Former Chief Justice of India Sanjiv Khanna stated that not every case of financial inaction qualifies as a white-collar crime. Speaking at the National Conference on White Collar Crime, he stressed the need for nuanced understanding of economic offences.
Former Chief Justice of India Sanjiv Khanna remarked on Saturday that not every instance of inaction regarding financial matters can be classified as a white-collar crime.
He made these comments during the “National Conference on White Collar Crime,” hosted by the Terapanth Professional Forum.
Justice Khanna explained,
“White-collar crime is a cliché 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,”
He elaborated that such crimes are perpetrated by individuals in trusted positions, typically for personal or organizational gain, and are generally non-violent and economic in nature.
He stated,
“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 first category includes crimes driven by greed or self-interest, such as fraud, embezzlement, insider trading, cybercrime, money laundering, intentional tax evasion, bribery, and corruption.
Justice Khanna noted,
“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,”
He pointed out that complications arise when legislation conflates the first category of white-collar crimes with other categories or prescribes disproportionate penalties, even for involuntary lapses lacking intent to gain financially or cause harm due to ignorance or confusion.
Justice Khanna added,
“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,”
He emphasized that individuals should feel free to approach law enforcement if they become victims of white-collar crimes.
He posed a reflective question for lawyers,
“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.”
Justice Khanna expressed hope for a future where taxpayers consult their accountants or lawyers with the question, “please tell me what is the right amount of tax I have to pay,” rather than “please tell me how I can reduce or evade taxes.”
He believes that such a shift would lead to significant changes.
He also mentioned that many individuals are hesitant to approach law enforcement due to the challenging nature of dealing with government authorities, which he described as a “Herculean task” and a potential 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.”
The former Chief Justice concluded,
“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,”