Corruption, fraud, and bribery are some of the most common white collar
crimes in India as well as all over the world. Cybercrimes are increasing
because there is only a little risk of being caught or apprehended. India's rank
on Transparency International's corruption perception index (CPI) has improved
over the years.
In 2014, India was ranked 85th which subsequently improved to 76th position in
2015 because of several measures to tackle white collar crimes. In 2018, as per
the report of The Economic Times, India was placed at 78th position, showing
animprovement of three points from 2017, out of the list of 180 countries.
India is a developing country and white collar crimes are becoming a major cause
for its under development along with poverty, health, etc. The trend of white
collar crimes in India poses a threat to the economic development of the
country. These crimes require immediate intervention by the government by not
only making strict laws but also ensuring its proper implementation.
White-collar crime is a non-violent crime where the primary motive is typically
financial in nature. White-collar criminals usually occupy a professional
position of power and/or prestige, and one that commands well above average
compensation.
(The Prevention of Money Laundering Act, 2002 (PMLA) is the cornerstone of
India's legal system, which was established to prevent white-collar crime and
fight money laundering)
Introduction
White collar crime is a type of crime committed by persons from upper-class
backgrounds who are members of a recognized social group these crimes are
perpetrated as a result of their employment.
People that perpetrate this crime often have a superior awareness of the people
they are working with technology their area disciplines and so on.
White collar crime has developed dramatically overtime these crimes are
committed in massive organizations that engage in a variety of activities these
crimes are typically committed in industries such as trade, business, health,
education and a variety of organization
Offences a whole can be classified as conventional crimes and non conventional
crimes. Conventional crimes are those traditional, illegal behaviors that most
people think of as crime which includes murder, rape, assault, robbery, burglary
and theft. Most crime is conventional crime. Non-conventional crime, may be
White-Collar Crime, Blue-collar Crime, Pink-collar Crime, Political Crime,
Corporate Crime, Occupational Crime etc. In non-conventional crimes there is an
absence of mens rea.
Historical Background
Since sociologist Sir Edwin Sutherland first characterized white-collar crime in
1939, it has been associated with clever, educated, and rich individuals. He
characterized them as "a crime done in the course of one's employment by persons
of respectability of high social rank". He stated that wrongdoer is someone who
has been interested with a great deal of faith and trust, and that perpetrators
of this crime are those who have been entrusted with a great deal of faith and
trust.
Related to the corporate sector white collar crimes are defined as nonviolent
crimes, committed by businessmen and government professionals. In simple words,
crimes committed by people who acquire important positions in the company are
called white collar crimes.
It is stated that crimes have existed since human beings first begin to live
together. There are a variety of crimes that have evolved over time, including
some that have taken on new aspects as a society has become more Contemporary.
According to an ancient Vedic book, the notion of white collar crime has been in
civilization from the dawn of time.
Difference between white collar crime and blue-collar crime
The term 'blue collar crime' came into existence some time in the 1920s. The
term was then used to refer to Americans who performed manual labor.
These worked for a low wage on an hourly basis.
White collar crimes have been prevalent since centuries and it is not new to all
types of businesses, professions and industries.
The difference between 'blue collar crimes', which are crime of a general
nature
'White collar crimes' was laid down by the Supreme Court of India in the case of
State of Gujarat v. Mohanlal Jitamalji Porwal and Anr. Justice Thakker
elucidated that one person can murder another person in the heat of the moment,
but causing financial loss or say committing economic offences requires
planning. It involves calculations and strategy making in order to derive
personal profits.
These are the characteristics of white collar crimes which distinguish it
from other crimes of general nature:
Blue-collar crimes refer to people who work physically, using their hands,
whereas white collar crimes refer to knowledgeable works, who use their
knowledge to commit crimes.
New v/s Traditional
Where blue-collar crimes refer to traditional crimes that have been committed
since ages, the concept of white collar crimes has recently developed. It's a
new species of crime.
Mens rea
To constitute a crime element of mens rea and actus reus is must. Where mens rea
is an essential element of blue collar crimes, its involvement in white collar
crimes is not necessary.
Independent of social and personal conditions
White collar crimes have no relation with the social conditions, like poverty,
or personal conditions of the offender albeit it matters in the conventional
nature of crimes.
Involvement of politicians
In many cases it has been found that the offenders have strong connections with
politicians and sometimes, politicians are also involved in committing the crime
thus making it difficult for the victims to take action against such offenders.
Causes of white collar crime
- Lack of Awareness:
Because white-collar crimes differ from typical crimes in their method,
victims frequently misunderstand them and are readily duped by offenders.
- Greed:
Because white-collar crimes differ in strategy from traditional crimes,
victims usually misunderstand them and are easily fooled by perpetrators.
- Not a really a crime:
Because these activities lack the violent characteristics that define
typical crimes, the perpetrators or offenders frequently convince themselves
that they are not crimes.
- Necessity:
Not generally, but occasionally, such crimes are committed as a last
alternative to overcome financial difficulties in sustaining their families.
The satisfaction of one's ego:
- The offenders often commit such acts to satisfy their ego and impulse.
- The lack of proper implementation of laws in this regard
- The inability to enforce existing rules in a stringent manner frequently
leads to the emergence of such activities.
Criticism
Coleman and Moynihan pointed out that Edwin Sutherland's definition had certain
ambiguous terms. It has not laid down any criteria for who these 'persons of
responsibility and status' would be.
Also 'person of high social status' is not clear. It is perplexing as the
meaning of the phrase in law could be different from its general definition.
Sutherland's definition did not take the socio-economic condition of the person
into consideration. It only showed the dependency of white collar crimes on its
type and the circumstances in which it was committed.
Mens rea, i.e. guilty mind and actus reus, i.e., wrongful conduct are two
essential elements to constitute a crime.
However, Sutherland's definition implies that according to him white collar
crimes does not necessarily require mens rea.
Types Of White-Collar Crime
- Fraud
Fraud is a broad term that encompasses several different schemes used to
defraud people of their money. One of the most common and simplest is the
offer to send someone a lot of money (say, $10,000) if they will simply send
the fraudster a little money (say, $300 - the fraudster may represent the
smaller sum as being a processing or finder's fee). Of course, the fraudster
gets the money that is sent to him but never sends out the money he promised
to send.
- Insider trading
Insider trading is trading done with the benefit of the trader possessing
material, non-public information that gives him or her an advantage in the
financial markets.
Insider trading can be either unlawful or legal, depending on when the
incident or transaction occurred.
The sensitive information discussed in the definition of insider trading is
knowledge relating to the company's private and confidential affairs that
has been kept a secret for whatever reason, unknown to lower-level
management.
Insider trading is the activity of exchanging securities by someone with
substantial non-public information about a company's security or critical
operations. Insider trading can be either unlawful or legal, depending on
when the incident or transaction occurred.
- Identity theft and other cybercrimes
Identity theft and computer system "hacking" are two of the most widespread
computer crimes. As the use of computer and internet is increasing, so is
the crime related to it. The crimes which involves the use of computer,
coupled with the use of internet are called cybercrime.
It is where the computer is used as the object of the crime or as a tool to
commit an offence.
Categories of cybercrime Property, individual, government etc
- Embezzlement
Embezzlement is a crime of theft, or larceny, that can range from an
employee taking a few dollars out of a cash drawer to a complex scheme to
transfer millions from a company's accounts to the embezzler's accounts.
- Counterfeiting
Money has become more colorful and expanded in detail because it had to in
order to combat counterfeiting. With today's computers and advanced laser
printers, the old currency was just too easy to copy.
- Money laundering
Money laundering is a service essential to the needs of criminals who deal
with large amounts of cash. It involves funneling the cash through several
accounts and eventually into legitimate businesses, where it becomes
intermingled with the genuine revenues of the legitimate business and is no
longer identifiable as having originally come from the commission of a
crime.
- Bank fraud
Bank fraud can be committed in two ways:
- By using illegal means to withdraw money or assets from the bank or any
financial institution.
- By falsely representing oneself to be a bank or any financial
institution, the person extracts money or assets from people.
What are the Punishments for White-Collar Crime in India
The Constitution of India provides the following provisions for sentencing
white-collar criminals.
- Punishment for a False Statement
Section 448 of the Companies Act 2013 mentions that an individual who
deliberately makes a false statement or knowingly confides in any fact will be
held liable.
- Punishment for Fraud
Section 447 of the Companies Act 2013 penalises the act of fraud. If a person is
found guilty of committing fraud, he will face imprisonment from 6 months to 10
years. The fraudulent party must also pay a fine equal to or three times more
than the fraud amount.
In case of fraud committed against the general public, imprisonment shall not be
less than three years.
Case laws
Kanwarju Singh Kakkar v. State of Punjab
The Supreme Court of India in Kanwarju Singh Kakkar v. State of Punjab and Anr,
has held that the demand or receipt of fee by a medical professional for
extending medical help by itself cannot be held to be an illegal gratification
as the amount so charged is towards professional remuneration. So the offence
u/s 168, IPC cannot be said to have been made out as the treatment of patients
by a doctor cannot by itself be held to be engagement in a trade. However, the
said act may fall within the ambit of misconduct to be dealt with under the
Service Rules.
State of Gujarat v. Mahesh Kumar Dheerajlal Thakka,
the Supreme Court has held that private practice" cannot be termed as 'trade' as
accepting of 'fee' does not involve profit making, which is an essential
ingredient of the term "trade".
So we may conclude that if public servants were allowed to engage in trade they
would not be able to devote their undivided attention to their official work.
Conclusion
White- collar crimes have two surprising features, first, that they are
non-violent crimes, though the criminals have the tendency to gain control or
have a sense of entitlement, and, second, that they are committed by people in
the higher profession.
White collar crimes are frequently unreported, and the media may play an
essential role in this area by becoming more active in publicizing and exposing
scams and frauds, as well as making efforts to educate the public about white
collar crimes and the fines and penalties associated with them. As a result, the
government should not be tolerant when it comes to social-economic offences. To
reduce the rate of white collar crime in India, appropriate legislation and
strong restrictions should be enacted.
However, similar crimes are also perpetrated by low-paid underlings, even if the
mastermind behind the crime is a wealthy individual with a higher social rank in
his profession. White collar crimes are frequently perpetrated as a result of
peer pressure or as a result of the company's culture.
The government must make laws that are strict enough to reduce the commission of
such crimes. And the system should be such that not only there exist laws giving
strict punishment to the accused but also dispose off maximum cases in a short
while.
As our civilization progresses toward modernity and the globe gains new
technical advancements, the rate of crime rises at a quicker pace. The increase
in white collar crime, in particular, has been significant. These crimes are
done everywhere, from the medical profession to educational institutions.
If the media becomes more active towards publishing frauds and scams at higher
levels and revealing how do the people at higher position in a company use their
powers arbitrarily, and also make efforts in making people aware about the white
collar crimes, and avoid corrupt practices, then this would definitely help in
reducing the rate at which the white collar crimes are being committed.
Award Winning Article Is Written By: Ms.Yashika Malhotra
Authentication No: MY312267567124-2-0523 |
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