B.A. LL.B. (Five Years) Sem 10 White Collar Crimes 2013 Jun Question Paper with Solutions

For full marks, cover: the source of the quotation (Edwin Sutherland's definition of white collar crime, his presidential address of 1939 and his book of 1949) and his purpose (to refute theories of crime built on the poor; the study of the seventy largest American corporations); the definition taken phrase by phrase, each with an Indian illustration (Ramesh Gelli, K. Veeraswami, Jacob Mathew); its merits; its criticisms (Tappan's legal objection; vague status; defined by the offender, not the offence; occupational and corporate crime mixed; companies as offenders, Standard Chartered; too narrow for public office and politics); the Indian reworking (Santhanam Committee 1964; Law Commission's 29th and 47th Reports; socio-economic offences; privileged class deviance; Swami Achyutanand Tirth); a balanced assessment.

2. "Committed by a person". The offender is an individual, though he often acts for an organisation. In Central Bureau of Investigation, Bank Securities and Fraud Cell v. Ramesh Gelli, decided on 23 February 2016, the chairman and officers of a private bank were prosecuted under the Prevention of Corruption Act. The Court held them to be public servants for the purposes of that Act.

3. "Of respectability and high social status". The offender is respected, and that respect is what makes the offence possible and its detection unlikely. In K. Veeraswami v. Union of India, (1991) 3 SCR 189, a former Chief Justice of a High Court was prosecuted for assets disproportionate to his income. No status could be higher, and the Court held that even such a judge is a public servant under the corruption law.

4. "In the course of his occupation". The offence must arise from the occupational role, which supplies the opportunity. A rich man who murders his wife is not a white collar criminal. A doctor who falsifies a certificate is. The law of medical negligence shows how the occupation shapes liability. In Jacob Mathew v. State of Punjab, AIR 2005 SC 3180, the Court held that a doctor is criminally liable only for gross negligence in his professional work.

Merits of the definition

3. It defines the offender, not the offence. Criminal law defines offences by acts and intentions, not by the class of the person. Later writers therefore preferred to define white collar crime by its method: non-violent offences of deceit, concealment or breach of trust, whoever commits them.

4. It mixes two different things. Embezzlement against the employer and price fixing for the employer have different motives and victims. Later writers separated occupational crime from corporate crime.

5. It overlooks the company as offender. Much modern white collar crime is committed by corporations. In Standard Chartered Bank v. Directorate of Enforcement, (2005) 4 SCC 530, a bank was prosecuted under the foreign exchange law. The offence carried mandatory imprisonment and fine. A Constitution Bench held by majority that a company can be prosecuted and fined even then. Sutherland's "person" does not fit this easily.

6. It is too narrow for public office. Corruption by Ministers, legislators and officials is not done "in the course of an occupation" in the ordinary sense. It is done in the exercise of public power. Political deviance and the politician-criminal nexus fall outside the definition.

The courts treat these offences as grave even when committed by small traders. In Swami Achyutanand Tirth v. Union of India, (2016) 9 SCC 699, a petition exposed milk adulterated with urea, detergent and caustic soda across several States. The Supreme Court ordered laboratories, sampling drives and complaint mechanisms. It also noted that some States had raised the penalty for food adulteration to life imprisonment. Many such offenders are neither respectable nor of high status, yet the harm is the same.

A balanced assessment

Sutherland's definition is best understood as a sociological concept, not a legal definition. As a concept it was revolutionary. It showed that crime is spread across classes and that the response to it depends on who commits it. As a legal tool it is imprecise. It turns on status, ignores corporations and does not fit public office.

Modern law therefore defines offences, not offenders. Examples are the Prevention of Corruption Act 1988, the Prevention of Money-laundering Act 2002 and the food safety and essential commodities laws. Many of these use strict liability, presumptions and corporate liability. The spirit of Sutherland's definition survives in them: the powerful must not escape the criminal law because of who they are.