PROJECT REPORT ON

WHITE COLLAR CRIMES IN INDIA

CRIMINOLOGY

Submitted by: -
Name: -Pomita Hansda
Roll no: - (UL20BA011)

Under the guidance of

Prof.Manisha Chakraborty
Department of
Law
November,2023

Department of Xavier Law School

XIM University Bhubaneswar
 Bahelipada, Odisha, India

CERTIFICATE

This is to certify that Pomita Hansda, roll no-(ul20ba011) have successfully

completed the project on living relationship in India at academy of XIM
University Bhubaneswar,under my guidance and supervision in the
fulfillment of seventh semester, Bachelor of law (Xavier law School) of XIM
University Bhubaneswar, Odisha.

---------------------------------- -----------------------------------------------------------
Prof. Narayan Sarangi Prof. Manisha Chakraborty (project guide)
Head department of Department of Criminology Law
Law
 ACKNOWLEDGEMENT.

We deem it a pleasure to acknowledge our sense of gratitude to our project

guide Prof. Manisha Chakraborty under whom we have carried out our project
work. His incisive and objective guidance and timely advice encouraged us
with constant flow of energy to continue to work.

We wish to reciprocate in full measure the kindness shown by Mr. Narayan

Sarangi ( H.O.D, Xavier law school ) who inspired us with his valuable
suggestions to complete our work.

We shall remain grateful to them, for providing us a strong atmosphere by

enforcing to do the project work with utmost concentration and dedication.

Name:- Pomita Hansda

Roll no:- UL20BA011

Date:22.11.2023. ----------------------------------------------------
Place: Bahelipada, Odisha , India
 LIST OF CONTENT

Part 1 Introduction:-

 Statement of Problem
 Hypothesis
 Research Objectives
 Literature Review
 Research Methodology

Part II:-

Defining the term WHITE COLLAR CRIMES………………………… 4-5

Difference between Traditional Crimes and White- Collar Crimes………6

Statistical Data……………………………………………………………..6-7

Types of White Collar Crimes and Details on some of common crimes…..8-10

Reasons for Growth of White Collar Crimes……………………………….11

Part III
White Collar Crimes in India………………………………………………..12

Main reasons of White Collar Crimes in India………………………………13

White Collar Crimes and Indian Laws……………………………………….14

Part IV
Why many white collar criminals go unpunished?.....................................15-16

How to reduce the rate of White Collar Crimes?..............................................17

Conclusion…………………………………………………………………….18
INTRODUCTION
Based on the definitions of "White collar crime" described above, we may determine that this
is a type of crime done by people of high rank. We can observe that white collar crime is not
a potential threat to a person's property or body in terms of violence, but rather white collar
crime is significantly detrimental.
In my opinion, "white collar crime" does not always imply a guilty mind or the presumption
of innocence. This type of crime might be regarded a societal disadvantage for people
because it only concerns money gain for those who perpetrate it. Because of the extent of
corruption in our current culture, white collar crimes are on the rise. Because India has a high
percentage of corruption, white collar crime is prevalent. We are unable to disregard the fact
that no country in the globe is immune to "white-collar" crimes regulation or public welfare
offenses rather than genuine crimes.
These crimes are committed by productive, social, and economic behavior, not because it is
evil, but rather it is faithful to the long-discrete class-based perspective of society.
As we observe, "white-collar" crimes are predominantly committed in the fields of
engineering, law, and medicine in India....
The increase in the number of "white-collar" crimes is spreading like wildfire in all areas and
part of our society; they exist in every socioeconomic field, and little is being done to
eradicate them.
The study of white collar crimes was inspired by the discovery that sociology had
overspecializing in the social and economic factors of crime, such as family history and level
of wealth.
White-collar crime is becoming more prevalent in both the economic and legal sectors. In the
context of understanding the law, lawyers, judges, and magistrates now attract a protective
shield for thugs. It is unfortunate that White Collar Crimes are committed by state officials
who claim to uphold justice and equality in our country.
However, in order to achieve more stable and effective economic growth, India must put a
stop to the proliferation of "white-collar" crimes. We can observe that a decline in FDI
indicates a strong indicator of fraudulent outflow of funds from the economy, which is highly
detrimental.
Even in Indian society, people do not emphasize the seriousness of white collar crimes
because they are not directly apparent to the people. White collar crimes have a greater
negative impact on society, but because the time between commission and effect is so
extensive, those crimes go largely unnoticed. Because white collar crimes have no specific
aim, it is impossible for the general public to see them. However, the long-term negative
impact of these crimes reduces the country's economic and financial resources.
However, there have been numerous examples of white collar crimes in India, with people
abusing their positions of power to perpetrate these crimes.
It might be argued that the Indian government, private sectors, and stakeholders should all
work together to eradicate this type of crime.
Furthermore, the public should focus on the grassroots level that has given rise to the
presence of white-collar crime rather than the impact of what it causes.
"Prevention is better than cure," and hence not only the government, but each and every
individual, should work to normalize things.

STATEMENT OF PROBLEM:-
The main aim of this study is to know more about the various ingredients and types of White
Collar Crimes particularly keeping in focus it’s significance and its interrelationship with the
concept of Wrongful Gains. To reach at the desired conclusion various case laws have been
discussed to present a holistic understanding about the working and the thought process of
the courts with respect to applicable concepts of law.
A.2
HYPOTHESIS:-
With the aid of various case laws and certain theories the provisons and evolution of White
Collar Crime in India has been discussed in order to see how liabilities can be affixed to the
same while considering it as a part and parcel of Wrongful Gains.

A.3
RESEARCH OBJECTIVES
Following are the research objectives:
•To briefly understand the concept of White Collar Crimes.
•To explore the Interrelation of White Collar Crimes With Wrongful Gains
•To discuss various cases and facets pertaining to the Concept.

A.5
LITERATURE REVIEW
For the purpose of this project various case laws, statutes, articles were referred by me for
gathering relevant information. One of the Articles on Blog.I pleader.in titled ‘ White Collar
Crimes in India’ which I referred provided me with deep insight about the topic and helped
me immensely to grasp the knowledge regarding my topic for research.
A.6
RESEARCH METHODOLOGY

AIM & OBJECTIVE OF THE STUDY

The aim of the study is to give knowledge about the concept of White Collar Crimes and it’s
and intertwined relationship with the Concept of Wrongful Gains.
SCOPE OF STUDY
The study primarily focuses on the rule as it is developed in the common law system and its
implications India. Its secondary focus also deals with the situations prevailing in European
Countries
SIGNIFICANCE OF THE STUDY
The study is significant as it helps us to know about the Evolution and
Various aspects pertaining to white collar crimes. The study contains certain national cases
which shows how the Concept evolved in India.
LIMITATION OF THE PROJECT
The project fails to conduct a primary research thorough examination, interviews and surveys
due to lack of time and Social Distancing norms. The research of the project limits to internet
content as due to pandemic there is lack of access to Books.
 PART II

Defining the term WHITE COLLAR CRIMES.

A sociologist coined the phrase "white collar crime" in 1939 to describe criminal activities by
members of the upper classes in conjunction with their professions.
His point was that this type of crime was rarely recognized and prosecuted by the criminal
justice system.

Illegal activities including deception and concealment in order to obtain money, property, or
services, or to gain a competitive or professional edge.

Edwin Sutherland defined white-collar crime as "a crime committed by a person of

respectability and high social status in the course of his occupation" in the discipline of
criminology.i
 SUTHERLAND was a proponent of Symbolic Interactionism, and believed that
criminal behavior was learned from interpersonal interaction with others. White-collar
crime thus overlaps with corporate crime because the opportunity for fraud, bribery,
insider trading, embezzlement, computer crime, and forgery is more available to
white-collar employees.

Generally, however, white collar crime is defined as ”violation of the law committed by a
person or group of persons in the course of an otherwise respected and legitimate
occupation or business enterprise.”1

Edelhertz identified four main types of white-collar offending:

 Personal crimes (“crimes by persons operating on an individual, ad hoc basis, for

personal gain in a non-business context”2)
 Abuses of trust (“crimes in the course of their occupations by those operating inside
businesses, Government, or other establishments, or in a professional capacity, in
violation of their duty of loyalty and fidelity to employer or client”3),

1
James W. Coleman, 1989
2

3
 Business crimes (“crimes incidental to and in furtherance of business operations, but not
the central purpose of such business operations”4), and
 Con games (“white-collar crime as a business, or as the central activity of the business”5).

As a practical matter, many people have rather informal interpretations of the term. White
collar crime can refer to:

• Financial crimes
• Non-physical (or abstract) crimes
That is, crimes that “occur” on a form, balance book, or computer
• Crime by or targeting corporations
• Crimes typically committed by the rich
• Criminal businesses or organizations
Including, for some, organized crime and terroristic organizations
• Corporate or professional malfeasance
For some, this can include acts that are immoral, but that are not specifically prohibited
by law (for example, an insurance company automatically targeting every policyholder who
gets diagnosed with breast cancer for an aggressive fraud investigation to find any possible
pretext to drop the account).
• Anything that is against the law that the average beat cop would not typically handle
Essentially, everything but street crime (blue collar crimes).

Finally, many people have a general sense that they know what counts as white collar crime
and what does not, but have no specifically articulated sense of what qualities separate
members of the class from Non-members.

Difference between Traditional Crimes and White- Collar Crimes

Motive of the White Collar Criminal is avarice and rapaciousness not lust or hate as is the
case in traditional crimes. Background of white collar crime is non-emotional (unlike rape,
murder, defamation etc.) whereas in case of traditional crimes some emotional aspect is
normally found. There is no reaction as between the victim and the offender in care of white
collar crimes. The victim is usually the State or a section of the public, particularly the
consuming public (the portion which consumes goods or services, buys shares or securities or
other intangibles). Even where there is an individual victim, the more important element of
the offence is harm to the society.
Mode of operation of the offender is fraud not force. Usually, the act is deliberate and willful.
Interest is protected in two-fold-
(a) Social interest in the preservation of
(i) The property or wealth or health of its individual members, and national resources
(ii) The general economic system as a whole, from
(1)Exploitation or
(2)Waste by individuals or groups
(b) Social Interest in the augmentation of the wealth of the country by enforcing the laws
Relating to taxes and duties, foreign exchange, foreign commerce, industries and the like.

5
White Collar Crime Worldwide (Statistical data)

There’s been a drop in the overall prevalence of fraud, according to a recent global report.
However, a number of specific frauds are getting more common: In particular, management
conflict of interest, supply chain fraud, internal financial fraud and corruption. Also, what’s
interesting is that today’s fraudsters are getting increasingly sophisticated in structuring their
crimes and using tactics to prevent detection.

India
84%
Corruption and information theft, loss or attack are key challenges for companies in India. 78
percent of respondents indicated that their organization is highly or moderately vulnerable to
corruption and bribery. Fewer than 50 percent invest in anti-fraud measures, such as
employee background screening and risk management, even though 59 percent of those that
suffered from fraud said it was an inside job.

Statistical Survey of India of the Kroll Global Fraud Report 2011

Moreover, eight of the 10 frauds covered in the survey were more widespread in India than
they were globally, in particular: internal financial fraud (22% of Indian companies were
affected compared to 12% overall) and vendor or procurement fraud (20% compared to
12%). The number of firms affected by corruption dropped in the last year from 31% to 20%.
Nevertheless, this is still well above the global average (11%) and corruption remains a
leading fraud concern: half of Indian companies still report themselves moderately or highly
vulnerable to it. Indian respondents appreciate that they have a significant fraud risk: except
for management conflict of interest, they are noticeably more likely than average to consider
their companies moderately or highly vulnerable to every type of fraud covered in the survey.
However, this does not automatically translate into addressing the problem. In the next year,
Indians are less likely than average to be investing in eleven of the twelve anti-fraud
strategies covered in the survey. In particular, despite high levels of concern about
information theft, only 40% plan to spend on IT security, compared to 53% globally.
Moreover, in the last year, 22% of Indian firms have weakened their internal controls,
frequently as a result of budget constraints. This is one of the highest figures for any country
in the survey. The survey brings to light the need for Indian companies to be more active in
combatting fraud.

Within the broad category of white collar crime, cases were classified by prosecutors into
more specific types.

Case types within white collar crime are

• Federal Procurement Fraud, Federal Program Fraud, Tax Fraud, Arson for Profit,
Other Insurance Fraud, Financial Institution Fraud, Bankruptcy Fraud, Advance
Fee Schemes, Other Fraud Against Businesses, Consumer Frauds, Securities Fraud,
Commodities Fraud, Other Investment Fraud, Antitrust Violations – Other, Computer
Fraud, Health Care Fraud, Fraud Against Insurance Providers, Intellectual Property
Violations, Insider Fraud Against Insurance Providers, MEWA (Multiple Employer
Welfare Arrangements) Fraud/MET, Antitrust Violations – Airlines, Antitrust Violations
– Banking, Antitrust Violations - Defense Procurement, Antitrust Violations -
Extraterritorial Application Of, Antitrust Violations - Finance Markets, Other than
 Banking, Telemarketing Fraud, Corporate Fraud, Identity Theft, Aggravated Identity
Theft, Other White Collar Crime/Fraud.

The largest number of prosecutions of these matters in August 2016 was for "Fraud-
Other", accounting for 27.4 percent of prosecutions. Prosecutions were also filed for
"Fraud-Tax" (12%), "Fraud-Federal Program" (10%), "Fraud-Health Care" (8.8%),
"Fraud-Financial Institution" (8.5%), "Fraud-Identity Theft-Aggravated" (6.8%), "Fraud-
Identity Theft-Other" (6.8%), "Fraud-Other Business" (5.1%), "Fraud-Other Investment"
(3.6%).

Types of White Collar Crimes and Elaborated Details on some of common

crimes.6

 Bank Fraud: To engage in an act or pattern of activity where the objective is to

defraud a bank of funds.

 Blackmail: A demand for money or other consideration under threat to do bodily

harm, to injure property, to accuse of a crime, or to expose secrets (also in IPC).

 Bribery: When money, goods, services, information or anything else of value is

offered with intent to influence the actions, opinions, or decisions of the taker. You
may be charged with bribery whether you offer the bribe or accept it.

 Cellular Phone Fraud: The unauthorized use, tampering, or manipulation of a

cellular phone or service. This can be accomplished by either use of a stolen phone, or
where a person signs up for service under false identification or where that person
clones a valid electronic serial number (ESN) by using an ESN reader and reprograms
another cellular phone with a valid ESN number.

 Computer fraud: Where computer hackers steal information sources contained on

computers such as: bank information, credit cards, and proprietary information.

 Counterfeiting: this normally happens when someone copies or imitates an item

without having been authorized to do so and passes the copy off for the genuine or
original item. Counterfeiting is most often associated with money however can also
be associated with designer clothing, handbags and watches (i.e. branded items).

 Credit Card Fraud: The unauthorized use of a credit card of certain person to obtain
goods of value.

 Currency Schemes: The practice of speculating on the future value of currencies.

 Educational Institutions: Also, this is another field where collar criminals operate
with impunity are the privately run educational institutions. The governing bodies of
those institutions manage to secure large sums by way of government grants of
financial aid by submitting fictitious and fake details about their institutions. The
teachers and other staff working in these institutions receive a meager salary far less
6
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 than what they actually sign for, thus allowing a big margin for the management to
grab huge amount in this illegal manner.

 Embezzlement: When a person who has been entrusted with money or property
appropriates it for his or her own use and benefit. (Criminal misappropriation in IPC
-S404).

 Environmental Schemes: The overbilling and fraudulent practices exercised by

corporations which purport to clean up the environment (fictitious bills are
produced/shown for higher money generation).

 Extortion: Occurs when one person illegally obtains property from another by actual
or threatened force, fear, or violence, or under cover of official right (IPC S 383).

 Engineering: In the engineering profession underhand dealing with contractors and

suppliers, passing of substandard works and materials and maintenance of bogus
records of work-charged labor are some of the common examples of white collar
crime.
Scandals of this kind are reported in newspapers and magazines almost every day in the
World.

 Fake Employment Placement Rackets: A number of cheating cases are reported in

various parts of the world by the so called manpower consultancies and employment
placement agencies which deceive the youth with false promises of providing them
white collar jobs on payment of huge amount ranging from 50 thousands to two lakhs
of rupees.

 Forgery: When a person passes a false or worthless instrument such as a check or

counterfeit security with the intent to defraud or injure the recipient. ( IPC S463)

 Health Care Fraud: Where an unlicensed health care provider provides services
under the guise of being licensed and obtains monetary benefit for the service.
The white collar crimes which are common to Indian trade and business world are
hoardings, profiteering and black marketing. Violation of foreign exchange
regulations and import and export laws are frequently resorted to for the sake of huge
profits. That apart, adulteration of foodstuffs, edibles and drugs which causes
irreparable danger to public health is yet another white collar crime common in
India.

 Insider Trading: When a person uses inside, confidential, or advance information to

trade in shares of publicly held corporations.

 Insurance Fraud: To engage in an act or pattern of activity wherein one obtains

proceeds from an insurance company through deception.

 Investment Schemes: Where an unsuspecting victim is contacted by the person who

promises to provide a large return on a small investment.
 Kickback: Occurs when a person who sells an item pays back a portion of the
purchase price to the buyer.

 Larceny/Theft: When a person wrongfully takes another person’s money or property

with the intent to appropriate, convert or steal it.

 Legal Profession: The instances of fabricating false evidence, engaging professional

witness, violating ethical standards of legal profession and dilatory tactics in collusion
with the ministerial staff of the courts are some of the common practices which are,
truly speaking, the white collar crimes quite often practiced by the legal practitioners.

 Money Laundering: The investment or transfer of money from racketeering,

smuggling, drug transactions or other embezzlement schemes so that it appears that
its original source either cannot be traced or is legitimate.

 Medical profession: White collar crimes which are commonly committed by persons
belonging to medical profession include issuance of false medical certificates, helping
illegal abortions, secret service to dacoits by giving expert opinion leading to their
acquittal and selling sample-drug and medicines to patients or chemists in all parts of
the world.

 Racketeering: The operation of an illegal business for personal profit.

 Securities Fraud: The act of artificially inflating the price of stocks by brokers so
that buyers can purchase a stock on the rise.

 Tax Evasion: When a person commits fraud in filing or paying taxes.

The complexity of tax laws in India generally has provided sufficient scope for the
tax-payers to evade taxes. The evasion is more common with influential categories of
persons such as traders, businessmen, lawyers, doctors, engineers, contractors etc.
The main difficulty posed before the Income Tax Department is to know the real and
exact income of these Professionals. It is often alleged that the actual tax paid by
these persons is only a percentage of their income and rest of the money goes into
circulation as black money.

 Telemarketing Fraud: Actors operate out of boiler rooms and place telephone calls
to residences and corporations where the actor requests a donation to an alleged
charitable organization or where the actor requests money up front or a credit card
number up front, and does not use the donation for the stated purpose.

 Welfare Fraud: To engage in an act or acts where the purpose is to obtain benefits
(i.e. Public Assistance, Food Stamps, or Medic Aid) from the State or Federal
Government.

 Weights and Measures: The act of placing an item for sale at one price yet charging
a higher price at the time of sale or short weighing an item when the label reflects a
higher weight.
Reasons for Growth of White Collar Crimes7

 White collar crimes are committed out of greed. The people who generally are
involved in committing these crimes are financially secure.

 Financial or physical duress.

 White collar crimes are estimated to cost and damage society many times more than
crimes such as robbery and burglary (blue collars crimes). The amount of death
caused by corporate mishap, such as inadequate pharmaceutical testing, far
outnumbers those caused by murder.

 The emergence of cutting edge technology, growing businesses, and political

pressures has opened up new avenues for these criminal organizations to prosper.
And these organizations have become a hide out for these criminal to cover up these
offences. Due to the emergence of these organization, the visibility of the offences
has gained better camouflage.

 This increase is due to a booming economy and technological advancement such as

the Internet and fast money transfer systems. Law enforcement is sometimes
reluctant to pursue these cases because they are so hard to track and investigate. And
well as, these offences gets diluted in the society at large and their detection becomes
a hurdle for the legal system. As a result, most of these offences goes invisible.

 It is very difficult to detect as white collar crimes always committed in privacy of an

office or home and usually there is no eyewitness. Differentiating the impact of white
collar crimes and blue collar crimes it can be said that the former causes far much
damage to the country. However, the detection of the street crimes are easily done
since they bear eye-witnesses to give evidences against the commission of these Acts.

 But normally a very serious question arises that if we have specific legislations to
trace out White Collar Criminality then why these offenders go unpunished?

Main reasons for which these white Collar criminals or occupational criminals go
unpunished are
1. Legislators and the law implementers belong to the same group or class to which
these occupational criminals belong
2. Less police effort
3. Favorable laws
4. Less impact on individuals.

7
http://lexhindustan.com
The judiciary is equally, if not more, guilty of delaying justice. With white-collar crimes on
the escalation, it is imperative for the judiciary and police to distinguish between white-collar
crimes, petty crimes and acts of homicide and violence.

PART III

White Collar Crimes in India

Hoarding, Black Marketing and Adulteration

The white collar crimes which are common to Indian trade and business world are hoarding,
profiteering and black-marketing.
Violation of foreign exchange regulations and import and export laws are frequently resorted
for the sake of huge profits. That apart, adulteration of food stuff, edible and drugs which
causes irreparable danger to public health is yet another white collar crime common in India.
The Law Commission in India has suggested drastic measures against such offenders. In the
Commission observations the tedious prosecution process involved in the trial of such cases
frustrates the cause of justice and often unjustified acquittal due to defective report of the
analyst or delay in examination of sample or lack of legal expertise etc.

Tax-evasion

The complexity of tax laws in India as provided sufficient scope for the tax payers to evade
taxes the evasion is more common with influential categories of persons such as traders,
businessmen, lawyers, doctors, engineers, contractors, etc. The main difficulty posed before
the income tax department is to know the real and exact income of these professionals. It is
often alleged that the actual tax paid these person is only a fraction of their income and rest of
the money goes into circulation as ‘black money’. Despite frequent modification in tax laws
of the country the menace of tax evasion countries unabated and it is causing considerable
loss to government revenue.

The supreme court in its majority decision in ‘R.K Garg vs. Union of India’ upholding the
validity of the special bearer bonds (immunities and exemption) act, 1981, observed that the
act was not intending to encourage tax evasion in future and condone such evasion committed
in past but the real object of the act was to nation-wide search to uncertain undisclosed wealth
by encouraging small incentives to those who declare their undisclosed case. The main
intention was to uncertain “black money” so as to prevent further loss of government
revenues.

It is significant not in this context that was constitutes crime is ‘tax-evasion’ not the ‘tax-
avoidance’. Though both these terms appears to be synonymous, there is a fine distinction
between the two. While the former implied the non-payment of tax due to be paid, the latter
signifies arranging the spread over of one’s income in such a way that it doesn’t incur tax
liability legally and lawfully8.
8
White Collar Crimes in India | Yogesh V Nayyar |
Main reasons of White Collar Crimes in India

Corruption in Government and Politics

Corruption is one of the most talked about subjects today in the country since it is believed to
have penetrated into every sphere of government and political activity. Corruption of various
forms have always existed not only in India but also in countries which are materially and
politically more advanced. What distinguishes India from other societies is the variety and
degree of corruption afflicting our society. To quote James Cameron, an eminent
journalist of Fleet Street:

In India, corruption, public or private venality, is sanctified by the oldest tradition, it is

denied by nobody, indeed, totality and pervasiveness of Indian corruption is almost a
matter of national pride. Just as India’s droughts are the driest, her families the most
cruel, the overpopulation the most uncontrolled, so are all aspects of India’s corruption
and bribery the most wholly widespread and spectacular9.

Corruption in the modern context has acquired much wider connotation compared to the
traditional meaning given to the term which was confined to the concept of bribes of illegal
gratification taken by public servant. In its wider sense, corruption includes all forms of
dishonest gains in cash, kind or position by person in government and those associated with
public and political affairs.

Corruption in government:

The factors which make public servant corrupt are connected with the
economic condition of most of the government employees. In India, though
government service has some special prestige, the salaries given to employees,
by and large, are quite low. This factor in combination with some other factors
like inflation contributes a great deal towards corruption. Fortunately, the
judiciary has been by and large, free from corruption so far but lately some
unhealthy trends have set in.10

Corruption in Politics:

Corruption among ministers and other political personages is more dangerous

than corruption in governmental machinery in terms of enormity of the stakes
9
James Cameron
10
In quite a few decided cases, Magistrates have been found guilty of corruption. In Delhi as many as our civil
judges have been removed from their office in the recent past.
 involved in public life. The Santhanam Committee noted that while there were
elaborate rules to ensure probity among officials, there were none for
Ministers, legislators and political parties.11
The more usual form of political corruption in India are grafts, violation of
election laws and the abuse of official and political machinery because of the
liaison of political forces with big business. The popular episodes, known as
Mundhra Sirajuddin Tul Mohan Ram, in the party affairs involving Central
Cabinet Minister and Members of Parliament are typical example of
political corruption.

The cases of political corruption in India is on increase. Over the years, we

have seen that the politician/ministers are involved in number of corruption
cases, some of which after pending even before the various courts of the
country. The Bihar Fodder Scam Case12, Centre for Public Interest litigation
V Union of India13 (2G spectrum Case), cash for vote14, coal scam15 are some
of the examples.

White Collar Crimes and Indian Laws

The process of development has its own inherent hazardous speedy economic growth through
industrialization, liberalization, globalization, and growing influence of market force on
economy has open huge possibilities for white collar crimes in India.

In the history of modern India, initially rampant white collar crime was noted during World
War II, when lots of discretion was given to the government officers through licensing
system. This trends continued after the independence of India.

Though Indian Penal Code does provide certain provision dealing with the crime similar to
white collar crimes, but they were not only found inefficient but also conventional as they
were inadequate in prohibiting white collar crimes. After independence, the government of
India formulated various regulatory Acts including the Essential Commodities Act 1955, The
Industrial (Development and Regulatory) Act 1951, The Import and Export (Control) Act
1947, The Foreign Exchange Regulation Act 1974, Companies Act 1956 and 2016,
Monopolies and Restrictive Trade Practices Act 1968 etc..

Due to demand and the urgency of the making the market more accountable and inherently
resilient, MRTP Act 1968 was abolished into 2002, with the framing of Competition Act
2002 which provide greater safeguard to market system and at the same time provide greater
sanction against violators. Other statutes dealing with the White Collar Crimes include the
Conservation of Foreign Exchange and Prevention Activities (COFEPOSA), the
Smugglers and Foreign Exchange and Manipulators ( Forfeiture of Property) Act 1976
(SAFEMA)16 and the Prevention of Money Laundering Act of 2002.

11
Santhanam Committee Report (p101-102)
12
Union of India v. Sushil Kumar Modi, (1997) 4 SCC 770
13
(2012) 3 SCC I
14
P.V Narasimha Rao V State, (1998) 4 SCC 626; 1998 SCC (Cri) 1108
15
Manohar Lal Sharma V. Union of India (2014) 2SCC 532
16
Kesar Devi vs U.O.I AIR 2003 SC 4195.
 PART IV

Why many white collar criminals go unpunished?

According to Sutherland, the preferential treatment of white-collar offenders could be

explained in terms of their high socio-economic status, the remedial philosophy of the laws in
question and the relatively unorganized resentment of the public against the white collar
crimes. The reasons for the absence of such resentment were stated as to be as follows:

 The violations of law in such cases are complex, and can be appreciated only by
experts.

 The public agencies of communication (like the media) do not express the
organized moral sentiments of the community, partly because the crimes are
complicated and cannot be easily presented as news items, but probably in a
greater degree because these agencies of communication are themselves
controlled by businessman involved in the violation of many of these laws.

 The laws for the regulation of business belong to a relatively new and specialized
part of the statutes.

As to the reasons given above why such crimes went unpunished, Sutherland made the
following observations:

The difference in the implementation of the criminal law is due principally to the difference
in the social position and status of the 2 types of offenders. Because of their social status,
implementation of the criminal law in relation to white collar criminals become difficult.
They are more powerful than the traditional criminals. Consumers, investors and stock
holders are unorganized, lack of technical knowledge and cannot protect themselves.
White collar crimes goes undetected because it normally transcends the visibility of ordinary
cheating practices of small merchants.

Another obstruction in the prosecution and punishment of white collar criminals apart from
the fact that the public is not only indifferent and apathetic toward such violations of law is
that quite often the members of the community themselves contribute to the commission of
various white-collar crimes.

In other words, the “victims” of the crimes are also to blame for white collar
criminality.

In fact, such crimes cannot be committed unless there is a demand for illegal goods and
services in a community. Black marketing and illegal gratifications to public workers are
some of the common examples.
Ultimately, one more factor is believed to be responsible for the failure to punish or for
inadequate punishments so far as white-collar crimes are concerned. Judges of the courts
ordinarily belong to the upper strata of society and this factor may determine their attitude,
consciously or otherwise, towards white collar crimes offenders who also come from the
same social strata.

White collar crime being different in their nature and execution from ordinary crimes
present peculiar in terms of detection, investigation, prosecution and trial relating to
such offences. It is evident that for an effective enforcement of the laws, specially
trained personnel are needed to detect and investigate such crime.

It is because of different kind of challenge that the trend now is to separate the investigating
and prosecution agencies for such crimes; a deviation from the traditional practice of vesting
the two functions in the same agency. This may be, however, give the desired advantage only
if there is a proper coordination between the 2 agencies.

 The next problem related to the forum of trial and the substantive and procedural
aspects of the law governing it. The issue regarding the forum has generated some
controversy. It has been argued that to secure greater efficiency and effectiveness
socio-economic crimes must be handled by tribunals or quasi-judicial bodies which
may not be fettered by some of the unnecessary, archaic and disabling features of
ordinary criminal law.

Apprehensions have been expressed on the other hand that such forums may not be immune
from the influence of the executive branch of the government and they, therefore, may not
command the confidence of the general public.

 One possible approach is to retain the jurisdiction of ordinary criminal courts but to
do away with some of the over-indulgent provisions of criminal law in the context of
white collar crimes. As a result of the recommendation of the Santhanam Committee
some of the relevant laws were amended on these lines.

By these amendments greater powers have been conferred on investigating officers and on
the magistracy and summary trials are also possible for some of the offences. 17The law has
also been made slightly less benevolent to accused person by incorporating certain
presumptions against them under certain circumstances.

17
Some of the more important legislative pieces in this direction are : Anti-Corruption Laws( Amendment) Act,
1964; Foreign Exchange (Amendment) Act, 1964; Prevention of Food Adulteration (Amendment) Act, 1964 and
Wealth Tax (Amendment) Act, 1964
SUGGESTIONS: How to reduce the rate of White Collar Crimes?

White collar crime thrives on weak institutions, bad leadership and bad governance.
Something urgently needs to be done to nip in the bud, the increasing incidence of white
collar crime before the economy collapses.

Institutions that have been set up to fight economic crimes have not been effective because
they have not been truly independent; there may be political interference. It is hoped that
institutions such as the Commission on Human Rights and Administrative Justice, the
Economic and Organized Crime Office, the BNI would be adequately resourced and given
the necessary logistical support to operate effectively and fearlessly. We equally need
independent prosecutors when it comes to the prosecution of white collar crime.

Every institution, private or public should have in place anti-fraud mechanisms that are
operational, effective and efficient to combat economic crime. Internal controls must be
strengthened and all loopholes plugged to prevent fraudulent deals from manifesting.

Internal auditors must be trained and motivated to perform their duties without fear or favour.
The training they receive should make them capable, effective and efficient auditors.

External auditors must also be well paid so that they will not take bribes and cover up
economic crimes they discover during audit operations.

The judiciary must be made truly independent, sufficiently motivated with good salaries and
better working conditions so that they are not easily influenced when performing their
legitimate duties.

A severe penalty should be meted out to those found guilty of white collar crime so as to
deter others.

There is the need for a moral crusade in the country to instill important work values such as
diligence, hard work, integrity and honesty, self-discipline, a high sense of responsibility and
a commitment to excellence.

The media has an important role to play in our national moral recovery efforts. Just as the
media has been giving wide publicity to street crimes, it must do so with white collar crime.
They must report white collar crimes irrespective of who is involved.

Workers who exhibit a lifestyle of honesty and integrity must be motivated so as to

encourage others to follow suit. There is also the need to maintain confidentiality for the
whistle blower apart from motivating him/her.
There is also the need for us to collaborate with the international community to effectively
combat cross-border crimes that include economic crimes.

Conclusion

We conclude that by noting the privileges afforded those who commit white collar crimes are
pivotal to their crimes’ commission. The offenders’ relatively privileged position permits
them to choose crimes that pay and to protect themselves from the criminal justice system
and form the public’s scorn.
Although some are certainly more privileged than others, white collar criminals are allowed
to mitigate their deliberate criminal decisions using excuses unavailable to their street-crime
counterparts. Their stories resonate with those familiar with finance, office, politics, business
competition, and regulation, whereas street criminal’ explanations often fall on deaf ears.
Academic understanding and public policy are inevitably influenced by empathy for
criminals of privilege.

Where advances have been made in combating white collar crime, they have originated in
movements against it. The demands of these movements counteract influence on state policy
from anti-regulation constituencies and constrain the ability of state representatives to cozy
up privileged interests and white collar criminals.

The movement against white collar crime, to the extent that one exists, is largely reactive.
Business is allowed to proceed freely until some tragic offense reminds people and the
government that an oversight is needed. When life-threatening or blatant white collar
criminal come to light, regulations are enforced and preventive measures are taken until
media and public attention subside.

Public opinion survey shows that some white collar offenses are judged to be as serious as
violent street crimes, particularly ones that result in physical harm to innocent parties 18. Those
who expect that the public will be incensed to discover for example, that they have been paid
three cents extra for orange juice, because of fixed prices, therefore, inevitably are
disappointed19. Mundane crimes like price-fixing in the folding box industry and insider
trading do not hold the media’s attention. When damage from white collar crime is
imperceptible and diffuse, offenders easily escape detection and condemnation.

Despite the perception in some quarters of a social movement against crimes in the suites, it
is unclear that the public generally has an abiding concern about white collar criminals.
Assessed against the accomplishments of the larger victims’ rights movement, the movement
against the white collar crime thus far has seen little success in raising public consciousness
or in changing public policy significantly.

18
Schrager and Short,1980; Wolfgang et al., 1985

19
Box, 1983
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