Introduction

White Collar Crimes are the crimes committed by a person of high social status
during the course of his or her occupation. It is a type of crime which is
committed by highly professional persons or persons involves in business sector
(either directly or indirectly)
.White Collar Crime is an illegal act done in order to achieve an illegal objective
by the violent means in order to gain money or wrongful gains or to avoid payment
of legal dues or
to retain money or property either moveable or immoveable in a wrongful manner. It
can also be termed as socio- economic offences.
White Collar Crimes are rapidly increasing now days in our country with the
advancement of commercial and IT sectors. The recent development in the field of
technology has given dimensions to crime related to professions. The speedy
economic growth through industrialization, globalization and growing influences of
market forces on economy has open huge possibilities for white collar crimes in
India. White Collar Crime is pervasive in almost all
profession like legal, medical, engineering and educational institutions. White
Collar Crime injures the society at large scale in terms of economic growth and
development as certain professions offer lucrative opportunities for criminal acts
and unethical practices. It is more dangerous to society than other ordinary crime
because its end result is financial gain for the perpetrator and cause huge
financial losses to our economy. The financial loss to society from white collar
crime is probably greater than financial loss from burglaries, robberies and
larcenies committed by persons of lower socio- economic class. In case of Ram
Narayana Poply v C.B.I .,
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.
The term “White Collar Crime” was defined by sociologist Edwin Sutherland in 1939,
whose work penetrating in the area of white collar crime focused the attention of
criminologists on its demoralizing effect on the total crime picture.

White Collar Crime is not a phenomenon but an emerging concept in our country.
Thus, Indian Penal Code, 1860 has already codified some of the offences related to
white collar
crime in a comprehensive manner. The term “White Collar Crime” has not been defined
anywhere in the Indian Penal Code. But the dimension of the crime is so wide that
certain offences under Indian Penal Code is closely linked with white collar crime
such as bribery , corruption , food adulteration , forgery , fraud , cheating ,
extortion etc. The Codified criminal law has also provided the punishment for the
offences that comes under the dimensions of white collar crime or socio- economic
offences.

Meaning and Definition of White Collar Crimes

In simple words, a crime committed by the convicts employed in white collar jobs is
called as white collar crimes and person who commits white collar crimes are called
as white collar criminals.
White Collar Crime belongs to upper socio economic class of people or elite class
of society who violates the legal provisions of the criminal law while providing
their professional services to society at large for example, misrepresentation
through fraudulent advertisement in order to increase the percentage of sales,
infringement of copyrights and trademarks etc.
Thus, the definition of white collar crime includes following attributes:-
• It is a socio- economic offence
• which committed by a person of high respectability in the society, is of high
status ,
in course of his or her profession or occupation, and
• it is usually called as breach of trust.
The nature of White Collar is so grievous in nature that the injury or damage
caused as the result of them is so widely diffused in the society at large scale
that the gravity in regard to individual victim is almost negligible. Therefore,
its nature is such that it overlaps the multiple type of violation of criminal
code, and it also includes moral or ethical violation of causing most serious
social as well as economic harm.

Sutherland’s Definition of White Collar Crime

Professor Sutherland presented his concept of “white collar crime” in his address
to the American Sociological Society in 1949. 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. But,
later on he added a refinement to his own definition and gave a modified definition
of white collar crime defining white collar criminals as “ a person of upper socio
– economic class who violates the criminal law in the
course of occupational or professional activities”
According to Sutherland, white collar crimes are increasing due to three main
reasons:-

the judges, legislators and commission – members belong to the same social class to
which white collar crime belong’
the trend is of not punishing the offenders,
unorganized and in effective resentment of exploitation by white collar criminals.

Criticism of Sutherland’s Views on White Collar Crime

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

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

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

or institution on perpetrator.

Insider Trading: -When some uses the confidential information to trade in shares of
publicly held corporations.

Bank Fraud : - It means to engage in such activities which is taken place in order
to defraud a bank or using illegal means to obtain assets held by financial or non
- financial institution.
Bribery: -Bribery means offering money, goods or any kind of gift to some
government officials in order to have control over his actions or making them to
work as per the choice of giver in an illegal manner.

Computer Fraud : Computer frauds are very common these days . It has increased with
the advancement in the technology. It can also include cyber- crimes. Computer
frauds in simple words can be defined as, such frauds which involve hacking or
stealing information of some other persons 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.

Extortion :-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 India Supreme Court upheld that
the validity of the Special Bearer Bonds(Immunities and Exemption)Act, 1981,
observed that the Acts was not intended to encourage tax evasion in future and
condone such evasion committed in past but real legal intent of the act is to
launch a nation –wide search to unearth wealth encouraging small incentive to those
who declare their disclosed cash.

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 India
, observed that agency having disclosed a prime facie case against the public
servant. the corruption cases against the public servant were often delayed the
investigation
In case of Subramanium Swamy v. Dr. Man Mohan Singh, Supreme Court reiterated that
the time –limit of three months for grant of government sanction under Section 19
of the Prevention of Corruption Act, 1988 for the prosecution of public servant
alleged of corruption
charges , must be strictly followed.

Further in case of Jaylalitha v. Union of India , 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.

Contributing Factors of White Collar Crimes

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

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

White Collar Crime in Certain Profession

Some of profession involves the technical expertise and skills which provide enough
and sufficient opportunities for the scope of white – collar criminality. These
professions include medical field, engineering, legal practice and private
educational institutions.
Medical Field : - In this field white collar crime is generally committed by
persons belonging to medical profession include issuance of false medical
certificate , helping illegal abortions , selling drugs and medicine to patients or
chemists.
There is a difference between medical negligence and medical crimes. Medical
Professional accountable for their service given to their patient in due course of
their duty. The Supreme Court has redefined medical negligence to include overdose
of medicines, not informing patients about the side effects of drugs, not taking
extra care in case of disease having high- morality rate and hospitals not
providing amenities that are fundamental for patients. Dilatory tactics is used by
the members of this fraternity while treating their patients with aim to extracting
huge sums of money from them.
Engineering:- Some white collar crimes in field of engineering includes using of
wrong and cheap materials with sub – standard for the constructions of buildings,
roads, canals , dams etc. resulting the danger for the safety of public at a large
scale.

Educational Institution:- The governing bodies of educational institution are also

now involved in white collar crime. Cases on Educational Institution have
increased. The activities involved in white collar crimes in this area includes :-
false recruitment , wrong and misleading prospectus, termination of services ,
problems in pay – scale , unfair transfer in government schools and university etc.
In case of Nidhi Kain v Madhya Pradesh, Supreme Court using unfair means with the
admission exams will amount to disqualification of exam and principle of natural
justice “audi altream” must be followed. In case of Dr. G. Sarana v. University of
Lucknow , the concept of upper age limit and criteria was challenged by the
petitioner in the court of law.
Legal Profession:-The white collar crime in the field of law is fairly wide spread.
The legal professional ethics are widely committed by members of legal fraternity.
The common legal and professional violation committed by lawyers and legal advisors
are advising organized criminals, aiding in false claims and fabricating false
evidence.

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

Laws and Acts preventing White Collar Crime

Prevention of Money Laundering Act, 2002: - In India , black money is generated in

large scale from last few decades from various socio-economic crimes and this black
money is converted into white money so the economic offenders can easily get escape
of his or her criminal liability and that money can easily be used in the economy
with the notice of the government authorities . The process of conversion of
tainted money into untainted money is called the money laundering. Thus, the main
purpose and object of the mentioned Act, is to prevent money laundering.
The concept of money laundering is an international concept and menace and for the
same reason, United Nations adopted a political declaration in June 1998 and asked
its members to enact the national legislations for the prevention of money
laundering . The present Act has been passed to implement the resolution of United
Nations. The main aim of the guidelines is-
• To safeguard banks from acting as a chain in money laundering activities or
in the process of money laundering.
• To help banks to know more about the clients and customer and to keep a check
on them thus to protect them from the losses.

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

Companies Act , 2013 :- The act also deals with the white collar crimes. The
Companies Act, 2013 contains special provisions for offences , penalties and their
Compounding in many of its sections. The provisions of Companies Act , 2013 also
provides provisions to deal with effective penalty, mechanism, speedy trials
according to the gravity of offences committed under the Act. The Companies Act ,
2013 in Sec. 447 provides list of offences and punishment for fraud where- as Sec.
212 deals with investigation into the affairs of the Company by Serious Fraud
Investigation Office.
The Act states that notwithstanding anything in CrPc, 1973, every offence under the
act expect to offence mentioned under sub- section (6) of Sec 212 shall be deemed
to be non- cognizable offence.
Section 435- 438 of the Act provides establishment of special courts for the
purpose of providing speedy trials for offence committed which is punishable under
the Act. Sec.447 of the Act provides punishment for fraud and Sec 448 provides
punishment for producing or providing any false statement. Thus, the act tried to
cover every aspect to deal with the white collar crime or corporate criminal
liability of the corporate houses.

Essential Commodity Act, 1955 :-It is an another act, which is enacted with an
legislative intent to prevent the socio – economic offences or white collar crime.
The main object of this Act is to control the production, supply and the
distribution of certain commodities in the market. The act tries to protect the
interest of general public in order to secure equitable distribution of essential
commodity at a reasonable distribution. The act itself gives the definition of
essential commodity. The items and commodity declared as “essential commodity”
under the Act are reviewed from time to time in the light of liberalized economic
policies in the consultation and particularly with regard to their production,
demand and supply.
Section 6 of the Act imposes penalties and punishment for cognizable offences. The
punishment impose under section 6 of the Act is non –bailable offence. The Act
provides that mens rea is an essential element of the offence punishable under the
Act. The Act expressly that no Civil Court can grant any injunction or make any
order for any other relief against the Central or State Government or any public
officer, in respect of any act done, or purporting to be done. Thus, the Act does
not give any privilege to high authorities or to high officers of the Government.
The act intended to impose criminal liability upon the offender(s).
Industrial (Development and Regulation ) Act, 1951: - As earlier mentioned, the
increasing rate of white collar crime has started with era of industrialization in
India. With the growth of industrial sector at high rate and on sustained basis
forced the Govt. of India to issue industrial policies in order to avoid any kind
of malpractices in this sector. Thus, the Industrial Policies Resolution of 1948
provided a legal support and aid to enact the Industrial (Development and
Regulation) Act, 1951.
The main objective of the act is to empower the Govt. to take necessary steps for
the growth and development of the industry. It also empowers the Govt. to take
necessary steps to –
• regulate the pattern and direction of industrial development, to control the
activities,
• performance of industrial knowledge in the public interest.
The acts also give power to Central Govt. to take over the industrial undertakings
without going for any kind of investigation under the certain circumstances. Sec.
24 of the Act imposes penalties for the contravention or attempt to contravene or
abetment of the contravention, by any person.
Sec 24A of the Act provides that if any person when required by the Act or by an
order publish or made under the Act, makes or furnishes any information which is
false or misleading and he knows or has a reasonable cause to believe that the
produced information or statement is false or misleading shall be punished under
the Act with the fine of Rs 2000 or imprisonment of three months or both.
Misleading information may include the misrepresentation of accounts, records or
any declaration or any document. Thus, the policies made under the act and a
provision tries to prevent the occurrence of white collar crime at a very high rate
in the country.
Information Technology Act , 2002:- In order to tackle with computer- related
crimes , Information Technology Act , 2000 has enacted to provide legal recognition
to authentication of information exchanged on social media websites or any E-
Commerce networking sites. The act contains certain provisions that deal with white
collar crimes. Some of the section also deals with the awareness of crimes. The Act
in its Section 43 and 44 of Information Technology provides penalty for offences
committed as prescribed by the Act. Some of the following such offences are as
follows:-
• Unauthorized copying of an extract form any kind of the data
• Unauthorized access and downloading files illegally.
• Causing any damage to computer system or computer networking system.
• Providing any kind of assistance in any form to any unauthorized person who
can access to the other person’s computer without his or her permission
.
Fugitive Economic Offender’s Bill, 2017: - Recent case of Vijay Mallia has forced
Government and Legislature to make a law on economic offenders who commits white
collar crime in India and flee to other country in order to escape from their
criminal liability and jurisdiction of Indian Courts. The Bill has been referred to
the Standing Committee of Parliament. The draft of Bill provides provision which
empowers the Govt. to confiscate any property of economic offender in India who
flees to other country. The proposed bill will be applicable to all those economic
offenders who had a criminal liability of Rs 100 Crore or more. The Bill provides a
list of offences in its Scheduled List which can be termed as “economic offences”.
The bill provides provisions to a establish Special Court under The Prevention of
Money Laundering Act, 2002 to declare a person as fugitive economic offender. The
key feature of the Bill is that it provides the definition of fugitive of economic
offenders and talks about the procedure of Special Court and the applicability of
the Act. The Bill also provides that the Central Government may enter into any
treaty with any nation through any means inter alia devising a mechanism to
extradite the Fugitive Economic Offender of India which is present in their country
or allowing the Govt. or any respective authority to confiscate any foreign
property of such offender.
Conclusion
The advancement of science and technology in last few decades has created a new
form of crime which is known as “white collar crime”. It is a socio- economic
offence due to which economy suffers a lot. The person who commits these types of
crime is called socio-economic offenders. The term white collar is not defined in
criminal law but although certain form of white collar crime is defined in Indian
Penal Code. These forms of crime have closed linked with white collar crime. The
provision of white collar crime also deals with the punishment and fine associated
with the nature of crime. In past years many scam has been witnessed by India in
form of white collar crimes.
Govt. of India has taken many steps to prevent this type of crime in India. The act
such as Prevention of Corruption Act, 1988, Prevention of Money Laundering Act,
2002, Essential Commodity Act,1955 helps the Govt. to penalize such offences. The
recent bill pending in Parliament, The Economic Offender’s Bill, 2017, is an
initiative of NDA Govt. to have jurisdiction on economic offenders to flee off to
other country to escape from their criminal liability. The above mentioned acts (or
any other related act which prevents white collar crimes) along with legal
provisions of Indian Penal Code, 1860 should be harmoniously interpreted in such a
strict manner to control problem of white collar crimes in India.