HOARDING, BLACK MARKETING AND ADULTERATION IN THE CONTEXT OF

WHITE COLLAR CRIMES

A SEMINAR REPORT
Presented to
THE ARMY INSTITUTE OF LAW, MOHALI
IN PARTIAL FULFILLMENT OF REQUIREMENT OF DEGREE OF B.A., L.L.B
V YEAR OF THE PAPER III

JAN-JULY (2016)
Submitted by: Rohan Sharma
Class and Section: 5th year, Section B

INTRODUCTION

It is common knowledge that certain professions and public officers offer lucrative
opportunities for criminal acts and unethical practices to the professional & persons
occupying the public offices which hardly, attracted public attention as well as of the
legislature. In the year 1941, E.H. Sutherland propounded the concept of white collar
crime. Sutherland pointed out that besides the traditional crimes such as assault, robbery,
dacoity, murder, rape; kidnapping and other acts involving violence, there are certain
anti-social activities which the person of upper strata carries on in the course of their
occupation or business. These activities for a long time were accepted as a part of usual
business tactics necessary for shrewd professional man for his success in profession or
business.
The term is widely used by both criminologists and sociologists alike, incorporating a
mass of non-violent behaviours related to economic fraud. Beyond that rudimentary
description, there is widespread disagreement and interdisciplinary criticism of the
definition and application of white collar crime. Criminologists, with a focus on the law,
contend that many of the behaviours society believe to be white collar crimes are in fact
not crimes at all. Without a statute to define behaviour as a criminal violation of law,
behaviours could be labeled by individual standards rather than in the context of
community value. An individual evaluation of what is or is not deviant allows for a
subjective approach that softens the scientific objectivity of criminology. Additionally,
the American system of criminal justice was built upon the premise of individual
culpability. This presents difficulties when criminal acts involve a collective. The penalty
phase of a criminal action was never meant to impose sanctions against groups or
organizations. Sociologists contend the term itself is fundamentally flawed. Studies have
shown the vast majority of white collar crimes are carried out by individuals comprising
the middle and lower classes of society, without regard to the colour of their collar.
Sociology views white collar crime not from a statutory or legal definition, but rather as a
class distinction emphasizing the disparity between the treatment of the rich and the poor.

In many cases, the motivation leading to the commission of a white collar crime is
directly related to socio-economic status. The definitional conflict between sociology and
criminology has led to what has been termed sterile definitional disputes. The genesis of
the term is credited to Sociologist Edwin Sutherland in 1939 and simply states that white
collar crime is the abuse of power by an individual, situated in a high place, whereby
virtue of that position they are provided with opportunities for such abuse. This research
has referred to crimes of professional occupations as a behaviour having been statutorily
defined as criminal, committed by an individual who has obtained a professional
occupational position where the trust inherent to that position facilitates the commission
of such crime. Professional will refer to occupational prestige rather than career
criminality. This research has attempted to offer an explanation as to why a professional
practitioner may commit a criminal act facilitated by occupation after living a life of
relative conformity to societal norms.

Meaning and Definitions of White Collar CrimeIn a 1939 meeting of the American Sociological Society, Edwin Sutherland proffered the
term white collar criminal1. He defined the white collar criminal as any person of high
socio-economic status who commits a legal violation in the course of their business
activities.
Sutherlands definition emphasized the offender over the crime and the role of trust and
power in providing the means and opportunity to commit deviant acts. For half a century
since, Sutherlands definition of the white collar criminal has been the subject of much
debate and controversy. Specific criticisms point out his use of arbitrary terms that cannot
be quantified, such as high socio-economic status, respectable and business activities.
Despite of more than fifty years of debate and study, no consensus has been reached,
defining white collar crime is an enigma. The only fact regarding white collar crime is
that no occupation is exempt or untouched by it. One only needs to pick up the paper,
watch the news, or surf the Internet to accept the statement as an axiom. However, an
occupation which society views as a profession may offer those individuals with the
motivation to commit a crime, as well as greater means and opportunity to accomplish
complex schemes that are nearly undetectable to those operating outside the profession.
According to Edlehere An illegal act or series of illegal acts committed by non-physical
kinds of means and by concealment or guilt, to obtain money or property or to obtain
business advantage

1 Sutherland, E. H. (1940). The white collar criminal. American Sociological Review 5, 1-15.

According to Federal Bureau of Investigation Those illegal acts which are characterized
by deceit concealment or violation of trust and which are not dependent upon the
application or threat of physical force or violations.
According to Paul Tappan White collar crime is a special type of solitary professional
criminality. It involves real violation of criminal law systematically or repeated by
business, professional and clerical workers in addition to their occupation.
According to Sir Walter Reckless White collar crime represent the offence of
businessmen who are in position to determine the policies and activities of business.

White collar crime in IndiaIn India White Collar crime means and includes manipulation of funds or in stock
exchanges or misrepresentation in advertising or in financial statements of a corporation
or violations of labour laws, copyright, patent laws etc. which is mainly job oriented i.e.
which occurs during the course of ones occupation but assaulting a personal secretary by
her boss will not constitute as White Collar crime.
While resorting to Sutherland it was very much advent that crimes committed by the
people of High Social Status will amount to White Collar crime. But in India, the
situation is totally different. In India mostly White Collar crimes are committed by the
people of lower social strata in their occupational capacity as adulteration of milk by the
milk man, selling adulterated food by the shopkeeper, selling expired medicine, taking
out few kilos of gas from the cylinder and so on.
While resorting to White Collar crime in India businessmen used to engage themselves in
Tax Evasion and Tax avoidance or violation of the Foreign Exchange regulations by
under invoicing of exports or by over invoicing of imports.
Traders in India were not so far behind in creating an irreparable damage to the society at
large. They have mainly engaged themselves in hoarding, profiteering and black
marketing of the essential commodities. Moreover sometimes for monetary gains they
used to engage themselves in adulteration of foods which may turn dangerous to a
persons life.
To comment specifically on Indian traders for Black Marketing of the essential
commodities, profiteering and Hoarding, Monopolies Inquiry Commission gave a graphic
account of that in the following words as There is hardly anybody in India who has
not been a victim of the practice of hoarding, cornering and profiteering. Whenever there
is a slight shortage even temporary in any consumer goods for which the demand is

urgent and inelastic, almost every trader it is perhaps unnecessary to use the
qualification almost conceals his stock and blindly tells the customers that he has not
got the commodity
in stock...
In the course of their research Prof. Hugh Barlow and Sutherland repeatedly pointed out
that White Collar crime was more dangerous than any ordinary street crime because the
financial loss to the society from White Collar crimes is probably greater than the
financial loss from ordinary burglary, theft or robberies.
According to V. R. Krishna Iyer, J. economic offences often are subtle murders practised
on the community or sabotage of the national economy. So it may be termed as the
White Collar Economic Offences2.
Subsequently thereafter Santhanam committee was asked to report on the misdeeds of the
elites to that corruption can be traced. Santhanam committee gave a graphic account of
the misdeeds of businessmen and industrialists in the following words Corruption can
exist only if there is someone willing to corrupt and capable of corrupting. We regret to
say that both these willingness and capacity to corrupt is found in a large measure in the
industrial and the commercial classes.3
Two instances of embezzlement and fraud as provided by a report made by Vivian Bose
Commission are Notorious Dalmia-Jain and Mundhra case in which loss amounted
were estimated at Rs. 3.5 crores.

In spite of the fact that a large number of economic offences have been unearthed in our
country such as the Securities Scam, Hawala Scam, Urea Scam, Sugar Scam, Banking
Scam, Tele-Communication Scam, Fodder Scam, Stamp scam etc. and an effort from the
government of appointing numerous Commissions as Vivian Bose Commission, Bakshi
2 Hasan Alis Tax Evasion 2010.
3 The Lawyers, White collar economic offence, Oct 2010, pg.no.21.
4 Santhanam Committee Report, pg.no.08.

Tek Chand Committee, parliamentary committee on the jeep scandal, Railway corruption
Inquiry Commission, Sadasivam committee of enquiry, S. R. Ray Commission of Inquiry,
S. R. Das Commission, M.C. Chagla Committee and many more in which thousands of
crores of rupees were involved, surprisingly no offenders have been convicted so far.
Hoarding, Black Marketing and AdulterationThe white collar crimes which are common to Indian trade and business world are
hoarding, profiteering and black marketing. Violation of foreign exchange regulations 5
and import and export laws are frequently resorted to for the sake of huge profits. That
apart, adulteration of foodstuffs, edibles and drugs which cause irreparable danger to
public health is yet another white collar crime common in India.6
The Consumer Protection Act, 1986; the Narcotic Drugs and Psychotropic Substances
Act 1985(NDPS) Monopolies and Trade Restrictive Practices (Amendment) Act, 1992
the law Commission of India has suggested drastic measures against such offenders. In
the Commissions observation, the tedious prosecution process involved in the trial of
such cases frustrates the cause of justice and often results in unjustified acquittal due to
defective report of the analyst or delay in examination of samples or lack of legal
expertise etc.7
Hoarding and black marketing of essential good and commodities is one of the main
forms of white collar crime. It is frequently done by the traders and business communities
in India. According to Sutherland the main cause is the rapid pace of social change and
in technical complications of business affairs to unethical business practices. Whenever
5 The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 as amended
in 1993 (Act No. 52 of 1993) w.e.f. 25-6-1993, See also The Smugglers & Foreign Exchange
Manipulators, (Forfeiture of Property) Act, 1976.
6 The Consumer Protection Act, 1986; the Narcotic Drugs and Psychotropic Substances Act 1985(NDPS)
Monopolies and Trade Restrictive Practices (Amendment) Act, 1992 are enacted to prevent these offences
which affect the public health.
7 Law Commission of India, 47th Report, p. 83.

there is a slight shortage even in temporary form for goods, almost every trader conceals
his stock and blindly teals the customers about non-availability of commodity in stock.
Such black marketers and hoarders are wicked, anti-social and criminal.

ConclusionGrowing indiscipline prevailing at the business and industry adversely affects the entire
society and set pace to all our present social problems. Engaged in commercial or
industrial activities and dealing with vast resources, business units as part of their
industrial, commercial or other activities build wide interactions with the government and
public authorities. Prompted by greed and the desire for making quick or easy money, and
possessed with vast resources garnered through black money hoarding, there is adequate
scope for businessmen and industrialist in this environment to use wrong ways of getting
their things achieved. White collar crime is fueled by greed. It is an attempt to look for
short cut means for getting quick money. Business and industry promote white collar
crimes and public service thrives as the beneficiary of this evil source of earnings.
Gradually White Collar crimes acquire and establish a place within the society.
White Collar Crimes are harmful for the economy of the country. Present laws are
insufficient to control the white collar crime which directly attack on the economy of the
nation as well as provides the facility of corruption in each and every place of business
and profession.
At this present juncture what we need is the strengthening of our enforcement agencies
such as Central Bureau of Investigation, the Enforcement Directorate etc.
General public must not avoid being engaged themselves in the prosecution of the Whitecollar criminals as the offence in general is directed towards them.