Dr.

Ram Manohar Lohiya National Law

University, Lucknow

ACADEMIC SESSION: 2019-20

White Collar Crimes
The Criminology of White Collar Crimes in India

SUBMITTED TO: SUBMITTED BY:

Mr. Malay Pandey Akanksha Singh
Assistant Professor (Law) B.A. LLB (Hons)
9th Semester
Roll No. - 10
Contents
The Criminology of White Collar Crimes in India.............................................................................1
Introduction.......................................................................................................................................3
Meaning and Definition of White Collar Crimes...............................................................................4
Sutherland’s Definition of White Collar Crime.................................................................................5
Criticism of Sutherland’s Views on White Collar Crime...................................................................5
Classification of White Collar Crimes...............................................................................................6
Contributing Factors of White Collar Crimes....................................................................................8
White Collar Crime in Certain Profession.........................................................................................8
Laws and Acts preventing White Collar Crime..................................................................................9
Conclusion.......................................................................................................................................14
 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 th
3
Ahmad Siddiques’s Criminology and Penology( 16 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 th
6
Prof. N.V. Paranjape, Criminology, Penology , Victimology (17 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 causing most serious social as well as economic harm.12

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)
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 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
18
Prof. N.V. Paranjape, Criminology, Penology , Victimology (17th Edition, Central Law Publication ,
2017)
19
pg. no148.
Aaashish Ahuja , Analysis of White Collar Crime
https://blog.ipleaders.in/analysis-white-collar-crimes-india/
20
(10 October 2019).
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)
23
( 19811) 133 ITR 239
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

24
Prof. N.V. Paranjape, Criminology, Penology , Victimology (17th Edition, Central Law Publication ,
2017) pg. no152.
25
26
(1998) 1 SCC 226
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 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.

29
Ahmad Siddiques’s Criminology and Penology( 16th Edition , Eastern Book Company, 2011) pg. no 445
30
Dr. Lily Srivastava, Law and Medicine, Universal Law Publishing Co. , 2010, pg. no.44
 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.

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 laundering 33. 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
31
SCC 208
32
AIR 1976 , SC 2428
33
Snangeet Kedia’s Economic and Commercial Laws (June2011 , Pooja Law Publishing Co.)pg.no 155
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
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 offender(s).
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).
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.