DR.

RAM MANOHAR LOHIYA NATIONAL

LAW UNIVERSITY LUCKNOW

CYBER LAW
Final Draft
‘INTERNET – A PLATFORM FOR WHITE-COLLAR
CRIMES’

SUBMITTED TO: - SUBMITTED BY: -

Dr. AMAN DEEP SINGH AKASH PRAKHAR VERMA

ASSISTANT PROFESSOR (LAW) ROLL NO. - 17

B.A. LL.B. (Hons.)

7th SEMESTER

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 ACKNOWLEDGEMENT

This paper is a result of dedicated effort, so primarily I would thank the

Supreme Soul as without his kind presence the project could not have
been complete. Then I would like to thank my guide Dr. Aman Deep Singh
for supporting me in making this project and providing me with his
valuable guidance. Further, I would like to thank my parents and friends
who have helped me with their valuable suggestion and guidance in various
phases of completion of the project. Last but not the least I would like to
thank my batchmates who have helped me a lot.

Akash Prakhar Verma

Roll no. 17

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 TABLE OF CONTENT

Introduction ................................................................................................................................ 4

Definition for white collar crimes .............................................................................................. 4

Criticism against Sunderland’s definition .................................................................................. 5

Types of white-collar crimes ..................................................................................................... 7

Causes of white-collar crimes .................................................................................................... 7

Effects of white-collar crime ..................................................................................................... 7

Myths of white-collar crimes ..................................................................................................... 8

White collar crimes in twentieth century ................................................................................... 8

Different types of cyber crimes................................................................................................ 11

Reasons for cybercrimes: ......................................................................................................... 12

Provisions under Information Technology Act, 2000.............................................................. 12

Drawbacks under IT act, 2000 ................................................................................................. 13

Measures to curb the cyber crime ............................................................................................ 14

Preventive measures................................................................................................................. 15

Conclusion ............................................................................................................................... 16

Bibiliography ........................................................................................................................... 17

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 INTRODUCTION
A generic definition of a crime would be an act that is in violation of the applicable
laws. Generally, the victims of these generic crimes are the individuals. But of late the concept
of White-Collar Crimes has taken boom. It somewhat relates to the crimes against the society
at large.

For the first time, this thought evolved to the famous Criminologist and Sociologist Edwin H.
Sutherland, in the year 1939, who popularised the term “white collar crimes”.

Sutherland point out that besides the traditional crimes such as assault, robbery, dacoity,
murder, rape, kidnapping and other acts involving violence, there are certain anti-social
activities which the persons of upper strata carry on in course of their occupation or business.
These activities for a long time were accepted as a part of usual business tactics necessary for
a shrewd professional or business. Thus, any complaint against such tactics often went
unheeded and unpunished.

DEFINITION FOR WHITE COLLAR CRIMES

Some of the criminologist and penologist have given following definitions of white-collar
crime as

A. Sutherland: “White collar crime is a crime committed by a person of upper socio-

economic class, who violates criminal law in the course of his occupation and
professional activities”.
B. Paul Tappan- “White collar crime is a special type of solitary professional criminality.
It involves real violation of criminal law systematically or repeated by business,
professional and clerical workers in addition to their occupation.”
C. Sir Walter Reckless- “White collar crime represents the offences of businessmen who
are in position to determine the policies and activities of business”.

These white-collar crimes by their very nature are such that the injury or damage caused as a
result of them is so widely diffused in the large body of society that their gravity in regard to
individual victim is almost negligible. It is probably for this reason that till late these crimes
did not attract much attention as they do not carry with them any loss of social status of the

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offender even if he is caught or detected. There is yet another reason for white collar criminals
escaping prosecution1.

Lord Acton once said, that “power tends to corrupt and absolute power tends to corrupt
absolutely”.

The main motive behind these white-collar crimes is personal gain. Individuals or groups may
use and abuse their positions within a company to hide or steal money. White-collar crime can
be committed by one individual or it can involve a number of individuals in a large corporation
who deceive investors2.

CRITICISM AGAINST SUNDERLAND’S DEFINITION

Sutherland’s definitions of white-collar crime have evoked criticism from certain quarters.
Coleman and Moynihan pointed out that the lack of definite criteria of determining of white-
collar crime most controversial. It seems likely that what Sutherland meant by this is absence
from convictions for crimes other than white collar crimes. The element of ‘high social status’
as used in the definition also leads to confusion: Clearly it has far narrower meaning that is
given to that term in everyday usage. Sutherland himself did not stick to this meaning and
included thefts and frauds committed by middle or even lower middle-class workers in course
of their employment or work. Some critics have suggested that such crimes should have been
called as ‘occupational crimes’ instead of being termed as ‘white collar crime’. It is further
argued that in fact the important element in the definition of white-collar crime and the
circumstances of its commission. These usually include pilfering, false accounting, bribery,
embezzlement etc. Tax-evasion is not an authentic white-collar crime, at least in terms of
Sutherland’s definition because although associated with work, it is not committed in the
course of an occupation. Some critics further allege that such violations come within the
purview of the Special Commissions, Tribunals and Boards instead of normal criminal justice
administrators. Therefore, strictly speaking, they cannot result into conviction of Commenting
on this aspect of the issue, Tappan observes that treating persons committing white collar crime
as criminals would mean deviating from legal definition of crime inasmuch as personal value
considerations of the administrator would gain primary in place of precision and clarity of legal
provisions in deciding such case. Sutherland, however, justifies the special procedure of trial

1
Akshat Khare- Doctrinal Report On “White Collar Crimes”,
2
G. Nagarajan; Dr. J. Khaja Sheriff, - White Collar Crimes In India, International Journal Of Social Science &
Interdisciplinary Research Vol.1 Issue 9, September 2012

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for white collar criminals by administrative agencies on the ground that it would protect the
offender from the stigma of criminal prosecution.

Another criticism quite often advanced Sutherland’s definition of white-collar crime is that it
includes even those violations of law which are not committed in course of occupation or
profession and these violations do not necessarily belong to upper strata of society or the so-
called ‘prestigious groups. For example, tax evasion is not committed by persons belonging to
middle or even lower strata of society.

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 TYPES OF WHITE-COLLAR CRIMES
The following are the types of white-collar crimes that have been classified over a period of
time3:

• Food and drug adulteration

• Tax evasion
• Illegal and corrupt practices of public servant
• Illegal practice to earn black money
• Hoarding and black marketing of essential goods
• Political Corruption

CAUSES OF WHITE-COLLAR CRIMES4

1. Corruption
2. White collar criminals in India belong to very rich or high family. They are more
powerful than traditional criminals. Therefore, criminal law is hardly made applicable
on them due to their high social status.
3. The rapid pace of social changes and the technical complications of business attacks
are aggravating social disorganization in India. Such changes are encouraging unethical
practice in the country.
4. A majority of trade and business in India are running on capitalistic pattern. Such
pattern basis on the acquisition of maximum material resources by particular individual
or individuals. It is regarded not only as legitimate but also essential. Such practice
results in the large-scale exploitation of public by such businessmen and in the course
of their occupational activities.
5. White collar criminals are rarely punished.

EFFECTS OF WHITE-COLLAR CRIME

• Its economic effect or the financial loss to society is more serious than ordinary
economic crimes committed by persons of the lower socio-economic class.

3
Sanjay S. Bang – “A Critical Study of White Collar Crimes in India”
4
ibid

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 • While ordinary crimes cause some inconvenience to the victims and serious crimes
cause general community disturbance, white-collar crimes spread feelings of distress,
lower public morale, and produce social disorganization.
• Though a very large number of white-collar crimes are committed in society yet only a
few white-collar offenders are prosecuted and punished. A large number go Scott free
because of their economic and social influence. Even the criminal courts are lenient
towards persons accused of white-collar crimes.
• Protection to society against white-collar crime is too meagre because efforts to make
the criminal law more effective in dealing with white-collar crime are often blocked by
vested interests.
• Absence of adequate knowledge regarding white-collar crime contributes to a distortion
of the criminological theories of causation since criminologists to a great extent have
restricted their data to cases dealt with in criminal courts and prisons.

MYTHS OF WHITE-COLLAR CRIMES

In the issue of Psychology today, there was colour related to the myths of white-collar crime.
It shall include:

• White-collared crimes are nonviolent—since white-collared crime is usually

characterized as non-violent, many are prone to this myth. But criminals in general have
a sense of entitlement and need for control.
• White-collar criminals are highly paid
• White-collar criminals are otherwise upstanding citizens—about 40% of white collared
criminals have a record.
• It's all about cash

WHITE COLLAR CRIMES IN TWENTIETH CENTURY

The recent developments in information technology, particularly during the closing years of
the twentieth century, have added new dimensions to white collar criminality.

The internet in India is growing rapidly. It has given rise to new opportunities in every field
we can think of – be it entertainment, business, sports or education. There are two sides to a
coin. Internet also has its own disadvantages. One of the major disadvantages is Cybercrime –
illegal activity committed on the internet. There has been unprecedented growth of a new

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variety of computer dominated white collar crimes which are commonly called as cybercrimes.
The internet, along with its advantages, has also exposed us to security risks that come with
connecting to a large network. Computers today are being misused for illegal activities like e-
mail espionage, spams, software piracy and so on, which invade our privacy and offend our
senses.

There is a saying that "The modern thief can steal more with a computer than with a gun.
Tomorrow's terrorist may be able to do more damage with a keyboard than with a bomb".

These cybercrimes have become a matter of global concern and a challenge for the law
enforcement agencies in the new millennium. Because of the specific nature of these crimes,
they can be committed anonymously and far away from the victims without physical presence.

The term “cyber-crime” is a broad term that is usually applied to a broad range of crimes in
which computers are, in some manner, involved. This term, however, is vague and actually
refers to a collection of dissimilar forms of criminal conduct that are powered by different
motives.

Every computer system is threatened by the large number of crimes which we usually call cyber
crimes, but every computer system does not face an equal risk of being victimized by all of
those crimes.

Any criminal activity that uses a computer either as an instrumentality, target or a means for
perpetuating further crimes comes within the ambit of cyber crime.

As Internet usage continues to rise throughout the world, the threat of cyber crime also grows.
While some of these crimes are relatively harmless and commonplace, others are very serious
and carry with them felony charges.

These white-collar crimes and cybercrimes in the present generation go hand in hand. So, in
this present world, it is difficult for the law enforcement agencies to differentiate between white
collar crimes and cybercrimes.

Generally, when a crime is done, then there is a direct association of the crime & victim. But
in case of cyber offences, the victim need not be associated with the crime scene. They may
not realise that the offence has been committed on them.

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Cyber-criminals have a major advantage compared to other criminals who have committed
traditional crimes. Criminals under cyber law can use computer technology to inflict damage
without the risk of being apprehended or caught.

It has been predicted that there would be simultaneous increase in cybercrimes with the
increase in new internet web sites. The areas affected by cybercrimes are banking and financial
institutions, energy and telecommunication services, transportation, business, industries etc.

This financial cost of white-collar crime is probably several times greater than that of all the
crimes taken together. In a recent study is has been concluded that the financial loss to society
from white collar crime is far greater than the financial loss from the predatory crimes
committed by persons of lower socio-economic status. It has been further concluded that the
average loss per burglary is less than ten thousand rupees and a burglary which yields as much
as one lakh of rupees is exceedingly rare. On the other hand, there may be several crores rupees
embezzlements reported in one year. Notably, these embezzlements are nothing as compared
with the large-scale crimes committed by corporations, investment trusts and public utility
concerns. It can, therefore, be inferred that white-collar criminals violate trust and create
distrust which lowers social morale and results into social disorganization to a large extent
while other crimes produce relatively little effect on social institutions.

Those who become white collar criminals generally start their career in good neighbourhoods
and good homes, well-educated with some idealism and get into peculiar business situations in
which criminality is practically a routine way of life. Another explanation for white collar
criminality is to be found in the process of social disorganization in the community.

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 DIFFERENT TYPES OF CYBER CRIMES5

1. Computer Viruses6
2. Phishing7
3. Spoofing8
4. Phone Phishing9

5. Internet Pharming10

6. Investment Newsletter11

7. Credit Card Fraud12

8. Spam13
9. Fraud14
10. Cyber terrorism against the government organization15

5
http://www.legalservicesindia.com/article/article/white-collar-crimes-cyber-crimes-255-1.html, visited on
27/10/2013.
6
Viruses are used by Hackers to infect the user’s computer and damage data saved on the computer by use of
“payload” in viruses which carries damaging code. Person would be liable under I.T Act only when the consent
of the owner is not taken before inserting virus in his system. The contradiction here is that though certain viruses
causes temporary interruption by showing messages on the screen of the user but still it’s not punishable under
Information Technology Act 2000 as it doesn’t cause tangible damage. But it must be made punishable as it would
fall under the ambit of ‘unauthorised access’ though doesn’t cause any damage. This ambiguity needs
reconsideration.
7
It is an act in which the hackers, by using e-mail messages which completely resembles the original ones ask for
the verification of certain personal information, like account numbers or passwords etc. Here the customer might
get deceived by the originality of that message, which may lead to huge financial losses if the information is used
for fraudulent acts like withdrawing money from customers account without him having knowledge of it.
8
This is carried on by use of deceiving Websites or e-mails. These sources mimic the original websites so well
by use of logos, names, graphics and even the code of real bank’s site.
9
It is done by use of in-voice messages by the hackers where the customers are asked to reveal their account
identification, and passwords to file a complaint for any problems regarding their accounts with banks etc.
10
Hacker here aims at redirecting the website used by the customer to another bogus website by hijacking the
victim’s DNS server and changing his I.P address to fake website by manipulating DNS server. This redirects
user’s original website to a false misleading website to gain unauthorized information.
11
We usually get newsletter providing us free information recommending that investment in which field would
be profitable. These may sometimes be a fraud and may cause us huge loss if relied upon. False information can
be spread by this method about any company and can cause huge inconvenience or loss through junk mails online.
12
Huge loss may cause to the victim due to this kind of fraud. This is done by publishing false digital signatures.
Most of the people lose credit cards on the way of delivery to the recipient or its damaged or defective,
misrepresented etc.
13
The most common type of cybercrime is spam. While email spam laws are fairly new, there have been laws on
the books regarding "unsolicited electronic communications" for many years.
14
Credit fraud is another common form of cybercrime. Certain computer viruses can log keystrokes on your
keyboard and send them to hackers, who can then take your Social Security number, credit card number and home
address. This information will be used by the hacker for his own means.
15
Cyber terrorism may be defined to be “ the premeditated use of disruptive activities, or the threat thereof, in
cyber space, with the intention to further social, ideological, religious, political or similar objectives, or to

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 REASONS FOR CYBERCRIMES:
Hart16 has said ‘human beings are vulnerable so rule of law is required to protect them’.
Applying this to the cyberspace we may say that computers are vulnerable so rule of law is
required to protect and safeguard them against cybercrime. The reasons for the vulnerability of
computers may be said to be:

1. Capacity to store data in comparatively small space

2. Easy to access
3. Complex
4. Negligence
5. Loss of evidence

PROVISIONS UNDER INFORMATION TECHNOLOGY ACT, 2000

Nature and Punishment

• Damage to Computer system etc. Compensation for Rupees 1crore17

• Hacking (with intent or knowledge) Fine of 2 lakh rupees, and imprisonment for 3
years18.
Publication of obscene material in e-form Fine of 1 lakh rupees, and imprisonment of
5years, and double conviction on second offence19
• Not complying with directions of controller Fine upto 2 lakh and imprisonment of 3
years20.
• Attempting or securing access to computer Imprisonment upto 10 years21.
• For breaking confidentiality of the information of computer Fine upto 1 lakh and
imprisonment upto 2 years22
• Publishing false digital signatures, false in certain particulars Fine of 1 lakh, or
imprisonment of 2 years or both23.

intimidate any person in furtherance of such objectives”. Another definition may be attempted to cover within its
ambit every act of cyber terrorism.
16
In his book “The Concept of Law”
17
Sec.43 of the Information Technology Act, 2000
18
Sec.66 of the Information Technology Act, 2000
19
Sec.67 of the Information Technology Act, 2000
20
Sec.68 of the Information Technology Act, 2000
21
Sec.70 of the Information Technology Act, 2000
22
Sec.72 of the Information Technology Act, 2000
23
Sec.73 of the Information Technology Act, 2000

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 • Publication of Digital Signatures for fraudulent purpose. Imprisonment for the term of
2 years and fine for 1 lakh rupees24.

DRAWBACKS UNDER IT ACT, 2000

As the cyber law is growing, so are the new forms and manifestations of cyber crimes. The
offences defined in the IT Act, 2000 are by no means exhaustive. The IT Act, 2000 does not
cover various kinds of cyber crimes and Internet related crimes. Certain crimes which doesn’t
comes under the ambit of the IT Act, 2000 are-
a) Theft of Internet hours;
b) Cyber theft;
c) Cyber stalking;
d) Cyber harassment;
e) Cyber defamation;
f) and cyber fraud etc.

The IT Act, 2000 has not tackled several vital issues pertaining to e-commerce sphere like
privacy and content regulation.

Another grey area of the IT Act is that the same does not touch upon any anti- trust issues. The
most serious concern about the Indian Cyber law relates to its implementation.

The IT Act, 2000 does not lay down parameters for its implementation. It seems that the
Parliament would be required to amend the IT Act, 2000 to remove the grey areas mentioned
above.

24
Sec.74 of the Information Technology Act, 2000

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 MEASURES TO CURB THE CYBER CRIME
Though by passage of time and improvement in technology to provide easier and user friendly
methods to the consumer for make up their daily activities, it has led to harsh world of security
threats at the same time by agencies like hackers, crackers etc. various Information technology
methods have been introduced to curb such destructive activities to achieve the main objects
of the technology to provide some sense of security to the users. Few basic prominent measures
used to curb cybercrimes are as follows:

a. Encryption: This is considered as an important tool for protecting data in transit. Plain
text (readable) can be converted to cipher text (coded language) by this method and the
recipient of the data can decrypt it by converting it into plain text again by using private
key. This way except for the recipient whose possessor of private key to decrypt the
data, no one can gain access to the sensitive information.
b. Synchronized Passwords: These passwords are schemes, used to change the
password at user’s and host token. The password on synchronized card changes every
30-60 seconds which only makes it valid for one-time log-on session. Other useful
methods introduced are signature, voice, fingerprint identification or retinal and
biometric recognition etc. to impute passwords and pass phrases
c. Firewalls: It creates wall between the system and possible intruders to protect the
classified documents from being leaked or accessed. It would only let the data to flow
in the computer which is recognized and verified by one’s system. It only permits access
to the system to ones already registered with the computer.
d. Digital Signature: These are created by using means of cryptography by applying
algorithms. This has its prominent use in the business of banking where customer’s
signature is identified by using this method before banks enter into huge transactions.

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 PREVENTIVE MEASURES
Prevention is always better than cure. So, it is always better to take precautions while operating
the net. Precaution, Prevention, Protection, Preservation and Perseverance are the main
recourse of preventing cybercrimes with regard to white collar crimes. "Taking security
seriously," is the foremost basic essential thing in protecting data25. "If you protect your
customer's data, your employee's privacy and your own company, then you are doing your job
in the grander scheme of things to regulate and enforce rules on the Net through our
community." A citizen should keep in mind the following things-

1. To prevent cyber stalking, avoid disclosing any information pertaining to one self.
2. Always avoid sending photographs online particularly to strangers and chat friends
as there have been incidents of misuse of the photographs.
3. Always use latest and up-to-date anti-virus software to guard against virus attacks.
4. Always keep back up volumes so that one may not suffer data loss in case of virus
contamination
5. Never send your credit card number to any site that is not secured, to guard against
frauds.
6. Always keep a watch on the sites that your children are accessing to prevent any
kind of harassment or depravation in children.
7. It is better to use a security programme that gives control over the cookies and send
information back to the site as leaving the cookies unguarded might prove fatal.
8. The web site owners should watch traffic and check any irregularity on the site.
Putting host-based intrusion detection devices on servers may do this.
9. Use of firewalls may be beneficial.
10. Web servers running public sites must be physically separate and protected from
internal corporate network.

25
Vinay Kumar D.- Cyber Crime Prevention, International Journal of Information Dissemination and
Technology, 3(3), 222-224.

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 CONCLUSION
Capacity of human mind is unfathomable. It is not possible to eliminate cybercrime from the
cyber space. It is quite possible to check them. History is the witness that no legislation has
succeeded in totally eliminating crime from the globe. The only possible step is to make people
aware of their rights and duties and further making the application of the laws more stringent
to check crime. Undoubtedly the Act is a historical step in the cyber world. Further I all together
do not deny that there is a need to bring changes in the Information Technology Act to make it
more effective to combat cybercrime. Crucial aspect of problem faced in combating crime is
that, most of the countries lack enforcement agencies to combat crime relating to internet and
bring some level of confidence in users.

So, it is clear that with the advent of technology, that the white-collar crimes in the society are
becoming more & more. So as already stated prevention is better than cure & so to, we should
be careful with the information we have. So effective steps shall be initiated in protecting the
data.

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 BIBILIOGRAPHY

• Sanjay S. Bang - A Critical Study Of White Coller Crimes In India,

• Akshat Khare - Doctrinal Report On White Collar Crimes
• G. Nagarajan, Dr. J. Khaja Sheriff - White Collar Crimes In India, International Journal
Of Social Science & Interdisciplinary Research Vol.1 Issue 9, September 2012.
• Understanding White Collar Crimes
• Sutherland, Edwin H. (1940) ‘White-Collar Criminality’, American Sociological
Review 5(February).
• Sutherland, Edwin H. (1949) White Collar Crime. New York: Holt, Rinehart &
Winston.

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