Imagine walking through an art gallery, where each painting has a tale to tell. Among the masterpieces hangs a charming wooden horse, seemingly innocent and inviting. But unknown to the curators, it hides deceitful intentions. Like the legendary Trojan horse, this deceptive artwork conceals a clever fraudster in disguise.
In the magical world of art, where authenticity is as precious as gold leaf, such a “Trojan horse” can cause chaos. It may leave you wondering – How many fraudulent art pieces are out there, silently circulating in the market?
On that note, on March 13, 2024, ED (Enforcement Directorate) officials busted a significant art fraud scheme. On raiding six locations, they exposed a sophisticated network involved in selling counterfeit artworks, forging authenticity certificates, and laundering money.
The case that led to this raid was that of a renowned investment banker, Puneet Bhatia, who allegedly sold fraudulent Manjit Bawa and F N Souza paintings by Rajesh Rajpal (Art Dealer) and Vishwang Desai (Solicitor), for a whopping Rs 17.9 crore.
Although recent, this was not something that left the art watchers startled, when S H Raza, an 86-year-old artist, visited a show of his paintings at the Dhoomimal Gallery in Delhi on a Saturday in 2009, he was shocked to learn that several of the pieces on display were sham.
Artworks by “national treasure” Jamini Roy and others, such as M.F. Husain, F.N. Souza, Jahangir Sabavala, S.H. Raza, N.S. Bendre, and Ram Kumar, were discovered to be part of the cartel.
The process of identifying such fraudulent paintings is quite tedious, making this vast faux market largely unregulated. However, once these fraudulent activities are uncovered, a series of legal implications ensue, aiming to bring the perpetrators to justice and restore trust in the art market.
Legal Implications Of The Discovered Art Fraud
Laws regarding Art in India are derived from a variety of pre-existing frameworks concerning – Media Laws, Copyright Laws, and other multiple relatable provisions derived from the Contract Act, IPC, and now BNS.
When it comes to disputes surrounding fraudulent artworks and the establishment of their authenticity, one such deliberate point of concern is determining its chain of title.
The Antiquities and Art Treasures Act 1972 (The Antiquities Act), as per section 2(1)(a) includes within its ambit regulations concerning various articles, such as paintings, books, statues, sculptures, manuscripts, objects, and heritage sites.
Transferring the title of an antiquity or art item through auction or private sale requires compliance with Section 14 of the Antiquities Act, which mandates registration. When ownership is transferred by purchase, gift, or licence, the individual adopting the artwork or antiquities must carefully examine all factors that indicate its nature and provenance, including authenticity, source, origin, registration, and licencing. According to the Antiquities Act, failure to obtain the required licence or registration may lead to criminal prosecution.
In India’s artistic legacy, the old Buddha statue on exhibit at the High Commission of India in London is a noteworthy example of title claims made and accepted. In this case, an assertion was made against the UK government and the arbitration award was in favour of the Indian government.
Other Regulations That Cover The Legal Complexities Around Art Fraud Include:
• Indian Contract Act, 1872
– Section 14 – A contract of sale must be freely entered into and cannot be influenced by coercion, undue influence, fraud, misrepresentation, or error for it to be deemed legitimate.
– As a result, art galleries are accountable for making sure that there is no fraud or deception in the artwork sale agreement.
– Most art houses, to safeguard themselves, include a disclaimer in their sales contracts indicating they are merely acting as agents for the artwork’s sellers and that the buyer and seller are the parties to the transaction, among other things, shielding them from any responsibility for fakes.
– The Contract Act contains the legislation governing principal-agent interactions.
– Generally speaking, an agent is not accountable for actions taken on the principal’s behalf or in situations when the principal approves of the action. But over time, this liability has changed and now depends on the specifics of each case, such as when the agent misleads the parties.
• Bhartiya Nyaya Sanhita, 2023
– Section 111 criminalizes forgery under economic offence categorising it as an unlawful activity whilst Section 336 adequately describes forgery as – anyone who creates a false document or electronic record, with the intent to cause harm, support a false claim, induce someone to part with property, or commit fraud, is committing forgery.
– So, when a dealer or art house sells forged artwork to defraud someone or enter into a contract, they are committing forgery, which can result in up to two years of imprisonment, a fine, or both.
– Cheating is also a punishable offence under the BNS thus, if a dealer or seller cheats a buyer by selling a forged artwork as genuine, they can face up to three years in prison, a fine, or both. If cheating results in the deceived person delivering property to a third party, the original cheater can be punished with up to seven years of imprisonment and a fine.
– Further, art dealers, auction houses, or galleries involved in such selling fake artwork and cheating buyers can be made criminally liable for conspiracy and breach of trust.
• Consumer Protection Act, 2019 (COPRA)
– The buyers of the artwork are to be deemed as consumers under the purview of this legislation, entitling them to protection against any defect or deficiency in the artwork. The terms are broadened covering within them any fault, imperfection, shortcoming, negligence, or even omission concerning the object at sale. Thus, a buyer who purchases art through the services of an art dealer, gallery, auction house, or online art platform, will have a right to recourse under the COPRA.
Further, the export-import of such artworks is governed by the Antiquities Act, 1972, and Foreign Trade (Development and Regulation) Act 1992, where the Antiquities Act only permits the central government or bodies authorized by it to export antiquities and the latter act permits only those who have received an export-import code number from the director general or an officer designated by the director general to export or import property. Penalties for not obliging with these export-import licencing requirements have been mentioned under the Antiquities Act (Section 25 ) along with the Customs Act of 1962 (Sections 111 , 113 , 114 – confiscation and monetary compensation).
Conclusion
In the intricate world of art, where authenticity reigns supreme, these stringent penalties serve as a stark reminder of the legal risks inherent in fraudulent activities. Implementing laws or even coming up with specific legislation on Art, that tackles the complexities of creative media and related issues will open the door to a more thorough legal interaction with art in India. The art market must preserve its integrity to reflect the authenticity of the treasures it works to safeguard, as the stakes are high and the repercussions dire.
Authors: Mahima Gupta, Nishi Jain & Viha Mehta