Every Instance Of Failure To Act In Financial Matters Not White-Collar Crime: Ex-CJI Sanjiv Khanna

New Delhi : Former chief justice of India Sanjiv Khanna said on Saturday that every instance of failure to act in matters that have financial implications cannot be termed a white-collar crime.
He said this while speaking at the “National Conference on White Collar Crime”, organised by the Terapanth Professional Forum.
“White-collar crime is a cliche which we hear every day in, day out, but very few of us really understand what is a white-collar crime. This expression was coined in 1939 by a sociologist, who described it as a non-violent offence committed by individuals of position and responsibility,” Justice Khanna said.
He said these crimes are committed by people in positions of trust, authority or respectability, usually for personal or organisational gain, and these are generally non-violent and economic in nature.
“Yes, white-collar crimes can also lead to violence and they are then classified as red-collar crimes. Now, it will be wrong to say that every act of failure to act that has financial implications is a white-collar crime. To me, financial or monetary wrongs can be divided into three categories,” the former CJI said.
He said the first category includes crimes motivated by greed or advantage, such as fraud, embezzlement, insider trading, cyber crime, money laundering, intentional tax evasion, bribery and corruption.
“The second category of wrongdoings is unintentional, largely due to a lack of awareness or knowledge. It is without malicious or bad mental intent. The third category of financial crimes are technical or procedural wrongs, like not taking prior permission, filing errors, compliance oversight, which happens due to a misunderstanding of law or lack of awareness,” Justice Khanna said.
He said a difficulty arises when the legislature equates the first category of white-collar crimes with other categories, or a disproportionate punishment is prescribed with penalties or even a sentence of imprisonment, notwithstanding that the lapse is involuntary or without the intent to gain financially or cause harm, but on account of lack of awareness or confusion.
“This morning, I read in the papers that there is active discussion going on to reduce the number of offences under the Income Tax Act. While these moves are right, at the same time, white-collar crimes, especially cyber crimes, are increasing. The only way to deal with it is public awareness and knowledge that you can be subjected to a white-collar crime,” Justice Khanna said.
The former CJI said nothing prevents an individual from approaching police in case of falling prey to white-collar crimes.
Posing a question for lawyers, he said, “How many of you have ever written to the government that your client, who is briefing you, has indulged in money laundering? I do not think anybody would have done it. All of us have been brought up to understand that there is a professional privilege.
“I am looking forward to the day when a taxpayer approaches his accountant, chartered accountant, lawyer with the question, ‘please tell me what is the right amount of tax I have to pay’, and not with the question, ‘please tell me how I can reduce or evade taxes’. The day that happens, a lot of things will change.” Justice Khanna said people are afraid to go to law-enforcement agencies in case of being victims of white-collar crimes because going to such government authorities is a “Herculean task” and “a source of harassment”.
“And that fear factor, invariably, is used by cyber criminals to digitally arrest you or swindle you. There has to be a change in the mindset of the ordinary people when they deal with this situation. You should be able to have the courage to go to law-enforcement agencies and not fear.
“You should not feel that if I go to a law-enforcement agency, I will be harassed more, I would rather pay up the amount demanded,” the former CJI said. (Agencies)