This is the last part of our three-part series on White-collar crimes in India and it explains the various laws and rules governing White-Collar crimes in India. You may refer to our earlier articles titled White-collar crimes in India: Concept, Origin and Scope and White-collar crimes in India: Types of White-collar Crimes.
In a nutshell, the laws applicable to White-collar crimes in India are:
Indian Penal Code (IPC) 1860 and Code of Criminal Procedure (CrPC) 1973:
Committing a White-collar crime ordinarily involves the presence of both an actus reus as well as the mens reas. The IPC sets out penal provisions for a majority of White-collar criminal offences such as dishonest misappropriation of property (S.403), criminal breach of trust (S.405), cheating and dishonestly inducing delivery of property (S.420), forgery (S.463), mischief (S. 425), cheating by personation (S. 416), etc.
The Criminal Procedure Code, on the other hand, provides procedural details on all these offences and lists out which among these are cognizable or non-cognizable, bailable or non-bailable and the court where such offences shall be triable.
Prevention of Money Laundering Act and Rules 2002: This Act is the principal legislation for money laundering and connected activities to the financial system of the country. To plug certain loopholes within the act, it was amended in June 2009. It provides for confiscation of property derived from criminal acts which have been designated as scheduled offences under the Act. The Finance Act, 2019 was also introduced to tighten the gaps around the existing PMLA. It attempts to remove ambiguity in the existing provisions by amending certain clauses of the PMLA.
The Directorate of Enforcement (ED) is mandated under this law to carry search, seizure, arrest, attachment, confiscation as well as investigation of property involved under money laundering. There are several rules enacted concerning multiple aspects such as restoration of confiscated property, manner of receiving records, search and seizure etc.
Prevention of Corruption Act, 1988: The Prevention of Corruption Act aims to consolidate and amend the law relating to the prevention of corruption and for matters connected therewith. The act was comprehensively amended in 2018 to enhance the due diligence conducted by the regulators under this Act.
Chapter III of this act provides in detail offences and penalties pertaining to Corruption and Bribery or any other offence that comes under this Act.
Income Tax Act, 1961: The act defines and provides punishment for White-collar crimes regarding evasion of tax and other tax-related offences. Section 276C defines the offence of willfully evading tax as well as provides a penalty for the same. Other offences like non-payment of tax, or providing false information with regards to taxing authorities have also been made punishable under Chapter 22 of the Act.
Companies Act 2013: The newly amended Companies Act substantially deals with offences relating to corporate fraud. It has defined offences such as fraudulently including people to invest money under Section 36, providing untrue statements within the prospectus under Section 34 and 35, penalty for furnishing false statements, mutilation, destruction of documents under Section 229 and others. The Act focuses on the commission of the fraud rather than the resulting loss or damage to the affected parties.
In order to curb instances of fraud, the Act also establishes, under Section 211, a Serious Fraud Investigation Office to investigate frauds relating to a company.
Corrida Legal is the preferred corporate law firm in Gurgaon (Delhi NCR) and Mumbai. Reach out to us on LinkedIn or contact us at contact@corridalegal.com/+91-9211410147 in case you require any advice or clarification(s) regarding White-collar crimes in India.
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