THE ICFAI UNIVERSITY DEHRADUN

ICFAI LAW SCHOOL

WHTE COLLAR CRIMES ASSIGNMENT

ASSIGNMENT ON THE CRIMINOLOGY OF WHITE COLLAR

CRIMES IN INDIA

SUBMITTED TO:
MS. SNIGDHA KURIYAL
ASST. PROFESSOR
ICFAI LAW SCHOOL

SUBMITTED BY:
ADITYA KUMAR
5TH YEAR BBALLB
SECTION A
16FLICDDN01006
INTRODUCTION

White Collar Crimes are the crimes committed by a person of high social status during the
course of his or her occupation. It is a type of crime which is committed by highly
professional persons or persons involves in business sector (either directly or
indirectly).White Collar Crime is an illegal act done in order to achieve an illegal objective
by the violent means in order to gain money or wrongful gains1 or to avoid payment of legal
dues or to retain money or property either moveable or immoveable in a wrongful manner. It
can also be termed as socio- economic offences.

White Collar Crimes are rapidly increasing now days in our country with the advancement
of commercial and IT sectors. The recent development in the field of technology has given
dimensions to crime related to professions. The speedy economic growth through
industrialization, globalization and growing influences of market forces on economy has
open huge possibilities for white collar crimes in India.2 White Collar Crime is pervasive in
almost all profession like legal, medical, engineering and educational institutions. White
Collar Crime injures the society at large scale in terms of economic growth and
development as certain professions offer lucrative opportunities for criminal acts and
unethical practices. It is more dangerous to society than other ordinary crime because its
end result is financial gain for the perpetrator and cause huge financial losses to our
economy. The financial loss to society from white collar crime is probably greater than
financial loss from burglaries, robberies and larcenies committed by persons of lower socio-
economic class.3 In case of Ram Narayana Poply v C.B.I4.,Supreme Court has expressed
concern for adverse effects of white collar crime and held that economic offenders should
not be allowed to ruin the economy of the country and its growth and development and they
should be sternly dealt with.5 The term “White Collar Crime” was defined by sociologist
Edwin Sutherland in 1939, whose work penetrating in the area of white collar crime focused
the attention of criminologists on its demoralizing effect on the total crime picture.6

White Collar Crime is not a phenomenon but an emerging concept in our country. Thus,

1
Section 23 of Indian Penal Code(45 of 1860)
2
Girjesh Shukla , Criminology , Crime Causation , Sentencing and Rehabilitation of Victims( Lexis Nexis), pg. no 101
3
Ahmad Siddiques’s Criminology and Penology( 16th Edition , Eastern Book Company, 2011) pg. no 439
4
A.I.R. 2003 SC 2748
5
Prof. N.V. Paranjape, Criminology, Penology , Victimology (17th Edition, Central Law Publication , 2017), pg.no 160
6
Prof. N.V. Paranjape, Criminology, Penology , Victimology (17th Edition, Central Law Publication, 2017)
Indian Penal Code, 18607 has already codified some of the offences related to white collar
crime in a comprehensive manner. The term “White Collar Crime” has not been defined
anywhere in the Indian Penal Code. But the dimension of the crime is so wide that certain
offences under Indian Penal Code is closely linked with white collar crime such as bribery8,
corruption , food adulteration , forgery9 , fraud , cheating10 , extortion11 etc. The Codified
criminal law has also provided the punishment for the offences that comes under the
dimensions of white collar crime or socio- economic offences.

MEANING AND DEFINITION OF WHITE COLLAR CRIMES

In simple words, a crime committed by the convicts employed in white collar jobs is called
as white collar crimes and person who commits white collar crimes are called as white collar
criminals.

White Collar Crime belongs to upper socio economic class of people or elite class of society
who violates the legal provisions of the criminal law while providing their professional
services to society at large for example, misrepresentation through fraudulent
advertisement in order to increase the percentage of sales, infringement of copyrights and
trademarks etc.

Thus, the definition of white collar crime includes following attributes:-

• It is a socio- economic offence

• which committed by a person of high respectability in the society, is of high

status,in course of his or her profession or occupation, and

• it is usually called as breach of trust.

The nature of White Collar is so grievous in nature that the injury or damage caused as the
result of them is so widely diffused in the society at large scale that the gravity in regard to
individual victim is almost negligible. Therefore, its nature is such that it overlaps the
multiple type of violation of criminal code, and it also includes moral or ethical violation of
7
45 of 1860
8
Section 171B of Indian Penal Code( 45 of 1860)
9
Section 463 of Indian Penal Code( 45 of 1860)
10
Section 415 of Indian Penal Code ( 45 0f 1860)
11
Section 383 of Indian Penal Code( 45 of 1860)
causing most serious social as well as economic harm.12

12
Girjesh Shukla, Criminology , Crime Causation , Sentencing and Rehabilitation of Victims( Lexis Nexis), pg. no 99
SUTHERLAND’S DEFINITION OF WHITE COLLAR CRIME
Professor Sutherland presented his concept of “white collar crime” in his address to the
American Sociological Society in 1949.13 According to him, when a person of respectability
and high social- status in course of his legitimate occupation commits an act which is
approximately a crime, it is a white collar crime.14 But, later on he added a refinement to
his own definition and gave a modified definition of white collar crime defining white
collar criminals as “a person of upper socio – economic class who violates the criminal law
in the course of occupational or professional activities”15

According to Sutherland, white collar crimes are increasing due to three main reasons:-

• the judges, legislators and commission – members belong to the same social class to
which white collar crime belong’
• the trend is of not punishing the offenders,
• unorganized and in effective resentment of exploitation by white collar criminals.16
CRITICISM OF SUTHERLAND’S VIEWS ON WHITE COLLAR CRIME

Sutherland’ definition of white collar crime has evoked criticism from many jurists.
Coleman and Moynihan has criticized and pointed out that there is no accurate and definite
criteria for determining persons who can be defined as ‘person of respectability and status’.
They also have said that the element of “high status” as used in the definition of white
collar crime leads to confusion.
And, thus the work of Sutherland doesn’t give the crystal clear definition of white collar
crime. Even some critics have suggested that such crimes should be called as occupational
crimes instead of white collar crimes because the element in the definition of white collar
crime is not socio- economic status of individuals , but rather the type of crime and the
circumstances of its commission.17

13
Ahmad Siddiques’s Criminology and Penology( 16th Edition , Eastern Book Company, 2011) pg. no 438
14
Dr. S.S. Srivastava, Criminology, Criminal Administration (3th Edition, Central Law Agency, 2007) pg. no 40
15
Ahmad Siddiques’s Criminology and Penology( 16th Edition , Eastern Book Company, 2011) pg. no 438
16
Dr. S.S. Srivastava, Criminology, Criminal Administration (3th Edition, Central Law Agency, 2007) pg. no 41
17
Prof. N.V. Paranjape, Criminology, Penology , Victimology (17th Edition, Central Law Publication , 2017) pg. no 148
CLASSIFICATION OF WHITE COLLAR CRIMES

Ad hoc crimes:-They are also called as personal crimes as in this category , the offender
pursues in his own individual objective having no face to face contact with the victim. For
example: - Hacking on computers, credit- card frauds, tax evasion etc.

Breach of trust :- In this type of crime breach of faith bestowed by an individual or

institution on perpetrator.18
Insider Trading: -When some uses the confidential information to trade in shares of
publicly held corporations.19
Bank Fraud : - It means to engage in such activities which is taken place in order to
defraud a bank or using illegal means to obtain assets held by financial or non - financial
institution.
Bribery: -Bribery means offering money, goods or any kind of gift to some government
officials in order to have control over his actions or making them to work as per the choice
of giver in an illegal manner.
Computer Fraud : Computer frauds are very common these days . It has increased with
the advancement in the technology. It can also include cyber- crimes. Computer frauds in
simple words can be defined as, such frauds which involve hacking or stealing information
of some other persons20 without his or her permission.
Embezzlement: - Embezzlement means when a person illegally obtains someone’s
property by actual or threatened force or coercion. It can also be called as criminal breach
of trust.21
Extortion22:-When someone illegally obtains someone’s property by means of threatening
or obtains any property by unlawful means or in a dishonest manner.

Tax Evasion : - The complex tax law structure in India have provided sufficient scope for
the tax payers to evade from payable taxes. Tax evasion is common between persons of
high class such as traders, businessman, lawyers, doctors, businessmen, engineers etc. In

18
Prof. N.V. Paranjape, Criminology, Penology , Victimology (17th Edition, Central Law Publication , 2017) pg. no148.
19
Aaashish Ahuja , Analysis of White Collar Crime
https://blog.ipleaders.in/analysis-white-collar-crimes-india/ (10 October 2019).
20
Aaashish Ahuja , Analysis of White Collar Crime
https://blog.ipleaders.in/analysis-white-collar-crimes-india/ (10 October 2019).
21
Section 405 of Indian Penal Code( 45 of 1860)
22
Section 383 Indian Penal Code( 45 of 1860)
case of R. K. Garg v. Union of India23 Supreme Court upheld that the validity of the
Special Bearer Bonds(Immunities and Exemption)Act, 1981, observed that the Acts was
not intended to encourage tax evasion in future and condone such evasion committed in past
but real legal intent of the act is to launch a nation –wide search to unearth wealth
encouraging small incentive to those who declare their disclosed cash.24

Corruption: -It is an dishonest or fraudulent conduct by those in power, typically and

highly involved bribery. Corruption is an illegal act and his controlled by Prevention of
Corruption Act. The Supreme Court in Vineet Narayan v. Union of India25, observed that
agency having disclosed a prime facie case against the public servant. the corruption cases
against the public servant were often delayed the investigation

In case of Subramanium Swamy v. Dr. Man Mohan Singh,26 Supreme Court reiterated that
the time –limit of three months for grant of government sanction under Section 19 of the
Prevention of Corruption Act, 1988 for the prosecution of public servant alleged of
corruption charges , must be strictly followed.

Further in case of Jaylalitha v. Union of India27, Supreme Court observed that corruption
erodes the moral fabric of society and is detrimental to national economy. Misuse and
abuse of power by persons occupying high position in the Government has reached
alarming dimensions and it has tarnished the image of the country.28

23
( 19811) 133 ITR 239
24
Prof. N.V. Paranjape, Criminology, Penology , Victimology (17th Edition, Central Law Publication , 2017) pg. no152.
25
(1998) 1 SCC 226
26
AIR 2012 SC 1185
27
(1999) 5 SCC 138.
28
Prof. N.V. Paranjape, Criminology, Penology, Victimology (17th Edition, Central Law Publication , 2017) pg. no160.
CONTRIBUTING FACTORS OF WHITE COLLAR CRIMES

The changing socio- economic concept of the society coupled with an increase in wealth
and prosperity has furnished opportunity for such crimes in India .The modern scientific
and technological developments and the monopolistic trends in trade and business world
have led to enormous increase in white collar crimes. In the past few decades there has been
unprecedented growth in a new variety of computer dominated white collar crime which
are commonly called ad cyber- crimes. Cyber- crimes have became a matter of global
concern and a challenge for the law enforcement agencies at a global level. The main
reasons of white collar crime are:-

• Legislators and the law implementers belong to the same group or class to which
the occupational criminals belongs.
• Less effort from law and administrations, favorable laws,less impact on individuals.
• The rise of white- collar criminality in many countries has coincided with the
progress made in those countries in the economic and industrial fields.29
It is very shocking and hardening to know that the process of white collar crime are divided
into aspects – (i) direct and (ii) indirect and both of these two are connected with production
and distribution of wealth.

White Collar Crime in Certain Profession

Some of profession involves the technical expertise and skills which provide enough and
sufficient opportunities for the scope of white – collar criminality. These professions
include medical field, engineering, legal practice and private educational institutions.

Medical Field : - In this field white collar crime is generally committed by persons
belonging to medical profession include issuance of false medical certificate , helping
illegal abortions , selling drugs and medicine to patients or chemists.
There is a difference between medical negligence and medical crimes. Medical
Professional accountable for their service given to their patient in due course of their duty.
The Supreme Court has redefined medical negligence to include overdose of medicines, not

29
Ahmad Siddiques’s Criminology and Penology( 16th Edition , Eastern Book Company, 2011) pg. no 445
informing patients about the side effects of drugs, not taking extra care in case of disease
having high- morality rate and hospitals not providing amenities that are fundamental for
patients.30 Dilatory tactics is used by the members of this fraternity while treating their
patients with aim to extracting huge sums of money from them.

Engineering:- Some white collar crimes in field of engineering includes using of wrong
and cheap materials with sub – standard for the constructions of buildings, roads, canals ,
dams etc. resulting the danger for the safety of public at a large scale.

Educational Institution:- The governing bodies of educational institution are also now
involved in white collar crime. Cases on Educational Institution have increased. The
activities involved in white collar crimes in this area includes :- false recruitment , wrong
and misleading prospectus, termination of services , problems in pay – scale , unfair
transfer in government schools and university etc. In case of Nidhi Kain v Madhya
Pradesh,31 Supreme Court using unfair means with the admission exams will amount to
disqualification of exam and principle of natural justice “audi altream” must be followed.
In case of Dr. G. Sarana v. University of Lucknow32, the concept of upper age limit and
criteria was challenged by the petitioner in the court of law.

Legal Profession:-The white collar crime in the field of law is fairly wide spread. The
legal professional ethics are widely committed by members of legal fraternity. The common
legal and professional violation committed by lawyers and legal advisors are advising
organized criminals, aiding in false claims and fabricating false evidence.

The incidence of white - collar crime are also very high among some other professionals
like advertisers, property advisors, Chartered Accountant and Company Secretary and
management consultants etc.

30
Dr. Lily Srivastava, Law and Medicine, Universal Law Publishing Co. , 2010, pg. no.44
31
SCC 208
32
AIR 1976 , SC 2428
LAWS AND ACTS PREVENTING WHITE COLLAR CRIME
Prevention of Money Laundering Act, 2002: - In India , black money is generated in
large scale from last few decades from various socio-economic crimes and this black
money is converted into white money so the economic offenders can easily get escape of
his or her criminal liability and that money can easily be used in the economy with the
notice of the government authorities . The process of conversion of tainted money into
untainted money is called the money laundering. Thus, the main purpose and object of the
mentioned Act, is to prevent money laundering.
The concept of money laundering is an international concept and menace and for the same
reason, United Nations adopted a political declaration in June 1998 and asked its members
to enact the national legislations for the prevention of money laundering33. The present Act
has been passed to implement the resolution of United Nations. The main aim of the
guidelines is-
• To safeguard banks from acting as a chain in money laundering activities or in the
process of money laundering.
• To help banks to know more about the clients and customer and to keep a check on
them thus to protect them from the losses.

Prevention of Corruption Act, 1988:- In context with white collar crime, The Prevention
of Corruption Act, 1988 is very important Corruption erodes the authority of state and
promotes crime. The issue of corruption is very dangerous to nation. The Santhanam
Committee Report of 1964 defines the problem of corruption as a complex problem having
its roots and ramification in the society itself as a whole. The Act came into force because
of increasing cases of bribery and corruption among the public authorities. The Act
consolidated the provisions of IPC, CrPc and Criminal Act, 1952. The act has provided the
definition of “public duty”, “public authority”, “public servant”. The provided definitions
are very important in determining the criminal liability of a public officer.

Companies Act , 2013 :- The act also deals with the white collar crimes. The Companies
Act, 2013 contains special provisions for offences , penalties and their Compounding in

33
Snangeet Kedia’s Economic and Commercial Laws (June2011 , Pooja Law Publishing Co.)pg.no 155
many of its sections. The provisions of Companies Act , 2013 also provides provisions to
deal with effective penalty, mechanism, speedy trials according to the gravity of offences
committed under the Act. The Companies Act , 2013 in Sec. 447 provides list of offences
and punishment for fraud where- as Sec. 212 deals with investigation into the affairs of the
Company by Serious Fraud Investigation Office.
The Act states that notwithstanding anything in CrPc, 1973, every offence under the act
expect to offence mentioned under sub- section (6) of Sec 212 shall be deemed to be non-
cognizable offence.
Section 435- 438 of the Act provides establishment of special courts for the purpose of
providing speedy trials for offence committed which is punishable under the Act. Sec.447
of the Act provides punishment for fraud and Sec 448 provides punishment for producing
or providing any false statement. Thus, the act tried to cover every aspect to deal with the
white collar crime or corporate criminal liability of the corporate houses.

Essential Commodity Act, 1955 :-It is an another act, which is enacted with an legislative
intent to prevent the socio – economic offences or white collar crime. The main object of
this Act is to control the production, supply and the distribution of certain commodities in
the market. The act tries to protect the interest of general public in order to secure equitable
distribution of essential commodity at a reasonable distribution. The act itself gives the
definition of essential commodity. The items and commodity declared as “essential
commodity” under the Act are reviewed from time to time in the light of liberalized
economic policies in the consultation and particularly with regard to their production,
demand and supply.34
Section 6 of the Act imposes penalties and punishment for cognizable offences. The
punishment impose under section 6 of the Act is non –bailable offence. The Act provides
that mens rea is an essential element of the offence punishable under the Act. The Act
expressly that no Civil Court can grant any injunction or make any order for any other relief
against the Central or State Government or any public officer, in respect of any act done, or
purporting to be done.35Thus, the Act does not give any privilege to high authorities or to
high officers of the Government. The act intended to impose criminal liability upon the

34
Economic and Commercial laws The Institute of Company Secretary of India, June 2017 (pg.no489).
35
Economic and Commercial laws, The Institute of Company Secretary of India, June 201(pg.no504).
offender(s).
Industrial (Development and Regulation ) Act, 1951: - As earlier mentioned, the
increasing rate of white collar crime has started with era of industrialization in India. With
the growth of industrial sector at high rate and on sustained basis forced the Govt. of India
to issue industrial policies in order to avoid any kind of malpractices in this sector. Thus, the
Industrial Policies Resolution of 1948 provided a legal support and aid to enact the
Industrial (Development and Regulation) Act, 1951.
The main objective of the act is to empower the Govt. to take necessary steps for the
growth and development of the industry. It also empowers the Govt. to take necessary steps
to –

• regulate the pattern and direction of industrial development, to control the activities,

• performance of industrial knowledge in the public interest.

The acts also give power to Central Govt. to take over the industrial undertakings without
going for any kind of investigation under the certain circumstances. Sec. 24 of the Act
imposes penalties for the contravention or attempt to contravene or abetment of the
contravention, by any person.

Sec 24A of the Act provides that if any person when required by the Act or by an order
publish or made under the Act, makes or furnishes any information which is false or
misleading and he knows or has a reasonable cause to believe that the produced
information or statement is false or misleading shall be punished under the Act with the
fine of Rs 2000 or imprisonment of three months or both. Misleading information may
include the misrepresentation of accounts, records or any declaration or any document.
Thus, the policies made under the act and a provision tries to prevent the occurrence of
white collar crime at a very high rate in the country.

Information Technology Act , 2002:- In order to tackle with computer- related crimes ,
Information Technology Act , 2000 has enacted to provide legal recognition to
authentication of information exchanged on social media websites or any E- Commerce
networking sites. The act contains certain provisions that deal with white collar crimes.
Some of the section also deals with the awareness of crimes. The Act in its Section 43 and
44 of Information Technology provides penalty for offences committed as prescribed by
the Act. Some of the following such offences are as follows:-
 • Unauthorized copying of an extract form any kind of the data
• Unauthorized access and downloading files illegally.
• Causing any damage to computer system or computer networking system.
• Providing any kind of assistance in any form to any unauthorized person who can
access to the other person’s computer without his or her permission
.

Fugitive Economic Offender’s Bill, 2017: - Recent case of Vijay Mallia has forced
Government and Legislature to make a law on economic offenders who commits white
collar crime in India and flee to other country in order to escape from their criminal
liability and jurisdiction of Indian Courts. The Bill has been referred to the Standing
Committee of Parliament. The draft of Bill provides provision which empowers the Govt.
to confiscate any property of economic offender in India who flees to other country. The
proposed bill will be applicable to all those economic offenders who had a criminal liability
of Rs 100 Crore or more. The Bill provides a list of offences in its Scheduled List which
can be termed as “economic offences”. The bill provides provisions to a establish Special
Court under The Prevention of Money Laundering Act, 2002 to declare a person as fugitive
economic offender. The key feature of the Bill is that it provides the definition of fugitive
of economic offenders and talks about the procedure of Special Court and the applicability
of the Act. The Bill also provides that the Central Government may enter into any treaty
with any nation through any means inter alia devising a mechanism to extradite the
Fugitive Economic Offender of India which is present in their country or allowing the
Govt. or any respective authority to confiscate any foreign property of such offender.
CONCLUSION

The advancement of science and technology in last few decades has created a new form of
crime which is known as “white collar crime”. It is a socio- economic offence due to
which economy suffers a lot. The person who commits these types of crime is called socio-
economic offenders. The term white collar is not defined in criminal law but although
certain form of white collar crime is defined in Indian Penal Code. These forms of crime
have closed linked with white collar crime. The provision of white collar crime also deals
with the punishment and fine associated with the nature of crime. In past years many scam
has been witnessed by India in form of white collar crimes.

Govt. of India has taken many steps to prevent this type of crime in India. The act such as
Prevention of Corruption Act, 1988, Prevention of Money Laundering Act, 2002, Essential
Commodity Act,1955 helps the Govt. to penalize such offences. The recent bill pending in
Parliament, The Economic Offender’s Bill, 2017, is an initiative of NDA Govt. to have
jurisdiction on economic offenders to flee off to other country to escape from their criminal
liability. The above mentioned acts (or any other related act which prevents white collar
crimes) along with legal provisions of Indian Penal Code, 1860 should be harmoniously
interpreted in such a strict manner to control problem of white collar crimes in India.
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