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White Collar Crimes in India

White-collar crimes are committed by individuals who hold an important position in a company and enjoy high social status during the course of their occupation or professional time period. These are non-violent in nature yet pose a great threat to the economy of a nation. Such crimes are quite prevalent in third world countries as there is misuse of power at higher authorities that limit the regulation on such illegal activities.

Economists in the past as well as the present have stated that white-collar crimes do more harm to the society in comparison to other crimes as these tend to affect the general population by toying with their hard-earned money. India is a developing nation aspiring to stand at the centre stage of the world along with developed nations like US and China.

To achieve this goal, it has allowed interested parties across the world to invest in its businesses making the consumers more vulnerable to crimes like these. India looked at an accelerated 80% growth in white-collar crimes in 2019.

What are White-Collar Crimes?

Criminologist Edward Sutherland coined the term white-collar crimes in 1939. White-collar crimes are those which, principally, violate the implied trust. This can, majorly, be done by two methods, the first being duplication in order to manipulate power and secondly, asset values being wrongfully represented. Both of these methods incorporate breaking the trust of the victim for personal gain causing the victim to bear with physical, as well as, psychological losses.

Why is there an increase in White Collar Crimes in India?

India has a very evident economical divide between its social classes, rich and poor. There is a huge chunk of population that is uneducated and is below poverty line that causes lack of awareness and being more susceptible to white-collar crimes. In addition to this, lack of proper implementation of laws and personal factors like greed and competition among peers are some factors involved.

Some of the many reasons augmenting the growth of white-collar crimes in India are explained below:

  1. Lack of Strict Laws: Though India already has laws against financial fraudulence, these need to be made more stringent to penalize offenders. Perpetrators tend to exploit loopholes in the existing laws and getaway successfully. Furthermore, with the government promoting Digital India, internet has become the most popular form of monetary transactions presently, giving a boom to cybercrimes which are a form of white-collar crimes. India still does not have ironclad cyber security laws
  2. Greed: It is believed that there is greed inbuilt in the nature of man. It states true in the cases of white-collar crimes as these are mostly committed by people already part of high society circles with so much wealth that already cannot be accounted for. The greed in them makes them commit crimes and steal money from the pockets of honest tax payers.
  3. Lack of Awareness among General Population: People who fall prey to white-collar crimes often fail to make sense of the nature of the crime that has been committed and are unaware of the procedures to be followed in order to register a complaint against such offence. Sometimes the offenders sit at very powerful positions at out of reach institutions forcing victims to choose silence over standing against them. Then there�s existence of double-dip scams in which a victim�s information might be stored and passed on to other scammers.
  4. Modern Technology: Advancing technology has helped us ease our day-to-day chores and also the ease to commit crimes. White-caller crimes has reached a wider audience with the help of internet and technology. Criminals are able to explore new ways of committing illegal activities. Bank frauds are done with a single click on some link. This posing a great threat to people's privacy and financial assets.
  5. Biased Law: As white-collar criminals are mostly those who hold certain authority in institutions, they tend to escape their punishment through strong contacts with government officials and politicians that influence the country's legal system. Corruption is also one evil that cripples the system and judgements are made in favour of the powerful even if they are the offenders. Bribes are used at all levels of investigation and the offenders go free. The victims tend not to report offences for that matter as they lose faith in law and order.

Types of White-Collar Crimes:

White-collar crimes have many forms, they come in different categories, with different characteristics and impacts.

Some of these are listed below:
  1. Fraud: By definition a fraud is an intentional deceptive action taken by the perpetrator for their own unjust gain. One of the most common type of frauds in India are bank frauds which include getting loans approved falsely, stealing cheques and by imitation of financial institutions over calls or internet. Activities like pyramid or Ponzi schemes, identity theft also fall in the category of frauds.
  2. Embezzlement: The act of embezzlement is practiced under the shield of trust. When a person starts using the money or property that has been entrusted upon him in a manner that is illegal and not designated to, it becomes a criminal breach of trust according to section 405 of IPC.
  3. Money Laundering: When a person is successful in disguising illegally obtained financial assets as funds obtained from legal sources, a money laundering crime has been committed. Section 3 of the Money Laundering Act of 2002 defines it.
  4. Insider Trading: Taking advantage of privileged access to inside information of a company that is unavailable in the public domain by buying or selling stocks or manipulating other financial instruments to make profit is called Insider trading and it is illegal.
  5. Tax Evasion: Evasion of tax is a punishable offence under the income Tax Act of 1961. It could be practiced by an individual or a whole institution. It is the act of escaping or avoiding paying taxes by illegally forging state of affairs so that the amount of tax to be paid can be lessened. Tax evasion is basically robbing a nation of the money that is used by the government to help pay for the country's expenses and growth. It is penalised in situations of failure in filing of income tax returns, providing false information, concealing of owned assets.
  6. Counterfeiting Currency: Section 28 of IPC defines counterfeiting as a criminal act. It is the practice of imitating something that is authentic like coins and currency or even items like clothes, bags, shoes among others.
  7. Cybercrimes: With India moving towards digitisation in every sector, cybercrimes have become very common. Any crime that uses computer as a means, coupled with internet comes under the category of cybercrimes. These include child pornography, cyber stalking and harassment, and cyber terrorism.

Effects of White-Collar Crimes:

White-collar crimes can impact its victims in various ways. They can cause heavy losses for companies forcing them to increase product prices, laying off employees or deducting salaries in order to recover. This in turn affects the end users and the nation's economy. With rising cases of white-collar crimes, consumers have started having trust issues on the authenticity and safety of the products or services they tend to use which has a negative impact on market demand.

White-collar crimes can affect the victims mentally and psychologically, making them feel helpless, causing suicidal tendencies as many of them incur unbearable losses. These crimes shake the very roots of the economy on which a country is surviving.

Prevention and Punishment:

Prevention of white-collar crimes can be a great challenge in front of the government and society.

However, certain measures can be adopted to prevent them, such as:
  • Government campaigns for increased awareness among general public, the more informed they are, the lesser they will fall into fraudulent scams and traps.
  • Proper up to date professional training of government officials to educate them on how to deal with offences like these.
  • Investigating agencies should make use of strong policies to regulate illegal flow of money and profits made by institutions and businesses.
Punishing offenders for white-collar crimes is a difficult task as, in most cases, the nature of the crime does not allow any evidence or eye witness to be produced. A crime that is undetectable cannot be prosecuted. However, there has been significant progress made by our government and law enforcement agencies in punishing offenders of white-collar crimes. Various legislations have been passed to curb these crimes such as The Indian Penal code (1860), SEBI Act (1992), Information Technology Act (2005), Central Vigilance Commission Act (2003), Income Tax Act (1961) and various others.

White-collar crimes have become a significant problem in India, and they have a detrimental impact on the country's economy and development. The government and regulatory bodies need to take proactive measures to prevent these crimes and prosecute those responsible for committing them.

Strengthening the legal system, improving the regulatory framework, increasing awareness, and implementing whistle-blower protection are some of the steps that can be taken to prevent white-collar crimes in India and create a more transparent and accountable business environment. It is important to note that preventing white-collar crimes requires a coordinated effort from all stakeholders, including the government, regulatory bodies, businesses, and the public.

Recent white collar crime cases in India:
  1. Abhay Singh Chautala v. C.B.I.
    There were two appellants in the present case against whom a charge sheet was filed for committing an offence under Section 13(1)(e) and 13(2) of the Prevention of Corruption Act, 1988 read with Section 109 of the Indian Penal Code, 1860 in separate trials. It was alleged that both the accused had accumulated disproportionate wealth as per their income when they were they members of the Legislative Assembly.

When the Central Bureau of Investigation (CBI) initiated its investigation, it was found that the father of the appellant had acquired huge properties and same as the case with the appellants. The High Court held that the appellant had provided a totally different office(s) of the accused than they were actually holding at that time. Thus, the sanction under Section 19 of the Prevention of Corruption Act, 1988 was held to be without any merit.

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