White Collar Crimes in India

Introduction:

Famous criminologist and Sociologist Edwin H. Sutherland coined the term “white-collar crimes”. He defined this term as a crime committed by a person of high respectability and high social status in the course of his business or occupation. Thus white-collar crime has the following main components: a) crime, b) committed by a person of respectability, higher social status and legal position, c) in the course of profession or occupation, d) and it is the violation of trust. He also included crime committed by corporations and other legal entities within the ambit of this definition. Sutherland observed that certain professions offer opportunities to engage in unethical conduct and criminal acts which further are overlooked or ignored by society. They commit crimes in their field, profession, trade, and business for their gain. These wrongdoers do not have a criminal background and further, they are not related to hardened ammunition and arms, rather they belong to the privileged positions. In the present situation, white-collar crimes are generally committed in large and complex organizations. The offenders in this field have a sophisticated understanding of finance, management, medicine, engineering, technology, law, etc. These offenders have the least regard for society, ethics, and honesty. Their greed has overpowered all the boundaries of ethics and carries their activity without any fear of punishment, loss of prestige and status. White Collar Crimes are essentially the result of a competitive economy where the world is a profitable business field for the offender.  They are taking full benefits globalization, liberalization, and dismantling of trade barriers to conduct and enhance their deviant activities. In this regard, something needs to be done to control the menace of white-collar crimes before the economy collapses.

White-collar crimes can be divided into two major heads:

Occupational Crime: Crimes committed in the course of legal occupation or business for private benefits and personal gain.  Example includes money embezzlement and laundering, tax evasions, altering the accounts and records/cooking the books.

Organizational Crimes: Organizational white-collar crimes include crime committed by a corporate entity or organization or individuals acting on the behalf of corporation. Examples may include bribing public officials by a person representing the firm or organization, misrepresentation of financial documents by a firm, etc.

Some major and commonly committed white-collar crimes are:

Bank fraud: The purpose is to engage in such activities by which banks can be defrauded of funds. It also involves concealing assets and misleading creditors.

Computer Fraud: Computer Fraud includes stealing important data and information of a person such as credit and debit card details, illegally hacking someone’s computer system, and account.

Telecommunication Fraud: It involves illegally tempering, manipulating, or using cellular phone services.

Embezzlement: It involves misappropriating money or property for one’s purpose.

Forgery: Forgery includes creating and fabricating false and worthless documents and instruments with the intent to defraud.

Counterfeiting currency: It includes making unauthorized copy and imitation of currency notes with the intent to deceive.

Bribery: Bribery involves inducing or giving or accepting gratification to induce or reward public servants and thus gain influence over him.

Tax Evasion: It is frequently committed by firms, business entities where they create loopholes to prevent themselves from paying taxes to the State.

Professional Crimes: It involves crime committed by professionals such as doctors, lawyers, and engineers in the course of their occupation.

Indian Scenaario

White Collar Crimes are prevalent in every part of the world and has become a global phenomenon. Like most of the countries, India is also equally in the tight grip of white-collar criminality. The emergence of white-collar crimes in India can be traced back to the era of British rule and the period of the beginning of industrialization and capitalism. During the colonization period of India, white-collar crimes were confined to the embezzling of money kept in district treasury by the officers and bribes taken by the officers. Now, with the recent technological developments and advancements, the dimension of new collar crimes have enlarged. The dimensions of white-collar crimes are now extended to computer fraud, cyber crimes and the areas which are severally affected by such white-collar cyber crimes are banks, telecommunication, financial institutions, Government Bodies, etc.,

White Collar Crimes in the Legal Profession

Liberalization, Industrialization lead to growing business nexus among, stocks, banking, insurance, and other company-related matters thus giving rise to the legal technicalities and intricacies in relation to property rights and other different legal matters. Corporate entities and firms were strongly pursuing their economic interest and were looking for legal loopholes to hide their illegal conduct. Advocates who took the oath to serve the interest of society instead dedicated their legal knowledge to find legal loopholes to serve the interest of wealthy businessmen. They find various ways of tax-evasion, fabricating of evidence, witness tampering, and various other unethical practices to protect the rich entrepreneurs. The instance of white-collar crimes can also be found among the community of judges who in the name of decoding and interpreting the law provides the shield to the rich, privileged people and give them a free pass where they must have been subjected to deterrence and confinement. White Collar Crimes in the legal profession is the biggest tragedy as those who sworn to advance justice in the society are now distributing injustice in the society and wrongly using their position and status given by the State.

The unfortunate instances of white-collar crimes can also be seen in the medical field where medical practitioners can be seen indulged in committing crimes such as the issue of false certificates, merchandising, and promoting medicines and medical drugs of a medical company, carrying out illicit abortions.  Fake and misleading advertisements claiming absolute cure is also prevalent practice in the medical field.

White Collar Crimes in Engineering

The instances of white-collar crimes in the profession of engineering can be seen where engineers misusing their authority and positions enters into a contract with suppliers where they engaged in low-grade work involving, purchasing lower quality of raw materials, allocating a small portion of the budget in construction. These engineers who indulge in such practices make more money than their official genuine work and put thousands of lives at risk to satisfy their greed.

White Collar Crimes in Education

Many Education Institutions are now least bothered about providing quality education to students and instead concentrating to do business and make tons of money at the price of students’ futures. The practices of reserving seats and taking a huge amount of donations from students to provide admission in their institutions generally leads to the injustice to a real and worthy student who actually deserves that seat and thus damaging the quality of education in these educational institutions. Further instances of making false promises of campus placements and fake advertisements of quality education, infrastructure, and high job prospects to lure student community cannot be ignored.

White Collar Crimes in Corporations and Firms

Corporate firms can be regarded as a major source of white-collar crimes. The list of white-collar crimes committed in the corporate world includes entering into illegal contracts, trying to create a monopoly, engaging in trade restraining conspiracies, practicing unfair labor practices and exploiting their labor,  bribing public officials, illegally and forcefully occupying land, selling adulterated drugs and food, laundering money, fraudulent share and investment schemes and the list goes on. Business tycoons and professionals take undue advantage of their corporate veil and indulge in such white-collar crimes. Satyam scam is the apt illustration of corporate white-collar crime where the officials of the Satyam Corporation defrauded crores of money.

Laws Relating to White Collar Crimes in India

India enacted various laws and legislations to keep an eye on white-collar crimes and activities. Some of the major legislations in this regard are discussed below.

PREVENTION OF CORRUPTION ACT: Corruption is the biggest and deadliest virus from which India is suffering for many years. The word ‘corruption’ is very comprehensive in meaning and implies all such acts and activities which are against the law and society. The scope of corruption is very broad and is not confined to any explicit sphere.  Scandals like Commonwealth Games scam, 2G Spectrum Telecommunication scam, Adarsh Housing Society Scam were some of the biggest scandals of India which rocked the whole nation. The Santhanam Committee Report in its finding has presented a vivid image of various white-collar crimes committed by businessmen and other professionals. In order to curb the problem of corruption, India enacted the Prevention of Corruption Act in 1988. The prevention of Corruption Act was introduced to prevent corruption in public and government offices. Section 7 of the Act makes Public Servants liable for imprisonment for taking gratification other than the legal remuneration in respect of an official act. Further section 8 relates to the offense of bribing where any person who gives an undue advantage or induces or rewards public servants to perform their public duty improperly. Commercial Organizations can also be prosecuted for giving or promising to give any undue advantage to public servant under section 9.

INDIAN PENAL CODE (IPC): IPC is considered as the oldest piece of legislation making white-collar crimes punishable in India. Some major provisions of IPC dealing with white-collar crimes are:

1. Public Servant Unlawfully Engaging in Trade: Section 168 of IPC deals with the offense where public servant who is legally bound not to engage in trade, engage himself in trade is liable for imprisonment.  It was a view of drafters of IPC that the public servant engaged in the trade may not give full focus to his official duties and may further use official position to unreasonably gain from trade, thus it was necessary to restrict public servants from engaging himself into the trade.
2. Unlawful buying or bidding for property by Public Servant: As per section 169 of IPC, any public servant who is legally bound not to purchase or bid for certain property, buys or bids for such property either in his name or another is liable for fines, imprisonment or both.
3. Bribery: Apart from the Prevention of Corruption Act, Bribery is also defined under section 171B of IPC as giving or accepting gratification to induce or reward public servants and thus gain influence over him. It is a crime for which both the parties i.e. who is giving the bribe and accepting bribe can be charged and punished.
4. Adulteration: Section 272 and 273 of IPC deals with the offence of adulteration of food and drugs which affect public health, safety, convenience, decency, and morals.  Apart from the provisions of IPC, India enacted the Food Safety and Standard Act 2006 to control the quality of food and regulate practices and conduct of officials involved in the food industry.
5. Counterfeiting of currency: Section 489 A, 489 B, 489 C, and 489 D of IPC protect the currency and banknotes from forgery and punishes the practice of counterfeiting and forgery of currency by imposing fine or imprisonment.
6. Fraud, Cheating, Criminal Misappropriation, and Criminal breach of trust: IPC contains various provisions to check crimes involving bank fraud, insurance fraud, and credit card fraud.  These crimes may come within the ambit of the offense of cheating and criminal misappropriation and criminal breach of trust. Section 403 of IPC deals with the criminal misappropriation of property, similarly section 405 deals with the criminal breach of trust. Section 415 of IPC deals with the offense of cheating.  Along with these, there are insurance and banking laws to keep an eye on white-collar crimes.

INFORMATION AND TECHNOLOGY ACT (IT Act) 2000: To tackle the cyber crimes, the IT Act was introduced to provide legal and authentic recognition of information exchanged while doing commercial transactions.  It also provides penalty and punishment for unauthorized copying and extracting of any data, unauthorized downloading of files, introducing viruses or malicious programs, damaging computer networks, denying access to the authorized person to a computer system.

PREVENTION OF MONEY LAUNDERING ACT: To tackle the menace and prevent the money laundering activities, India enacted the Prevention of Money Laundering Act which comprehensively provides for various measures to keep a check on money laundering activities including confiscation of the proceeds of crime.  Reserve Bank of India also introduced various guidelines to banks and financial institutions to combat money laundering activities such as Know Your Customer guidelines and policies.

Apart from these, there are various other legislations and regulations, the breach of which will be equivalent to committing white-collar crimes like Essential Commodities Act 1955, Foreign Exchange Regulation Act 1974, Companies Act 2013, Industrial Development and Regulation Act of 1951, Income Tax Act.

Conclusion

The threat and danger postured by white-collar crimes to the prosperity of Indian society and the monetary condition of the country cannot be disparaged.  Such white-collar crimes get nourished and flourished by feeble and weak establishments, corrupt and awful authority, and administration. White-collar crime can be regarded as the most exorbitant violations to the society. Professionals and public officials who were required to serve the interest of the public are now engaged in serving their interests. For the developing country like India, white-collar crimes are obstructing the growth of India and pushing India more towards poverty, diseases, and squalid atmosphere.  Various laws and regulations exist in India to address the issue of white-collar crimes such as the Prevention of Corruption Act, Prevention of Money Laundering, Tax-evasion laws, and Indian Penal Code. These laws are required to be properly enforced in their full letter and spirit and with honesty and integrity. There is a need for proper checks and enforcement especially against those who consider themselves immune from the prosecution.