“This article addresses the intricacies involved in white-collar crimes while scrutinizing the Indian Legal system”
Introduction:
The term White-Collar crime has been coined by the famous Criminology Professor Edwin H. Sutherland in 1939. His definition included big corporations and legal entities wherein he specifically made the following observation:
“the crime committed by a person of respectability and high social status in course of their occupation”
In common parlance, the White- Collar crimes are those crimes which are committed by the people belonging to higher social strata. In contrast to the conventional type of crimes such as theft, burglary, and arson, these crimes account for abundant violations of law and the loss incurred is on a much higher side. With the economic and industrial growth, White- collar crime is increasing at a tremendous pace in India. The perpetrators of White –Collar crime are the people engaged in lawful businesses, holding respectable positions in the society. The problem is quite acute, both in terms of variety of the activities and the extent of White-Collar criminality. These types of crimes are committed in the regular course of business and involve tax evasion, adulteration of food-stuffs, edibles, and drugs, black marketing, corruption, cyber-crime bribery, extortion, fraud and funds embezzlement etc.
Types of White- Collar Crimes:
The White-Collar crimes may be classified into two classes:
1. Occupational Crime:
The crime committed in the course of legal occupation for seeking personal gain. This type of crime includes crimes such as money laundering, embezzlement, tax fraud, Stocks and securities violations, Altering records (“cooking the books”) and Corruption of government officials
2. Organisational Crime
The crime committed either by a business entity including the corporation or by the individuals acting on behalf of a corporation or other business entity. Some examples of this type of crime are bribery of public officials, manipulation, and misrepresentation of financial documents, commercial bribery etc.
White- collar crimes which more popular among the common jargon are Bank Fraud, Blackmail, Bribery Cellular Phone Fraud, Embezzlement- Counterfeiting, Forgery, Tax-Evasion, Adulteration, Professional crime.
White- collar crimes which more popular among the common jargon are Bank Fraud, Blackmail, Bribery Cellular Phone Fraud, Embezzlement- Counterfeiting, Forgery, Tax-Evasion, Adulteration, Professional crime.
The legal position in India:
The Santharam Committee was formed by the Government in 1964 to check on corruption. The report of the committee stated that the big industrialists, businessmen, government officers are responsible for white-collar crime in India. The committee further observed that:
“Corruption cannot be eliminated or reduced unless preventive measures are been taken and implemented in a proper manner. Preventive measures must include administrative, legal, social, economic and educative measures.”
It is on the recommendations, the committee, the Central Vigilance Commission was set up by the then Central government in 1964. The main objective of the commission was to look into the cases of corruption against the central government.
In 1987, while differentiating between the crimes and white collar crimes, The Supreme Court of India in State of Gujarat vs. Mohanlal Jitamalji Porwal and Anr, AIR 1987 SC 1321 made the following observation,
“murder can be committed in the heat of the moment but these economic offenses are committed with a cool calculation and planned strategy to gain personal profits.”
Governing legislation:
Various regulatory legislation have been introduced by the Government of India to keep a check on the white-collar crime. Some of these legislations are Essential Commodities Act 1955, the Industrial (Development and Regulation) Act, 1951, The Import and Exports (Control) Act, 1947, the Foreign Exchange (Regulation) Act, 1974, Companies Act, 1956, Prevention of Money Laundering Act, 2002. Any breach of the provisions entailed in these Acts amount to white-collar criminality and attracts the penal actions. Also, the amendments introduced in the Indian Companies Act in 2000 and thereafter, Monopolies And Restrictive Trade Practices Act, in 1992 (subsequently repealed by Competition Act, 2002), Insurance and Banking laws, the appointment of Lokpal, Lokayukta and tightening of governmental control over private business groups sufficiently reflect upon the Government’s determination to suppress white collar criminality in India.
The provisions to check financial crimes such as Bank Fraud, Insurance fraud, credit card fraud etc. are contained in The Indian Penal Code, 1860. The government of India has taken several initiatives to prevent money laundering. Several strict guidelines and directions have been issued to the banks under the Know your customer (KYC) by the Reserve Bank of India. It is essential for the banks to maintain the transaction records for a period of ten years.
Furthermore, to tackle the crime related to the computers and technology, the Information Technology Act, 2000 has been enacted. The main object of this Act is to regulate and authenticate the information exchanged while doing commercial transactions. This act also contains the penalties in the scenario where the unauthorized data is downloaded, assessed, copied or the sensitive information related to such data is passed on to third parties.
Alarming stage of White- Collar Crimes:
It must be noted that in India several cases of defrauding the banks have been coming in light. To keep a check and tackle the economic offenders who have taken the shelter in foreign nations, the Central Investigation Bureau (CBI) has formed an “Economic Intelligence Wing”. Some of the prime examples of the economic offenses are the Vijay Mallaya case, Nirav Modi Case. The middle-class taxpayers are ripped of their hard earned money to facilitate the loan arrangements for big corporations, industries, and individuals. This is not an end and the rise of such offenders has reached an alarming stage.
Conclusion
White collar criminals violate trust and create distrust which lowers social morale. Further, these crimes result in social disorganization while other crimes produce the relatively little effect on social institutions. Hence, it is pertinent that these are dealt with strictly as they corrupt the very social fabric.
