crime is a comprehensive term which includes a wide range of illicit acts which
are committed by apparently respectable people in business set ups as a part of
their occupational roles. There are different types of white-collar crimes,
ranging from antitrust offenses to cyber-crimes to health care frauds and
beyond. These types of crime are vital to be looked upon because they impose
enormous financial and social detriment on individuals and society at large.
collar crimes have to be differentiated from the traditional street crimes as
in the latter case only a handful of people are affected while in the former
one the number of person harmed is countless. Distinguishing between the white
collar crimes and the traditional crimes is not meant to suggest that one form
of crime is worse than the other one. Instead, the intent is to note that
different types of crimes exist and a full understanding of crime, explanations
of crime and responses to crime will not occur unless the differences between
these forms of crime are understood.1
to the scenario in India, White Collar Crimes are rapidly growing
in our country with the advent of commerce and technology. The advancement in
the technology have given new dimensions to offences relating to computer and
the development of new websites have further added fuel to the fire. The areas
affected by these crimes are banking and financial institutions, industry, business
etc. someone has rightly said that the capacity of human mind is unfathomable
and these crimes are nothing but just folly mind games.
origin of White collar crime can be traced thousands of years back, although
the term itself was coined in 1939 by sociologist Edwin Sutherland as “a crime
committed by a person of respectability and high social status in the course of
his occupation”. White collar means offences committed by
business-men and government officials in their capacity as professionals.
first and the foremost case of ‘white collar crimes’ shows up in 15th-century
England, may be because England was the first country to industrialize, and it
developed earlier than in any other society. In the Carrier’s case2
of 1473, a Flemish trader
hired a carrier to carry bales of wool to Southampton. However, the carrier took
the bales of wool for himself. He was arrested for larceny (kind of theft), but
he could not be convicted of theft because the bales were rightfully in his
possession, because they had been given to him by the merchant. However, the
judge found that even though the existing law didn’t recognize the defendant’s
actions as theft, it was still against the laws of nature. Thus, this case made
what became known as embezzlement, a crime.
collar criminology has become a universal phenomenon with the advent of commerce
and technology. Alike other countries, India is equally grasped by white collar
criminality. After the independence the rate has shown up more as compared to
the pre-independence period and at that time the white collar crimes were
limited in nature, therefore the criminals were called as grass-eaters but now
they are referred as meat-eaters because the extent and level has increased
with time and technology.
reason behind the tremendous increase in white collar crimes in the past few
decades is to be found in the fast and rapid developing economy and the industrial
growth of this developing nation. The Santhanam Committee Report in its
findings showed a vivid picture of white collar crimes committed by persons of
high respectability such as businessmen, industrialists, government officials,
contractors and suppliers. The Report of the Vivin Bose Commission of Inquiry
into the affairs of Dalmia Jain group of companies in 1963 highlights how these
industrialists indulge in white collar crimes like various kinds of frauds,
falsification of accounts, tampering with the records and evidences for personal
gains, tax evasion etc. Similar observations were made by Mr. Justice M.C.
Chagla about the big business magnate Mundhra who wanted to “build up an
industrial empire of dubious means.” There were about 124 prosecutions
against this business tycoon and companies owned or controlled by him between
1958 to 1960 and as many as 113 of these prosecutions resulted into conviction.3
RELATING TO WHITE COLLAR CRIMES IN INDIA:
profiteering and black marketing are among the white-collar crimes which are
common to Indian trade and business world. Foreign exchange regulations (i e.
FERA) and import and export laws are very often violated in order to earn huge
profits. Yet another whistle-collar crime in India is the adulteration of foodstuffs,
edibles and drugs which causes irreparable damage to the health of public.
Because of the involvement of sophisticated system and many people it becomes
difficult to prosecute White Collar Criminals. Various regulatory legislations
has been introduced by the government of India which when breached results in
white-collar criminality. Some of these legislations include Essential
Commodities Act 1955, the Industrial (Development and Regulation) Act, 1951, The
Import and Exports (Control) Act, 1947, Companies Act, 2013, Prevention of
Money Laundering Act, 2002.
are various provisions contained in Indian Penal Code to check such crimes like
Bank Fraud, Insurance fraud, credit card fraud etc. Directions have been issued
by The Reserve Bank of India which needs to be strictly followed by the banks
under KYC (Know Your Customer) guidelines. There is requirement on part of
banks and financial institutions to maintain the records of transactions for a
period of ten years. Information Technology Act, 2000 has been formulated so as
to provide legal recognition to the authentication of information exchanged in
respect of commercial transactions. This helps to tackle computer related
Section 43 and 44 of Information Technology Act provides for the penalty for
the following offences:
Unauthorized copying of an extract from the data.
Unauthorized access and downloading of files.
Introduction of viruses or malicious programmers.
Damage to computer system and computer network.
Denial of access to an authorized person of a computer system.
Providing assistance to any person to facilitate unauthorized access to a
the focus of Information Technology Act is mainly on cyber-crimes, but this Act
also has certain provisions that deal with the white collar crimes. Chapter XI
deals with the offences of cyber-crimes and chapter IX deals with penalties and
adjudication of these crimes. Apart of this, many issues are unresolved because
Qualification for appointment of adjudicating officer is not prescribed.
Definition of hacking.
No steps for curbing internet piracy.
Lack of international co-operation.
Power of police to enter and search is limited to public places only.
Absence of strict guidelines for investigation of cyber-crimes.
OF WHITE COLLAR CRIMES:
collar crimes are not compact in nature, it has many types. Though there is no
limit to its classification but there are some of its form which are all
pervasive and they are as follows:-
as white collar crimes
Global Fraud Survey report of Kroll by Economist Intelligence Unit gives the
data about the fraud percentages globally. Fraud continues to be a major
problem universally and also in India. Of the corporations surveyed globally, 75%
reported experiencing frauds in the year 2010-2011. In India, the situation is even
worst, with 84% organizations claiming that they suffered from fraud during the
year. It is a wake-up call for India, as it ranked second worldwide after
Africa and shares the position with China i.e. second position. The report
showcased the top six fraud categories at global level with India. In majority of
the cases, India is doing much worse than its other counterparts. The crucial
pain points in Indian business are corruption and bribery, information theft,
internal financial fraud, financial mismanagement and vendor procurement.4
Corruption and bribery in India
and corruption continue to be a significant challenge in India. The 2012
Transparency International Corruption Perceptions and Bribe Payers Indices ranked
India 94th (out of 176) and 19th
(out of 28), respectively, depicting the severity of the issue. The most known
and grave corruption and fraud cases in India are – 2G telecom scam, Adarsh
Society scam, CWG fraud, Satyam Scam, Bofors Scam, Saradha Chit fund Scam,
Indian Coal Allocation Scams and various other land scams etc. – which have
negatively impacted on India’s reputation internationally. The situation became
more worsened with liberalization as the flow of foreign investments increased.
The sudden change in economy also resulted in higher greed and corruption
mushroomed up. The cases exhibit how senior politicians and business chiefs who
were much revered and respected played on their ethics. In my view,
approximately 90- 95% of the companies are exposed to corruption. The
multinational subsidiaries in India are also magnificently affected by
corruption. Though the FCPA and/or UKBA are applicable to them, the acts do not
have much effect in Indian scenario. In my view, the US/ UK authorities will be
able to follow only in the bigger cases, and the smaller ones will be ignored.
Hence, the effectiveness of these acts becomes limited. Secondly, the developed
countries have a one sided view of corruption. They prohibit the country’s own
companies from paying bribes. However, allowing them to accept the bribe money
deposits from Indian (and other countries) politicians and business persons and
ultimately to the country’s banks. This encourages money laundering in spite of
preventing corruption. Although, India has a Prevention of Corruption Act, 1988,
but it hasn’t reduced corruption. According to the act, government officials
cannot accept any form of bribes or grease payments. However, receiving 2-10%
bribe of total contract value assigned is quite prevalent. The Indian movement
against corruption led by Anna Hazare has forced government to issue a strong
Lokpal Bill. The implementation of the bill may curb the demand side of corruption
to some extent. In October 2011, the Prime Minister announced, ?that his
government was working on proposals to criminalize private sector bribery and
to also make illegal gratification of foreign public officials as an offence. This
is in line with United Nations Convention on Corruption, to which India is a
signatory. In November 2016, the BJP Government dubbed demonetization as a war
against black money and corruption. That time the hon’ble Prime Minister said,
“we need to move ahead with those supporting us in our fight against
are various other laws apart of the act of 1988 aiming at the eradication of
corruption like provisions of Indian Penal Code, 1860, Benami Transactions (prohibition
act),1988, prevention of money laundering act,2002, right to information act,
a study on Bribery and Corruption in India conducted in 2013 by global
professional services firm Ernst & Young (EY), a majority of the
survey respondents from PE firms said that a company operating in a sector
which is perceived as highly corrupt may lose ground when it comes to fair
valuation of its business, as investors bargain hard and factor in the cost of
corruption at the time of transaction. Corruption also results in economic
losses and low growth.
most white collar crimes violate trust they breed distrust.’5 Antitrust
violation can be categorized into two broad heads: restrictive trade agreements
and monopolies or monopolistic practices.
trade agreements means an illegal agreement between the competitors in any
industry to restrict the working of the industry. Two major examples of
restrictive trade practices are price fixing and market sharing or division.
Price fixing refers to the agreements between the competitors to set prices at
a certain level. For example, if pharmaceutical industries get together and
agree among themselves to charge hospitals a set price for the medicines used
in the labs or in the hospitals, this is called price fixing. Market sharing
occurs when competitors get together and divide up an area, so that only one of
them operates in any one of those areas at a point of time. For example, there
are only two contractors in a town and they might divide up a town so that one
takes the north side and the other the south side of town. These types of
agreements are illegal because they impose a restrain on trade. In these cases,
the prices for these goods and services (medicines and paving) are not being
set for open competition in the market, as they should be actually in a free
market economy. Rather, prices are being set by collusion between the
and monopolistic practices includes unfair attempts to corner a market or to
drive out competitors from a market and to become a single seller. A monopoly
is said to exist if one company or enterprise controls the entire market, but a
company is said to have a monopolistic control when apart of having competitors
it controls a large share of the market. Microsoft’s Windows operating system,
for example, was declared a monopoly even though there were other operating
systems also available because of its large share in the IT industry and other
systems have such a small market share.
is no clear definition of the term environmental crime. Implicitly, it is
defined as any violation of local, state, or central “environmental laws.”
Environmental laws seek to protect the environment by protecting the quality of
air, water, and soil by regulating both harmful additions to the environment
(water and air pollution, soil erosion) and harmful subtractions from the
environment (destruction of habitats and depletion of ozone).
crime comes in a variety of forms and categories. Offenders may be homeowners
who dump leftovers into a city sewerage system that are in violation of local bylaws,
or they may be multinational corporations or big industrial houses that
manufacture, ship, and dispose of hazardous materials to the rivers and under
conditions which are criminally wrong and morally not acceptable.
there are different types of environmental crimes which are associated with
different types of industries and businesses, the nature of these environmental
crimes in a community tends to reflect its local economic activity. Certain
types of environmental crimes are however widespread. A study of local law
enforcement responses to environmental crime concluded that illegal waste tire
disposal, improper disposal of furniture stripping and electroplating waste,
used motor oil disposal, and hazardous wastes dumped into streams and rivers,
are found in nearly all communities.6
a strict legitimate sense, what is considered as environmental crime varies
upon different jurisdictions. Statutory inconsistencies and the lack of uniform
codification of state environmental laws creates difficulties for the
authorities and investigators. At the same time, they tend to advance opportunities
for the environmental offenders, who can evade prosecution by moving their
operations to jurisdictions that are legally more “user-friendly” so as to
escape from the prosecution process and thereby avoiding the legal sanction.
“The modern thief can steal more with a
computer than with a gun. Tomorrow’s terrorist may be able to do more damage
with a keyboard than with a bomb.”
elevation of technology has made man hanger-on Internet for all his needs and
wants. Internet technology has given man an easy access to everything while
sitting at one place. Social networking, online-shopping, storing data, gaming,
online studying, online jobs, kindles, web-surfing etc. every possible thing
that a man can think of to do through the channel of internet. With the build-out
of internet and its related benefits, also developed the concept of cyber-crimes.
Cyber-crimes are committed in different forms such as hacking, pornography, web
hijacking, cyber stalking, software piracy, cyber defamation, forgery etc.
a report published in 2016 by the National Crime Records Bureau report, the incidence
of cyber-crimes has increased by 7.55% more than in the previous year i.e. 2015
and highest no. of cases were reported in the state of Uttar-Pradesh.7
There are some white collar crimes which are committed by persons of medical
profession namely making false medical certificates, illegal abortions, selling
sample drugs and medicines to the patients and chemists.
In this field also there are various sorts of crimes which comes in this
category like underhand dealing with the contractors and industries, using
inferior quality goods for construction purposes etc.
of false evidence, violating ethical standards of the profession and making
illegal agreements with ministerial staff and some other illegal practices by
Educational Institutions are also subject to these crimes whether it be
charging huge donations or selling of professional seats or manipulating the
merit lists. These bodies also manage to secure huge amounts by way of grants
by the government by showing fictitious and fabricated details about the
FOR GROWTH OF WHITE COLLAR CRIMES IN INDIA:
a developing country like India, the presence of white collar crimes is not
unusual. Controlling and preventing these crimes is a vital problem. The main
reasons which are observed to be behind the increase of such crimes are as
These crimes are committed because of
the greed of the people to have more. These are generally committed by people
of high standing and having secured financial status.
The emergence of new cutting edge
technologies and developments, political pressures and increasing competitions
has led to the white collar criminals to prosper.
Because of the expanding internet
facilities it becomes very hard to trace and locate the criminals.
There is no special legislation on white
collar crimes in our country due to which it has trended up.
Most of these criminals go unpunished
because of the high standing of these people and their cordial relations with
the politicians and ministers.
is easy to conclude that due to advancement of science and technology newer
form of criminality known as white-collar crimes has arisen. The provisions of
Indian Penal Code and other laws dealing with white-collar crimes should be
amended to enhance the punishment and to make these offences of substantive
nature. With white-collar crimes on the rise, what we need is the strengthening
of our enforcement agencies and Speedy trial should be arranged and Special
Tribunals should be constituted. Convictions should result in heavy fines and
penalties rather than arrest and detention of white-collar criminals. Public vigilance
to be improved by creating public awareness about these crimes through the medium
of press, and other audio-visual aids and legal literacy programs should be
organized. In India there is a need for strengthening of morals particularly in
the higher strata and among the public services departments. Unless the people
strongly execrate such crimes, it would be a hard to do task for controlling
this growing menace.