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Research Dimensions

Volume 2 , Issue 8 / Oct 2014

Impact Factor 1.4992


Ajay Ranga

Assistant Professor (Law), University Institute of Legal Studies,

Panjab University, Chandigarh.


The term economic offences or crimes are widely used to denote the number of
crimes which are of economic and financial nature. Prof. Albert Morris in the paper
titled as "Criminal Capitalists" presented by Edwin C.Hill in 1872 drawn towards this
newer form of crimes or offences in 1934. Then concept was used as the term 'White
Collar crimes' was coined by the Criminologist Edwin H. Sutherland to explain the
crimes committed by the respectable persons and the persons with high social status. The
present complex structure demands the need for the equal and fair justice to all
irrespective of the social and economic status of the person. Economic crimes are the
activities of crime which arise out of the legal businesses involving the violation of the
interests of state or the society in general.


Economic Offences , socio-economic crimes committed , socio-economic class.


Economic Offences are included in the separate category of criminal offences. Such offences not
only victimize the individuals with economic and financial losses but may also have adverse impacts on the
national economy. Economic offences covers the crimes such as counterfeiting of currency, fraud,
financial scams, money laundering, etc. which cause a serious concern for the Nation's security and the
governance. On the other hand the social offences are the criminal activities arising from the violation of the
social laws and interests of the state and public in general. The Kinds of the socio-economic crimes
committed in the society/ nation depends upon the economic & social laws and the economic & social
system of that country. The great varieties of the crimes committed make it impossible to draw one
strategy/ law to combat such offences. The effort is made to develop individual strategies to define the
crime and make the prosecution possible (J ANDENAES, 1978)1.
Indian economy has witnessed huge transformation towards industrialization, development of
science and technology, growth of commerce and trade. The high standards of ethics and morality faced
deterioration in favour of power, money, materials in almost all areas of economic activities. Such
circumstances made the economic, social and political environment of the country more conducive for the
huge growth of the above mentioned form of criminality, where, all sorts of anti-social activities like frauds,
adulteration of food stuffs, corruption, misappropriation, misrepresentations and manipulations are carried
on a large scale and that too by the people belonging to all strata's of society including the upper and middle
socio-economic class in the course of their economic activities- commerce, trade, industry and almost all
other professions as well.
The effective check on the socio-economic offences by the anti-social elements is must to
preserve the ethical and moral values, to promote the welfare of the nation and the society. But some
dishonest and notorious people found a way to commit the crimes in their respectable professions and


personal reputation. There are many factors which contribute towards the rise in number and cases of socio-
economic offences, like bribery, corruption, humiliation of women, nepotism and favouratism in public
and private occupations and that too among the persons with high authority and reputation, Trafficking in
licenses, Trafficking in immoral activities, embezzlement, misappropriation, manipulation and cheatings
relating to public property, violation of contractual obligations and others. There are rising number and
cases of new offences emerging such as money laundering, smuggling, foreign exchange regulation
violations, under and over invoicing, hoarding, profiteering, share pushing, black marketing, tax evasion
and theft, adulteration, drugs peddling, etc.
Sanathan Committee prepared the list of socio-economic offences. It provided the knowledge of
offences under this head but not comprehensively. The socio-economic offences are categorized into
following as proposed by the committee:

?Offences calculated to prevent or obstruct the economic development of the country and endanger its
economic health;
?Evasion and avoidance of taxes lawfully imposed;
?Misuse of their position by public servants in making of contracts and disposal of public property, issue of
licenses and permits and similar other matters;
?Delivery by individuals and industrial and commercial undertakings of goods not in accordance with
agreed specifications in fulfillment of contracts entered into with public authorities;
?Profiteer-ing, black marketing and hoarding;
?Adulteration of food stuffs and drugs;
?Theft and misappropriation of public property and funds; and
?Trafficking in licenses and permits etc.

After Santhanam Committee , the Government of India appointed the another committee-
Wanchoo Committee in 1970 to pay attention on the area of black money which was being accumulated
through the violation of norms and rules of various legislation- foreign exchange regulation and the
activities of commercial frauds- black marketing and hoarding etc. Many worthy suggestions were made
by the committee for to combat the Socio-Economic Offences and led the formation of many new laws in
the Indian legislatures like the Control of Foreign Exchange and Prevention of Smuggling Act 1974; The
Foreign Exchange Regulation Act 1973; The Smuggling and Foreign Exchange, Criminal Procedure Code
1973 and Manipulators Act 1976;etc. The efforts were made to make the punishments more stringent and
hard to punish the socio-economic offenders and discourage the resort to such crimes in future.

Some of the acts enacted to tackle the socio economic crimes by the Indian legislation are:
The Prevention of Corruption Act.
The Prevention of Food Adulteration Act.
The Prevention of Immoral Traffic (Amendment) Act, 1986.
The Drugs and Cosmetics Act.
The Essential Commodities (Amendment) Act.
The Dowry Prohibition Act.
The Narcotic Drugs Psychotropic Substances Act, 1985.
The Standard of Weights and Measures Act.
The Customs Act.
The Drug (Control) Act.
The Income Tax Act,
The Anti-Corruption Laws (Amendment) Act,
The Indian Penal Code, et

Socio Economic Offences- 47th Report of Law Commission : The report summarized the socio
economic offences as those crimes for which the motive is avarice or rapaciousness. The crime is non-
emotional, the victim is usually the state, section of public. The main element of crime is that it harms the
society. The act is willful and deliberate and the mode of operation is fraud rather than the force. The aim is
to preserve the property, wealth and health of the members, preserve national resources and social interest
by enforcing laws.

The act includes following as the socio economic offences harming the economy and the society:
Offences calculated to prevent or obstruct the economic development of the country and endanger its
economic health

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Evasion of taxes.
Misuse of position by public servants.
Offences in the nature of breaches of contracts, resulting in the delivery of goods not according to
?Hoarding and Black-marketing.
?Adulteration of food and drugs.
?Theft and Misappropriation of public property and funds
?Trafficking in licenses, permits, etc.

Table1: Overview of Economic Crimes in India and Relevant Legislations

Source: Legislative Measures to deal with Economic Crimes in India, Animesh Bharti


There are various views about the 'socio-economic offences' from the aspects of civil law, criminal
law, the torts and morality. The father of criminology- Lambroso, believed that, criminals had different

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physical characteristics of inferior nature. Criminals having atavistic qualities were categorized as the
"born criminals" the other group known were insane criminals and the third are Criminaloids, the persons
who commit crimes or vicious acts only under certain circumstances, otherwise they are normal persons
with normal behavior. The crimes committed by the persons of the third category characterize the class of
the offenders called as white-collar criminals. It can be said that such offences are committed in presence of
moral insensibility. The key drivers or the motivators of the crime are money, recognition, power, success,
satisfaction and consideration. The hunger to get the want fulfilled pushes the persons to behave insensibly
and commit crimes to get the easy way. These are not anti-social persons otherwise. They practice to
behave as the good, respected and honest man of the society but they actually are mean and selfish and ready
to do wrong for their personal benefits. They gather the support of his people and victimize the weak and
innocent people- consumers, public, relatives for attaining their motive.

Sutherland defined white-collar crimes based upon three types of misbehaviors and crimes as state:
1) Any crime committed by a person of high status (whether or not it is done in the course of their
occupational activities) is represented by the 1st circle. 2) Those crimes committed on behalf of
organizations (by people of any status) is shown in the 2nd circle. 3) Those crimes committed against
organizations, whether or not these are carried out by people working in the same organization, another
organization, or none at all. (

Every occupation, profession and trade involves the following of certain rules, policies, norms,
practices, values, ethics and laws. These govern, control and regulate the activities of all involved in that
particular profession, trade and occupation. The disrespect, violation and abandoning of these rules, laws,
etc. invites the penalty, punishment and prosecution within the scope of white-collar crime. The criminal
occupational deviation is the subject matter of the white-collar crimes.
"White-collar crime, one may, describe it as committed in the course of one's occupation by a
member of the upper class of society, A manufacturer of drugs who deliberately supplies substandard drugs
is, for example, a white collar criminal. So is if a big corporation guilty of fraudulent evasion of tax. A
person who illegally smuggles (for his personal use) costly television sets, is not a white-collar criminal in
the above sense, there being no connection between his occupation and the crime committed by him. Nor is
the pensioner who submits a false return of income. But all of them are guilty of socio-economic offences
which affect the health or material welfare of the community as a whole, and not merely the individual
victim. Similarly, economic offences are those which affect the country's economy and not merely the
wealth of an individual victim. (47th Report, Law Commission)


Socio economic offences includes to know the extent to which the practice is justified, to know
the extent the judicial practice of mens rea into statutes dealing with such offences and knowledge of most
appropriate and justified response to such offences. Also, there are number of issues involved in socio
economic offences- vicarious liability, situational liability in statutory offences etc.
When mens rea has been expressly or impliedly (including when it is not expressly excluded) in a
statute, courts cannot read such a requirement into the language of the statute. If it is deemed to be a social
welfare legislation which incidentally penalises, court cannot read mens rea (which is a criminal law
requirement) into the provision. If it is deemed to be a criminal statute, courts still cannot read into the
words of a statute a mens rea requirement, as a criminal statute is required to be constructed ideally. A way
out if this anomaly might be insertion of a Social and Economic Offences Code, as suggested by Malimath
committee and looking for alternative methods of punishment that can effectively increase the stigma
against the offenders. (
There are number of offences in the Indian Penal Code (IPC), for which there is no element of
mens rea required. Such offences mainly include national interest but even then it is observed that the courts
apply mens rea in such cases as well.
In a developing country like India, constraints of economic resources have necessitated the
imposition of certain social controls to promote planned development with the enforcements of the
provisions of licensing, controls, regulation, laws and policies etc. In certain cases it is must to impose the
provisions strictly and impose the liabilities to the offenders for disobeying and violation of the standards of
behaviour. However the imposition of such strictness in all the cases irrespective of its individuality is
questioned on grounds of justification. The criminalization of productive social and economic conduct is
seen from the national and societal interest.
Mens rea requirement is a common law legacy. However, there are instances in common law
where the doctrine is dispensed with (like public nuisance contempt of court and libel). This was justified

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because (i) it was difficult to prove mens rea in some cases, (ii) as they were penalised under social welfare
legislations, a purposive construction was required to further the objectives of the act. (iii) Punishment in
these cases is usually0 light and (iv) they are offences which are in the nature of mala prohibita and not mala
in se. (

Socio economic offences found the place in Law with the rise in number of the crimes of newer
form and origin. The development of industrial and commercial activities led the transformation of the
economic and social motives of the people and the rising desire of money, power, success, etc. These
offences and offenders of socio economic offences have been explained and characterized from different
aspects. The article also discussed the application of mens rea into such offences.

1.Akshat Khare, Doctrinal Report On White Collar Crimes (2010-11)
2.Conceptual and theoretical framework of Socio Economic Offences, Retrieved from
4. Law Commission (1966), 29th Report on Proposal to include certain Social and Economic Offences in
the Indian Penal Code, Government of India, Ministry of Law and Justice.
5. Law Commission (1966), 47th Report on The trial and punishment of Social and Economic Offences
Government of India, Ministry of Law and Justice.
6.Sharma, B.K, Nagpal, V., Khandewal, K.K. (2010) Treatise on Economic and Social Offences,
Allahbad Law Agency, Faridabad

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