CS Saibal C. Pal, Advocate*

1. IntroductionSaibal C. Pal

Breaking of law is said to be crime. One who commits a crime is referred to as criminal. The criminal law administration mainly cerntres around the Indian Penal Code,1860 ( `IPC’) and the Criminal Procedure Code,1973 (`CrPC’). Crime is concern to society. Every country world wide works overtime to control crime. But crime is being committed world wide in geometric proportion. According to Aristotle  , `Poverty is the parent of revolution and crime.’ To-day crime is distinguished by colour i.e.. blue collar crime and white collar crime. Taft said , ` No- collar crime is a crime of under privileged; white collar crime is upper or middle class crime.’ Crime means breaking the law. However, White Collar Crime (`WCC`) cannot be wholly separated from other crimes on class status. .

Press digital and print media inform the society on crimes being committed world wide. Report on white collar crime having considerable impact on society featured it is about theft of confidential document from the Petroleum & Natural Gas Ministry, New Delhi which caused the Police to arrest of 7 to 12 persons on the charges of leaking crucial papers including input for , the budget speech pertaining to the year. 2015. Six leading companies featured in the list. Executives of the companies were arrested. Police informed that Executives of the companies received stolen documents which were recovered by the Police team. The accused are charged with Ss 120B ( Criminal Conspiracy) and 411 ( dishonestly receiving stolen property) of the IPC. Further the accused are charged with the violation of the Official Secret Act, 1923. The State have filed FIR under Ss 457 (trespass), 380 (theft), 468 (forgery for the purpose of cheating), 467 ( using genuine forged documents), 120B( criminal conspiracy) and 34 ( common intention) of the IPC. It is a paradox that the companies are all listed companies committed to clean corporate governance as per the listing agreement entered with the Stock Exchanges. This shows that some basic elements of human values cannot be enforced by law alone.

India Inc, has not reacted sharply to the reported incident . Such incidents are not new. Ministries, Tax Authorities, Banks, Regulators were reported to have given competitive advantage to corporates with deep pockets. In order to obtain competitive edge, competitors entered into corporate espionage. Espionage in corporate sector existed long since . In 2007 Tata Communication filed complaint against its then Managing Director’s Secretary who was caught sending Board Meeting agenda to a rival via email. Baring filing charge sheet in the case against the employee Mumbai Police could not make much head way. But have been plethora of laws but such activities continue to thrive. India is a country of paradoxes, it is   interesting to find that the Companies Act, 2013 monitored by the Ministry of Corporate Affairs does not define the word,`Corporate’.

Another report stated that the Police had unearthed a place which printed fake currency notes in the heart of Kolkata . Foreign currencies including US$ were being printed from the place. Investigations are on. In another case the organization filling ATMs with cash were found to put in short cash. The above are all economic offences and are referred to as white collar crimes and they pose threat to society . White collar crime unlike crimes like battery and murder do not end with the act. They can not only affect a country but other countries also.

Crime whether blue collar of white collar is governed by the Code of Criminal Procedure,1973 (`CrPC’) is initiated by the State on an FIR ( First Information Report) recorded with a Police Station. An FIR is a printed form available with a police station stating the gist of the complaint. An FIR includes facts of the incident reported with the names of persons (accused) if the complainant names them. The Police Station on recording the complainant records the sections of IPC under which the case would be started. .

Police registers an FIR only when at least one of the sections under which the case is to be started is cognizable (arrest allowed without court warrant). If there is no such section , a general diary (GD) is registered. An FIR is court property. It must be submitted to the relevant court within 24 hours of registration of the complaint. A GD serves as a departmental record for future reference. Complainant can the Police Station to record the GD as FIR citing the act as a cognizable offence. While registering recording the GD, Police amy ask the complainant to file petition before the Criminal Court under S 156(3) of CrPC for considering the facts mentioned in the GD as FIR. The Hon’ble Judge will consider and issue order. Police is bound to register a complaint even though they suspect allegations of the complainant to be untrue. Also, Section 157 of the CrPC empowers the officer in charge of the Police Station not to investigate the complaint.

S 438 of CrPC empowers a citizen to seek anticipatory bail from the Court. Fate of the petition is, of course, decided by the court. Government can play a role by asking the prosecution to oppose the petition for anticipatory bail.

Arrest is not mandatory even after an FIR is registered at the Police Station. Police may arrest if investigation suggests the allegations to be prima facie true. S 41 of CrPC empowers Police to arrest any person without a complaint being filed with the Police Station. Courts have ruled that incarceration should be the exception and the norm. Arrests are made only when a there are chances for a suspect too flee or there are chances of tampering evidence or cause for potential damage to life and property.

In case of FIRs in defamation cases, a defamation suit has to be filed before the court by the alleged victim. In case the section of IPC dealing with punishment is slapped, it has to be supported by some other section of cognizable nature. In an instant case involving cyber law, apart from defamation ( S 500 -punishment for defamation ) was supported by S 509 of IPC ( act intended to insult the modesty of a women).

In case Police finds that there is an arrest was wrongly done, as per S 173 of Cr PC Police can declare in their report before the Court that though preliminary investigation had suggested a person’s involvement, he should be discharged owing to want of evidence.

Crimes cost much to the exchequer. In 2013, internet frauds alone cost India 4 billion US$ ( Rs 24,630 Crore). Criminals use sophisticated means like ransom ware spear-phishing to commit the crime. As per the National Crime Records Bureau data in 2013 as many as 66.40 lac criminal complaints were received by police stations across the country. India had 12700 odd Police Stations with about 15.70 lac policemen manning them. Incidents of crime are spiraling. Crime is required to be handled through scientific methods like the west. Nation wide, Police, the first ring of criminal justice system, is in a pitiable state nation wide. Judicial system is also not ` far behind in fulfilling its constitutional obligations and meeting the expectations of its citizens of delivery of timely justice.’ The jails, juvenile, justice boards, child welfare committees and forensic labs all need to be brought out of the present state. Police force needs modern education and training in combating fighting crime.   In India no empirical study has been conducted as to how much a criminal case costs the exchequer at the tax payers right from registration of FIR to its logical conclusion post the trial in sentencing the accused.

White collar crime needs particular attention due to its impact on all levels.

2. Common forms of White Collar Crimes.

Common forms of White Collar crimes are :

1. Fraud, 2. Bribery 3. Aiding and abetting criminals 4. Burglary 5. Misuse of powers 6. Fraudulent advertisement 6. Misuse of powers 7. Misuse of public fund. 8. Unfair labour practice 10. False certificatation, evasion of Direct and Indirect Taxes 11. Mis-statement and misrepresentation 12. Black Marketing 13. Concealment of truth; and 14. Other offences are either hidden or are not prosecuted due to external pressure 15 Cyber Crimes; and 16. Illegally dealing with Intellectual Property ( Patent, Trade Mark, Copyright and design)

White collar crimes effect the society seriously as it affects economic factors . Important among such crimes are :

  1. Fraud : Fraud has out paced crimes of violence. Fraud is prevalent inter alia in trade, insurance, legal profession, private educational institutions and medical profession. According to Sutherland, murders are committed, houses are burned, automobiles destroyed and sickness and injury feigned in order that insurance may be collected. Fraud in the these cases seldom result in prosecution. In cases of grave importance clients conceal truth to win cases. Similarly in private educational institutions there could be practices of misapplication of funds.
  2. Bribery : Bribery is also a form of white collar crime. However, low percentage of arrests made compared to the occurence. Sutherland and Cressey remarked: “ Bribery of public officials is a crime both for the bribe-taker and the bribe-giver..
  3. Corruption : Corruption is a form of white collar crime. It is prevalent. Ann Hazare took up the issue of curbing corruption throough the enactment of the Lok Pal Act.
  4. Aiding and Abetting Criminals – There are number of persons who in the course of their occupation, aid and abet criminals.

It is thus evident from the above description that white collar crime is prevalent in most occupations. But its presence is felt in the business world. Sutherland and Cressey observed as follows:

The people of the business world are probably more criminalist in this sense than are the public of the slums. The crimes of the slums are direct physical actions – a blow, a physical grasping and carrying away the property of others. The victim identifies the criminal definitely as a particular individual or group of individuals. The crimes of the business world, on the other hand are indirect, devious, anonymous and impersonal. A vague resentment against the entire system may be felt, but when particular individuals cannot be identified, the antagonism is futile. The perpetrators thus do not feel the resentment of their victims and the criminal practices continue and spread. “

Steps to fight white collar crime is on and many companies are adopting measures to avoid being victim of espionage. Setting up top management offices away from regular employees access,, holding Board Meetings at secret locations are instances.

2. Characteristic of White Collar Criminals

Sutherland lists some basic characteristics of White Collar Crimes:

i) White Collar Crimes usually concern the higher strata of the society.Crimes are committed in the course of their occupation.

ii) Arrest of white collar criminals is frequently avoided due to economic and political influence. There are no arrests for copyright violation in most states of the country.

iii) White–collar criminals escape being booked by Police Stations due to economic and other reasons. .

iv) White collar criminals are present in every sphere of social life. But they specially dominate the business and political worlds.

v) The main aim of white-collar criminals is economic gain. They are focused towards economic factors.

vi) White-collar criminals do great harm to public property and social institutions.

The above list is indicative and not exhaustive.

Causes of White Collar Crime

Various factors influence white collar crimes. Main among them are as follows:

1. Drive of Profit. – White-collar crimes are committed mainly for economic gain. For this purpose, the perpetrators of the crime adopt illegal practices.

2. Desire to beat competition – Whte collar crime is also an expression of desire to beat competition and surge ahead . Gaming interest has come dominate our modern life. In order to beat competition in the economic field, frauds and bribery are committed.

3. Limited scope of legislation – Modern legislations dealing with such crimes are limited in their scope. Therefore, in the most cases, white collar criminals cannot be legally prosecuted. The Information Technology Act,2000 amended in 2008 is in place to counter cyber crime but its implementation is poor compared to the number of cases mainly due to lack of trained work force to meet the challenge in the field.

4. Lack of developed social feeling – In addition to above factors lack of spread of ethical code across , cause such crimes. Public indifference is also the cause of such crimes.

4.Cases of White Collar Crimes.

Securities scam ( Harshad Mehta fame) in 1992 was a major white collar crime which changed the securities market. Prudential Capital involving NBFCs was a major financial scam. Ketan Parekh Scam popularly referred to as the dot.com bust in the year 2000 involved the securities market.

The case of Satyam Computers involving Rs 7000 Cr is one of the largest corporate crimes in recent times. Satyam had cooked its books of accounts for several years inflating its revenues and profits. It was a land mark white collar crime.

Sharda financial scam is a major scam that was busted in 2013. Several companies duped investors due to the loop holes in the laws.

Sahara has also faced the onslaught with their chief being behind bars.

One of the major areas which need to be countered is Non-forming Assets of banks. Willful defaulters of loans availed have to be taken to task.

5. Conclusion

Crime is an offence and person who commits a crime, receives legal punishment. White collar crime is a crime and is unique in its features. Each such crime has its own distinctive features. White collar crimes cause great injury to society, yet the perpetrators escape punishment due to weakness in administering the prevalent laws in combating the crimes.   Various factors are responsible for such crimes and general apathy is considered the major factor of such crimes. Need of the hour is to take the bull by the horn to fight the menace of white collar crimes.

Copyright & publishing rights with author.

Edited by : Soubhik Chakraborty, Advocate

A.Roy Chowdhury

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