Mr. Pyla Nityananda Rao Babu

DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY SABBAVARAM,
VISAKHAPATNAM, A.P., INDIA
PROJECT TITLE
WHITE COLLAR CRIMES
SUBJECT
CRIMINOLOGY, PENOLOGY, VICTIMOLOGY
NAME OF THE FACULTY
Mr. Pyla Nityananda Rao Babu
Name of the Candidate

Roll No.
Semester
ALLU. SAI SARAYU

“2018007”
SEMESTER- 8
DATE OF SUBMMISSION:5-04-2022
1
ACKNOWLEDMENT
I would like to extend my heartfelt thanks to my faculty Mr. Pyla Nityananda Rao Babu SIR, for
his constant support and guidance without which this project would not have been successful
despite my efforts. Also my sincere thanks to Damodaram Sanjivayya National Law University,
Sabbavaram for providing me with all the necessary sources and perfectly guiding me in the
preparation of my project.
ALLU. SAI SARAYU
2018007
SECTION A
2
Table of Contents
Introduction.................................................................................................................................................4
Meaning and Definition of White Collar Crimes.........................................................................................5
Sutherland’s Definition of White Collar Crime...........................................................................................6
Criticism of Sutherland’s Views on White Collar Crime.........................................................................6
Classification of White Collar Crimes.........................................................................................................7
Types of White Collar Crime in India.........................................................................................................7
Contributing Factors of White Collar Crimes..............................................................................................9
Reasons for the growth of White Collar Crimes in India.............................................................................9
The reasons behind white collar criminals going unpunished are:......................................................10
Laws and Acts preventing White Collar Crime.........................................................................................11
Prevention of Money Laundering Act, 2002:.........................................................................................11
Prevention of Corruption Act, 1988.......................................................................................................11
Companies Act , 2013 :-........................................................................................................................11
Industrial (Development and Regulation ) Act, 1951............................................................................12
Conclusion.................................................................................................................................................12
3
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
a a a a a a a a a a a a a a a a a
apersons or persons involves in business sector (either directly or indirectly)

a a a a a a a a a a
.White Collar Crime is an illegal act done in order to achieve an illegal objective by the
a a a a a a a a a a a a a a a a
violent means in order to gain money or wrongful gains1 or to avoid payment of legal dues or
a
ato retain money or property either moveable or immoveable in a wrongful manner. It can also
a a a a a a a a a a a a a a a
abe termed as socio- economic offences.

a a a a a
White Collar Crimes are rapidly increasing now days in our country with the advancement
a a a a a a a a a a a a
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

a a a a a a a a a a a
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
a a a a a a a a a a a a a a
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-
a a a a a a a a a a a a a
economic class.3 In case of Ram Narayana Poply v C.B.I4.,

a a
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
1
Section 23 of Indian Penal Code(45 of 1860)
2
Girjesh Shukla , Criminology , Crime Causation , Sentencing and Rehabilitation of Victims( Lexis Nexis), pg. no
101
3 th
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
4
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, Indian a a a a a a a a a
Penal Code, 18607 has already codified some of the offences related to white collar
a
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.
a
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

a a a a a a
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
6 th
Prof. N.V. Paranjape, Criminology, Penology , Victimology (17 Edition, Central Law Publication ,
2017)
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
5
a individual victim is almost negligible. Therefore, its nature is such that it overlaps the
a multiple type of violation of criminal code, and it also includes moral or ethical violation of
a causing most serious social as well as economic harm.12

a a a a a a a a
Sutherland’s Definition of White Collar Crime

Professor Sutherland presented his concept of “white collar crime” in his address to the a a a a a a a a a a
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
a a a a a a a a a a a a a a a a a a
own definition and gave a modified definition of white collar crime defining white collar
a a a a a a a a a
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
awhich white collar crime belong’

a a a a
the trend is of not punishing the offenders,

a a a a a a a
unorganized and in effective resentment of exploitation by white collar criminals.16

a a a a a a a a a a
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 a a a a a a a a a a a a
acrime leads to confusion.

a a a
12
Girjesh Shukla, Criminology , Crime Causation , Sentencing and Rehabilitation of Victims( Lexis Nexis), pg.
no 99
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
16
Dr. S.S. Srivastava, Criminology, Criminal Administration (3th Edition, Central Law Agency, 2007) pg. no 41
6
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
a a a a a a a
socio- economic status of individuals , but rather the type of crime and the circumstances of its
commission.17
Classification of White Collar Crimes

Theoretically, various white-collar crimes may broadly be classified into four major categories
as follows:-
1. Ad hoc crimes: they are also known as personal crimes because in this category of white-
collar crimes, the offender pursues his own individual objective having no face to face contact
with the victim. Hacking on computers, credit card frauds tax evasion, etc. are common forms
of ad hoc white-collar crimes.

a a a a a a
2. White-collar crimes involving a breach of trust or breach of faith bestowed by an individual

or institution on the perpetrator. Insider trading, financial embezzlements, misuse of funds

fictitious payrolls, etc. are common illustrations of this type of white-collar crime.
a a a a a a
3. Individuals occupying high positions or status who commit crime incidental to, and in
furtherance of their organizational operations constitute this category of white-collar crimes.
people occupying high position commit such crime, not because it is their central purpose, but a a a a a a a a a a
because they individually find an opportunity in the course of their employment to earn quick
money or gain undue advantages by using their power or influence. Example of such crimes is
fraudulent medical bill claims, fake educational institutions, issuance of fake mark
sheet/certificates, etc.
a a a
4. White-collar crimes may also be committed as a part of the business itself. Violation of
trademarks or copyrights, patent law or competition law, etc. the violation of domain name and
other corporate crimes are also white-collar crimes of this type.

a a a a a a a a a a
a Types of White Collar Crime in India

a a a a a a a
Following are some of the types of White Collar Crime:

a a a a a a a a a
Breach of trust :- In this type of crime breach of faith bestowed by an individual or institution on
17
Prof. N.V. Paranjape, Criminology, Penology , Victimology (17th Edition, Central Law Publication , 2017) pg. no
148
7
a perpetrator.18
Insider Trading: -When some uses the confidential information to trade in shares of publicly
held corporations.19
a a
Bank Fraud : - It means to engage in such activities which is taken place in order to defraud a a a a a a a a a a a a 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
a a a a a a a a
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
a a a a a a a
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 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
18
Prof. N.V. Paranjape, Criminology, Penology , Victimology (17th Edition, Central Law Publication , 2017) pg.
no148.
19
Aaashish Ahuja , Analysis of White Collar Crime https://blog.ipleaders.in/analysis-white-collar-crimes-india/
20
Aaashish Ahuja , Analysis of White Collar Crime https://blog.ipleaders.in/analysis-white-collar-crimes-
india/
21
22
Section 383 Indian Penal Code( 45 of 1860)
23
( 19811) 133 ITR 239
8
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

a a a a a a a
In case of Subramanium Swamy v. Dr. Man Mohan Singh,26 Supreme Court reiterated that the
a a a a a a a a a
a
a a a a
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. a a a a a
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

a a a a a a a a
Contributing Factors of White Collar Crimes a a a a a
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:-

a a a
 Legislators and the law implementers belong to the same group or class to which the
occupational criminals belongs.

a a a
 Less effort from law and administrations, favorable laws,

a a a a a a a
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.
9
less impact on individuals.
a a a
 The rise of white- collar criminality in many countries has coincided with the progress
amade in those countries in the economic and industrial fields.29

a a a a a a a a a
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.
a a a
Reasons for the growth of White Collar Crimes in India
Greed, competition and lack of proper laws to prevent such crimes are the major reasons
behind the growth of white collar crimes in India.

a a a a a a a a a a
Greed: The father of modern political philosophy, Machiavelli, strongly believed that men by
a a a a a a a
nature are greedy. He said that a man can sooner and easily forget the death of his father than
the loss of his inheritance. The same is true in the case of commission of white collar crimes.
Why will a man of high social status and importance, who is financially secure, commit such a a a a a a a a a a a
crimes if not out of greed? Easy, swift and prolong effect

The rapid growing technology, business, and political pressure has introduced the criminals to
newer ways of committing white collar crimes. Technology has also made it easier and swifter
to inflict harm or cause loss to the other person. Also, the cost of such crimes is much more
a a a a a a a a a a a a a a a a a a a
than other crimes like murder, robbery or burglary, and so the victim would take time to
recover from it. This would cut down the competition.

a a a a a a a a a
Competition:
Herbert Spencer after reading ‘On the Origin of Species’ by Darwin, coined a phrase that
a evolution means ‘survival of the fittest’. This implies that there will always be a competition
a between the species, and the best person to adapt himself to the circumstances and
a conditions should survive. a a
a Lack of stringent laws :Since most of these crimes are facilitated by the internet and digital
a methods of transfer payments, laws seem reluctant to pursue these cases as investigating and
a tracking becomes a difficult and complicated job.

a a a a a a a
29
10
Why it becomes difficult to track it is because they are usually committed in the privacy of a
home or office thereby providing no eyewitness for it.

a a a a a a a a a a
Lack of awareness: The nature of white collar crimes is different from the conventional nature
of crimes. Most people are not aware of it and fail to understand that they are the worst
victims of crime.
a a a
Necessity: People also commit white collar crimes to meet their own needs and the needs of
their family. But the most important thing that the people of high social status wants to feed
their ego.
a a a
The reasons behind white collar criminals going unpunished are:

a a a a a a a a a
• Legislators and the people implementing the laws belong to the same class to which these
occupational criminals belong.

a a a a
• The police put in less effort in the investigation as they find the process exhausting and hard,
and often these baffling searches fail to promise favorable results.

• Laws are such that it only favours occupational criminals.

a a a a a a a a a
• The judiciary has always been criticized for its delayed judgment. Sometimes it so happens
that by the time the court delivers the judgment, the accused has already expired.
This makes criminals loose in committing crimes. While white collar crimes are increasing at a
faster rate, the judiciary must increase its pace of delivering judgments.
Laws and Acts preventing White Collar Crime
11
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
agovernment authorities . The process of conversion of tainted money into untainted money is
acalled the money laundering. Thus, the main purpose and object of the mentioned Act, is to
aprevent money laundering. a a
The concept of money laundering is an international concept and menace and for the same
areason, United Nations adopted a political declaration in June 1998 and asked its members to
aenact the national legislations for the prevention of money laundering30. The present Act has
a a a a a a a
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 a a a a a a
crime. The issue of corruption is very dangerous to nation. The Santhanam Committee Report of
1964 defines the problem of corruption as a complex.

a a a a a a a a a
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 a a
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.

a a a a
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.
a
30
Snangeet Kedia’s Economic and Commercial Laws (June2011 , Pooja Law Publishing Co.)pg.no 155
12
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.
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
agrowth of industrial sector at high rate and on sustained basis forced the Govt. of India to issue
aindustrial policies in order to avoid any kind of malpractices in this sector. Thus, the Industrial
aPolicies Resolution of 1948 provided a legal support and aid to enact the Industrial
a(Development and Regulation) Act, 1951. a a a a
The main objective of the act is to empower the Govt. to take necessary steps for the growth and
adevelopment of the industry. It also empowers the Govt. to take necessary steps to –
a a a a a a a a
 regulate the pattern and direction of industrial development, to control

the activities,
 performance of industrial knowledge in the public interest.
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.

a a a a a a
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.
13
14

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DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY SABBAVARAM,

VISAKHAPATNAM, A.P., INDIA

NAME OF THE FACULTY

Mr. Pyla Nityananda Rao Babu

Name of the Candidate

ALLU. SAI SARAYU

apersons or persons involves in business sector (either directly or indirectly)

abe termed as socio- economic offences.

dimensions to crime related to professions. The speedy economic growth through

industrialization, globalization and growing influences of market forces on economy has

economic class.3 In case of Ram Narayana Poply v C.B.I4.,

Meaning and Definition of White Collar Crimes

services to society at large for example, misrepresentation through fraudulent

advertisement in order to increase the percentage of sales, infringement of copyrights and

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 ,

a causing most serious social as well as economic harm.12

Sutherland’s Definition of White Collar Crime

American Sociological Society in 1949.13 According to him, when a person of respectability

awhich 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

acrime leads to confusion.

Classification of White Collar Crimes

of ad hoc white-collar crimes.

2. White-collar crimes involving a breach of trust or breach of faith bestowed by an individual

or institution on the perpetrator. Insider trading, financial embezzlements, misuse of funds

other corporate crimes are also white-collar crimes of this type.

a Types of White Collar Crime in India

Following are some of the types of White Collar Crime:

giver in an illegal manner.

other persons20 without his or her permission.

Embezzlement: - Embezzlement means when a person illegally obtains someone’s property by

Extortion22:-When someone illegally obtains someone’s property by means of threatening or

public servant were often delayed the investigation

charges , must be strictly followed. a a a a a

it has tarnished the image of the country.28

Contributing Factors of White Collar Crimes a a a a a

collar crime are:-

occupational criminals belongs.

 Less effort from law and administrations, favorable laws,

amade in those countries in the economic and industrial fields.29

Reasons for the growth of White Collar Crimes in India

behind the growth of white collar crimes in India.

crimes if not out of greed? Easy, swift and prolong effect

recover from it. This would cut down the competition.

a conditions should survive. a a

a tracking becomes a difficult and complicated job.

home or office thereby providing no eyewitness for it.

The reasons behind white collar criminals going unpunished are:

occupational criminals belong.

and often these baffling searches fail to promise favorable results.

• Laws are such that it only favours occupational criminals.

Laws and Acts preventing White Collar Crime

aprevent money laundering. a a

1964 defines the problem of corruption as a complex.

very important in determining the criminal liability of a public officer.

Serious Fraud Investigation Office.

collar crime or corporate criminal liability of the corporate houses.

Industrial (Development and Regulation ) Act, 1951 : - As earlier mentioned, the

a(Development and Regulation) Act, 1951. a a a a