Section 477A IPC: Falsification of Accounts
Section 477A of the Indian Penal Code, 1860 dealt with wilful falsification of an employer's books, electronic records, papers, writings, valuable securities or accounts by a clerk, officer, servant, or a person employed or acting in that capacity, when done with intent to defraud.
Section 477A IPC - statutory provision
Falsification of accounts.
Whoever, being a clerk, officer or servant, or employed or acting in the capacity of a clerk, officer or servant, wilfully and with intent to defraud destroys, alters, mutilates or falsifies any book, electronic record, paper, writing, valuable security or account belonging to or in the possession of his employer, or received by him for or on behalf of his employer, or wilfully and with intent to defraud makes or abets the making of a false entry in, or omits or alters or abets the omission or alteration of any material particular from or in such book, electronic record, paper, writing, valuable security or account, is punishable under Section 477A.
Essential ingredients of Section 477A IPC
The statutory language required a particular relationship to the employer, a specified act affecting an account or record, and a fraudulent intent. The principal ingredients were:
- the accused must be a clerk, officer or servant, or be employed or acting in such capacity;
- the relevant book, electronic record, paper, writing, valuable security or account must belong to, be possessed by, or have been received for or on behalf of the employer;
- the accused must wilfully destroy, alter, mutilate or falsify the record, or make or abet a false entry, or omit or alter or abet the omission or alteration of a material particular; and
- the act must be done wilfully and with intent to defraud.
What does falsification of accounts cover?
Section 477A was broader than merely inserting a false figure in an account book. Its text covered destruction, alteration, mutilation and falsification, as well as making or abetting false entries and omitting or altering material particulars. The provision therefore addressed both affirmative false entries and fraudulent omissions or alterations in qualifying employer records.
Electronic records under Section 477A
The provision was amended by the Information Technology Act, 2000. With effect from 17 October 2000, the statutory list expressly included an electronic record along with a book, paper and writing. Accordingly, falsification within the section was not confined to traditional paper account books.
Intent to defraud
The act must have been wilful and accompanied by intent to defraud. An accidental accounting mistake, clerical error or inadvertent omission does not, merely because an account is inaccurate, satisfy the statutory language requiring wilfulness and fraudulent intent.
Explanation to Section 477A IPC
The Explanation provided that, in a charge under Section 477A, it was sufficient to allege a general intent to defraud. It was not necessary to name a particular person intended to be defrauded, specify a particular sum of money intended to be the subject of the fraud, or specify a particular day on which the offence was committed.
Punishment under Section 477A IPC
The offence was punishable with imprisonment of either description for a term which could extend to seven years, or with fine, or with both.
Nature of the offence under the pre-BNSS CrPC
| Particular | Pre-BNS / pre-BNSS position |
|---|---|
| Provision | Section 477A, Indian Penal Code, 1860 |
| Offence | Falsification of accounts |
| Punishment | Imprisonment up to seven years, or fine, or both |
| Cognizability | Non-cognizable |
| Bail | Bailable |
| Trial | Magistrate of the first class |
Legislative history
Section 477A was added to the Indian Penal Code by Act 3 of 1895. The Information Technology Act, 2000 later substituted the words covering "book, electronic record, paper, writing" for the earlier reference to "book, paper, writing", with effect from 17 October 2000.
Key point
The core of Section 477A was not simply that an account or record was incorrect. The prosecution had to bring the conduct within the specified employment relationship and record-related acts, together with the statutory requirement that the conduct be wilful and carried out with intent to defraud.