending on the level of an offence conducted.
• EOW also see into the cases of Government revenue and if in any case of loss, it alarms Government to take appropriate and required follow up actions.
• Cases involving NBFC’s, Chit fun scams, fake stamp papers, multilevel marketing schemes, Ponzi schemes, etc are also investigated by EOW.
• EOW is only permitted to be involved, investigate and enquire into complaints and FIR’s which are allotted to the agency by the Home Department.
• EOW is one of the nodal agencies of the State Government which is entrusted to share information with Central Economic Intelligence Bureau (CEIB).
• EOW represents State Government at the Center in vivid forms for coordination, information sharing and for prevention of economic offences.
• Section 8(1)(H) of Right to Information Act, 2005 covers EOW and is exempted from disclosure of information which is expected is expected to impede the procedure of investigation, prosecution or apprehension of offenders if it got disclosed.

Common acts of Crime which are generally dealt by Economic Offence Wing:

• Corruption
• Fraud
• Cheating
• Invoice Manipulation
• Smuggling
• Cyber Crimes
• Bogus Imports
• Credit Card Frauds
• Counterfeiting
• Money Laundering

Following are the acts that are dealt by Economic Offence Wing:

• Section 255 of the Indian Penal Code, 1860 – Counterfeiting Government Stamp
• Section 405 of the Indian Penal Code, 1860 – Criminal Breach of Trust
• Section 406 of the Indian Penal Code, 1860 – Punishment for criminal breach of trust
• Section 415 of the Indian Penal Code, 1860 – Cheating
• Section 417 of the Indian Penal Code, 1860 – Punishment for cheating
• Section 420 of the Indian Penal Code, 1860 – Cheating and dishonestly inducing delivery of property
• Section 463 of the Indian Penal Code, 1860 – Forgery
• Section 465 of the Indian Penal Code, 1860 – Punishment for forgery
• Section 467 of the Indian Penal Code, 1860 – Forgery of valuable security, will, etc.,
• Section 477 of the Indian Penal Code, 1860 – Falsification of Accounts
• Section 264 of the Indian Penal Code, 1860 – Fraudulent use of false instrument for weighing
• Section 265 of the Indian Penal Code, 1860 – Fraudulent use of false weight or measure
• Section 378 of the Indian Penal Code, 1860 – Theft
• Section 379 of the Indian Penal Code, 1860 – Punishment for theft
• Section 381 of the Indian Penal Code, 1860 – Theft by clerk or servant of property in possession of master
• Section 383 of the Indian Penal Code, 1860 – Extortion
• Section 384 of the Indian Penal Code, 1860 – Punishment for extortion
• Section 7 of the Prevention of Corruption Act, 1988 – Public servant taking gratification other than legal remuneration in respect of an official act
• Section 13 of the Prevention of Corruption Act, 1988 – Criminal misconduct by a public servant
• Section 9 of the Central Excise Act, 1944 – Offences and Penalties
• Section 135 of the Customs Act, 1962
• Section 276-C of the Income Tax Act, 1961 – Wilful attempt to evade tax, etc.,
• Criminal Law (Amendment) Ordinance, 1944
• Section 452 of the Code of Criminal Procedure, 1973 – Order for disposal of property at the conclusion of a trial
• Smugglers & Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976
• Narcotic Drugs & Psychotropic Substances Act, 1985

Constitution

The constitution/organisation structure of Economic Offence wing fully depends upon the State Government and CID of that state, however, there is a general structure which is usually a common factor of Economic Offence Wing of every State.

• Director General of Police heads the Economic Offence Wing.
• Generally, every District in the State has a dedicated Economic Offence Wing of its own.
• There is one Headquarter in every State which is usually situated in the Capital of the State.
• There might be special cells dedicated to certain matters as per the requirement of the State which is headed by Deputy Inspector General of Police who also appoints Superintendent of Police.

Generally, the constitution of Economic Offence Wing consists of following officials:

• Director General of Police (DGP)
• Assistant Director General of Police (ADGP)
• Deputy Inspector General of Police (DIGP)
• Superintendent of Police (SP)
• Legal Advisors
• Other needed Special Officers
• Sergeants/Hawaldars

Functions of Officers of Economic Offence Wing:

Functions and Responsibilities of DGP:

Director General of Police (DGP) is the head of Economic Offence Wing and manages the working of the wing. DGP oversees all the important decisions in the Wing and is expected to take responsibility of all the acts of Economic Offence Wing.

Functions and Responsibilities of ADGP:

EOW functions under the general supervision and guidance of Assistant Director General of Police (ADGP). All cases which hold public importance shall be referred to ADGP.

ADGP shall be kept informed regarding all the important matters and wherever it is considered necessary his advice/instructions must be obtained. Formulation of guidelines for investigation is one of the foremost responsibilities of ADGP.

Functions and Responsibilities of DGI:

Deputy Inspector General of Police (DIGP) will exercise full control and authority over EOW and will be responsible for its work, efficiency and discipline. Following are the important functions of DGI, EOW:

• Supervision and control over the functioning of EOW.
• Supervision of important cases enquires and complaints.
• Keep the DGP and ADGP informed of all-important matters including (but not limited to) registration and disposal of cases, enquires and complaints.
• Progress report in all cases pending investigation or trial should be submitted to DGI of Police, EOW once in a month.
• Monitoring of all Special Report (SR) cases involving economic offences.
• All papers concerning EOW going to ADGP or DGP should pass through him.

Functions and Responsibilities of SP:

Superintendent of Police (SP), EOW shall work under DGIP. He will be responsible for:

• Control over the work, efficiency and discipline of units of EOW.
• Supervision and control of the work of the units of EOW.
• Supervision of cases, enquires and complaints of such units.
• All papers concerning EOW going to the DGI, ADGP or DGP must pass through SP.
• Execution and direction of the Special Drives of EOW, particularly organising simultaneous raids, surprise checks, etc. & achievement of the targets.
• Monthly progress report in all cases must be submitted to DIG/ADGP.
• Replies to Parliament Questions & Legislative Assembly Questions relating to cases, enquiry and complaints of EOW shall be handled by SP.
• SP will communicate to media regarding important cases of EOW. He will also release Press Notes in EOW cases. He will ensure that any information in respect of any case of EOW given to the press goes through him and not by any subordinate officer.
• SP will keep DIGP, ADGP and DGP informed of all-important matters including (but not limited to) registration and disposal of cases, enquires and complaints.

Functions and Responsibilities of Legal Advisor (in the rank of Police Post or Addl. Police Post):

• Legal Advisor working in EOW will be responsible for legal advice to SP, DIG, ADGP as well as other work as detailed below.
• He will comment on investigation reports, scrutinise the charge sheets to be filled in the courts and prepare drafts sanction orders for prosecution.
• He will conduct the prosecution in court in EOW cases that may be assigned to him by SP and submit court diaries in respect of them.
• He will prepare and forward conviction, acquittal and discharge reports in the prescribed form.
• He will take steps to obtain certified copies of the judgements, as may be necessary without any delay. In case where appeal or revision is to be recommended, he will prepare a self-contained note giving the reasons for acquittal or discharge and the grounds on which appeal or revision is considered necessary.
• He will be responsible for seeing the special counsel, if any engaged in EOW cases are fully and properly briefed.
• He will make sure that warrant is obtained for the arrest of absconding accused persons and that necessary action is taken under section 82 and 83 Cr.P.C.
• He should be available to discuss cases with investigating officer and to give them guidance and advice on legal points arising during the course of investigation.
• He will keep the SP informed of all-important matters concerning the proceedings in the court.
• He will identify the common defect of investigation and organise/conduct remedial program.
• He may scrutinise complaints received, when asked to do so. When so request he may vet draft FIRs when these are to be filled by police officers.

Jurisdiction

Economic Offence Wing will have state wide Jurisdiction (of that particular state). In due course Economic Offence Wing may be notified as a Police Station. However, till Economic Offence Wing is notified as a Police Station, cases of Economic Offence Wing will be registered in CID Police Station.

(This is the general statement of jurisdiction which is commonly used to define the jurisdiction of Economic Offence wing, the statement of jurisdiction might differ slightly as different states have different needs)

Pecuniary Jurisdiction:

The minimum amount to file a case in Economic Offence Wing (EOW) is Rs. 50 Lakh i.e EOW will deal with cases having pecuniary value of minimum Rs. 50 Lakh or more. Initially this amount was Rs. 10 Lakh then in 2013 it was made up to Rs. 25 Lakh and now it is changed to Rs. 50 Lakh.

However, this amount may differ from state to state as EOW is governed by the State laws also different states have different needs and thus this amount may be altered. For example, the minimum amount to file a case in Mumbai is Rs. 6cr whereas UT Chandigarh has the basic amount limit of Rs. 50 Lakh only to file a case in EOW.

Major cases

Ajit Pawar (MSCB Scam)

Ajit Pawar is a Deputy Chief Minister of the State of Maharashtra, with 69 others is supposed to be involved in the Maharashtra State Cooperative Bank (MSCB) Scam.

The Enforcement Director (ED) has filed and applied in the Special Court and opposed the closure report filed my Mumbai Police’s Economic Offence Wing and pointed out the large loans to the Sugar Mills which were written off by MSCB.

The Enforcement Director in his application also cited a Bombay High Court Order which stated found material evidence disclosing ‘cognisable offence’ he also cited the bids placed by Ajit Pawer’s family to acquire sugar mills auctioned by MSCB while he was its Director and the bidder who acquired the sugar mill was financed by Pawar’s family and later it was transferred to a company owned by Pawar’s maternal uncle (Rajendra Gadge) on lease.

Likewise, ED cited many more instance involving money laundering which pointed out the involvement of Ajit Pawar in MSCB Scam. High Court ordered EOW to have further investigation on the matter.

*Link Source of the case

Anubhav Group of Companies

A criminal case was registered against the Chairman and Director of Anubhav Group of Companies in Chennai City Police, CCB Cr .No 1431/1998 U/s.120 (b), 409, 420 r/w.34 IPC on 13.10.1998. Subsequently, this case was transferred to EOW-II Chennai on 22.01.2000 for further investigation.

The Honourable High Court of Madras in its order dated: 02.11.1999 appointed Provisional Liquidator and Administrator Tr.Ravindran to take over the management. Again, on the orders of the Honourable High Court of Madras the company was brought under the ambit of liquidation on 26.03.2000, 09.06.2000 and 21.06.2000 and Administrator continued thereafter.

*Link source of the case

Land India Real Estate Private Limited & Land India Assets Limited

This case was registered on the report of complaint who is an investor, against M/s Land India Real Estate Private Limited and M/s Land India Assets Limited for unauthorized collection of public deposits on different lucrative schemes of the company.

During investigation of the case by EOW large numbers of investors were examined and relevant documents were seized on their production. Besides 10 nos. of Bank Accounts of the company as well as of its MD/Directors having a balance of Rs. 8,12,258/- have been frozen and landed properties to the extent of approximately Ac 8.00 Dec identified.

Accused Managing Director and two other Directors have been arrested and forwarded to Court. Based on proposal submitted by Economic Offences Wing, Bhubaneswar, Government have issued Ad-Interim Order U/s 3 of Odisha Protection of Interests of Depositors (in Financial Establishments) Act, 2011, attaching the movable and immovable properties of the above company, its Managing Director and other Directors.

*Link source of the case

Sarala Realcon Private Limited

This case was registered on the report of complaint against M/s Sarala Realcon Private Limited for cheating the complainant and others by not providing land as per agreement. During investigation of the case large numbers of investors were examined and relevant documents have been seized. Besides, four numbers of vehicles (Fortuner/ BMW/ Pajero/ Scorpio), cash of Rs. 3, 12,500/- and several bank accounts of the company and of its MD/ Directors have been seized/ frozen.

The MD of the company and its two other directors were arrested and forwarded to court. Other immovable properties acquired by the company out of the said public deposit have been identified for the purpose of attaching the same under the provision of OPID Act.

*Link source of the case

GNS Nidhi Ltd & Devi Gold House

The accused Karunakaran and others originally opened the Devi Gold House as the firm and collected deposits from the public. Subsequently he opened another company registered in the name of G.N.S.Nithi Ltd. and diverted the amount collected as deposits from Devi Gold House to G.N.S.Nithi Ltd. and acquired assets.

Since he was not able to refund the deposit amount along with interest to the depositors and defaulted, a case in 968/96 u/s 409, 420 & 506(ii) IPC r/w 3 to 6 PCMCS Act against Devi Gold House & 969/96 u/s 409, 420,120(b) & 506(ii) IPC r/w 3 to 6 PCMCS Act against G.N.S.Nithi Ltd. were registered and investigated.

*Link source of the case

Vista Management Services Limited

This case was registered on the report of complaint against M/s Vista Management Services Limited for unauthorized collection of public deposit on different lucrative schemes of the company.

During investigation of the case large numbers of investors were examined and relevant documents have been seized. Besides, six numbers of vehicles (tipper/ terax loader/ Bolero /Innova) and bank accounts standing in the name of the company and of its MD/ Directors have been seized/ frozen.

Five accused persons including the MD and two Directors of the company have been arrested and forwarded to court. Further, landed properties acquired in the names of company and of its MD/Directors have also been identified for the purpose of attachment under the provision of OPID Act.

*Link source of the case