Criminology

Socio Economic Offences: Nature and Dimensions

Socio Economic Offences: An Introduction

Role Name Affiliation

Principal Investigator Prof. Bajpai NLU, Delhi

Paper Coordinator Dr. Kavita Singh Associate Professor, West

Bengal National University of
Juridical Sciences, Kolkata
Content Writer/Author Dr. Kavita Singh Associate Professor, West
Bengal National University of
Juridical Sciences, Kolkata
Content Reviewer Prof. (Dr.) N. K. Director, KIIT, Bhubeneshwar
Chakraborty
DESCRIPTION OF MODULE

Items Description of Module

Subject Name Criminology
Paper Name Socio Economic Offences: Nature and Dimensions
Module Name/Title Socio Economic Offences: An Introduction
Module Id
Objectives The objective of this module is:
 To inculcate within the readers in-depth knowledge of
law relating to Socio Economic Offences
 To explain most basic of concepts required for better
understanding of the module.
 To provide for answers to important issues related to
Historical Perspective

Prerequisites

Module Title: Socio Economic Offences: An Introduction

Synopsis

 Introduction to law related Socio Economic Offences: An Introduction

 Learning Outcomes
 Law related Socio Economic Offences: An Introduction
 Historical Perspective
 Summary

1. Introduction

Before discussing the concept of socio economic offences elaborately, first it is needed to be
stated that in India the Government had appointed certain committees to work on some specific
offences, which offences are actually falling under the category of socio economic offences.

In India, the Government of India for the purpose of reviewing the problem of corruption
and for making suggestions regarding it had appointed a committee namely Santhanam
Committee in the year of 1962,1 which has suggested changes in the legal framework for the
purpose of ensuring the speedy trial of the cases relating to bribery, corruption or the cases of

1
Santhanam Committee Report
criminal misconduct which can help in making the law more effective2; the committee has
suggested the changes after going through numerous cases in the light of the present social
context and the social changes and the economic objectives, which actually helped in the growth
of these types of offences.3 This Santhanam Committee while providing suggestions regarding the
change in the legal framework, which is needed for the purpose of curbing the problem of
corruption, has also dealt with the concept of the white collar crime and had attached a great
importance towards it and accordingly the report had stated the scenario in which these evils
evolved.

According to the report of the committee, as there were advancement in the sphere of
technology and science, it resulted in the emergence of “mass society”, where there was a group
of large rank of controlling elite who encouraged the growth of monopoly, there is a rise of
managerial class also, all of which resulted in a necessity regarding strict adherence to the high
standard in relation to ethical behaviour, so that the new processes which have emerged in the
social, political and economic spheres can function honestly, but the inability of the sections of
the society to strictly adhere to these standards resulted in the emergence of a new type of offence,
i.e., white collar crime, which resulted in difficulty of enforcement of the laws, these offences is
dangerous, not only for the reason that the financial stakes are much higher in these cases, but
also for the reason of they are causing such damage to the public morals, which is actually
irreparable in nature.4

2. Learning Outcome

2
Law Commission Report, 29, 1
3
Id.
4
Santhanam Committee Report, 11
 Learner will aquire the knowledge of
what is socio economic offences

How the word Socio economic

offences was coined

Relationship with white colour crime,

professional crime

Legal control mechanism to combat

various socioeconomic offences

3. White Collar Crime vis a vis Socio Economic Offence

While discussing Socio economic offences it is necessary to discuss the concept of white
collar crime in the begining, as it is necessary to understand the concept of white collar crime
before going to the details of socio economic offences. The occurrence of white collar crime is
very common now-a-days. If men or women is asked that whether they have heard about white
collar crime, most of them will say that they have heard about this term and by this term they
think about the stealing of money by persons of high status, who despite their stealing do not go
to the jail. Though, the concept of white collar crime is not that simple. It actually involves many
social, economic and legal issues, the issues having great impact in the society.5

Now, if the historical background prevailing behind the emergence of these types of offences is
traced back, then it can be found that even the Greek philosopher Aristotle had written about
cases of embezzlement of fund by some road commissioners and by some other officials.6 Even
in the Bible and in some ancient religious texts there were statements regarding condemnation of

5
BENSON & SIMPSON, WHITE COLLAR CRIME, AN OPPORTUNITY PERSPECTIVE, 1, (2009)
6
Id, 3
 some exploitative business activities which have harmful effects over the good of common
people.7
If the history can be traced back thoroughly then in the earlier portion of twentieth century, it
can be found that, one of the eminent American sociologist, namely E. A. Ross had raised his
voice against business duplicities and had mentioned that there are some powerful business
owners and also some members of executive who have a tendency to exploit people and they do
it and they also manipulate marketplace to fulfil their uninhibited desire regarding maximization
of their profits, but while doing so, they pretend that they are pious and respectable.8
The term “white collar crime” came into the picture when eminent criminologist Edwin H.
Sutherland first coined it, it can be said that Sutherland had worked upon the concept of white
collar crime thorough out his career, but it is also a fact that from his works it can be found that
he has not given only one definition of white collar crime, rather he had used several definitions
of white collar crime in his works, but the definition which is there in his book namely “White
collar Crime” is one of the most famous one, where he has defined the concept of white collar
crime as being a crime which is committed by such a person who is having a high social status
and also having respectability which is acquired by him in the course of the occupation, in this
definition he also has noted that under this definition many of the crimes which are committed by
the upper class is excluded, such as, murder, intoxication and adultery are excluded though
committed by the persons of upper class as these crimes are not customarily becomes a part of
the occupational procedures of these persons belonging to the upper class and in the footnote he
had also mentioned that the term white collar crime has been used for the purpose of referring
principally to the managers of business and to the members of the executive.9
Besides, Sutherland had not only defined the term white collar crime, he had also given
his opinion that the criminals who are committing these white collar crimes should be
differentiated as there are differences between the persons belonging to the lower socio-
economic status who are committing crimes by violating the regular penal code or violating the
special trade regulations which are applicable to them or the persons who are belonging to high
social economic status and violating the provisions of the regular penal code in such ways which

7
Id
8
Id, 4
9
SUTHERLAND, WHITE-COLLAR CRIME, 9, (1949)
 are not connected with their occupation and the persons who are committing white collar
crimes.10

Sutherland's definition of white-collar crime,11 is therefore built upon three overlapping

types of, misbehaviours (crimes). (1) Any crime committed by a person of high status (whether or
not it is done in the course of their occupational activities) is represented by the 1st circle. (2)
Those crimes committed on behalf of organizations (by people of any status) is shown in the 2nd
circle. (3) Those crimes committed against organizations (whether or not these are carried out by
people working in the same organization, another organization, or none at all)

A
D

C B
Diagram 3.1
A. Crimes by high status people
B. Crimes for organizations
C. Crimes against organizations
D. White-collar crime.

10
Id. 50-51
11
http://shodhganga.inflibnet.ac.in/bitstream/10603/12841/8/08_chapter%202.pdf
 While analysing the diagram (I) that Sutherland's focal point is the intersection of the three
circles, which means that his subject matter covers only those people of high status who use
organizations to commit crimes for their organizations against worker's, consumers, or other
organizations including competitors or even governments. Although he had not represent his
findings in this manner, his friends and contenders have both now agreed this is exactly what his
typology actually looks like
Sutherland has also mentioned that the particular concept of white collar crime involves
certain particular techniques which are specially used while committing white collar crime, in his
major works he has mentioned about those techniques which are there for specific type of
misdeeds,12 in cases of white collar crimes which are there in business and in those professions
consisting of principally the cases of violation of the delegated or in some cases implied trust,
many of which can be generally reduced in particular two categories, which are, the cases which
involves misrepresentation of the total asset values and the cases where there is duplicity
regarding the manipulation of the power, first types of cases is almost same as the cases of fraud
or swindling and the second types of cases are almost similar to the cases of double
cross.13Sutherland’s approach regarding white collar crime has faced many criticisms as there is
controversy regarding this approach.
One of the main controversies prevailing regarding this approach is according to the
view of Sutherland, he had a willingness in respect of including many of the acts though they had
been sanctioned by way of civil or in some cases administrative legal proceedings in the purview
of the concept of white collar crime, this particular decision of Sutherland attracted many
controversies as many legal scholars contented that only such types of acts that are particularly
punished under the criminal law can fall under the purview of the term crime, where as
Sutherland contended that there are many cases of civil law violations which are if compared
fundamentally, are similar to the criminal offenses.14
According to the view of Sutherland, if the offences which are generally pursued
under civil laws are excluded, then in such situation, the range of the white collar crime will be
limited and it will be an arbitrary thing, besides, this limitation is off much importance, because
in the context of this white collar crime, it can be easily seen that many times the organizations

12
Id., 154
13
Id., 152-158
14
BENSON & SIMPSON, Supra note 5, 6
 or the persons who involves themselves in committing these types of offences, often by the use
of their political power or by the use of their economic resources try and become successful in
avoiding prosecutions.15
Another point is there regarding which a controversy has arisen in the years, the
controversy is regarding the contention of Sutherland where he had made it clear that social
status of the offender is to be seen as a defining criteria for the purpose of dealing with white
collar crimes.16
Now, as per the contention of the critics as Sutherland has included social status and
respectability as a defining criteria to determine in the context of white collar crime, that whether
any particular act fall under the category of white collar crime or not, it had created a problem to
research and analysis the concept and cases of white collar crime.
The main problem which persists in deciding with regard to the social status the
concept of white collar crime is, the element of social status cannot be used like an explanatory
variable as it can be found that it is not varied independently according to the crime, so, as a
result the researches who are dealing with white collar crime are thereby prevented from doing
the investigation regarding the fact that how social status of the persons having influence in the
types or in the seriousness of the white collar crimes.17
Now, apart from this offence based approach, there is another approach, which is
offense based, if compared to the approach of Sutherland, which is offender based.
This approach is taken by Herbert Edelhertz. According to him, the definition of white
collar crime is that, it is an act which is illegal or series of these illegal acts, which is committed
by using such means which are non-physical, and these acts are done for the purposes of
concealment or guile for obtaining money or for the purpose of avoiding the payment of loss in
respect of money or property or for the purpose of obtaining any business and in some cases the
purpose is personal advantage.18
So, it is clear that as per the definition as mentioned above, the white collar crime is
denoted as per the means by which the white collar crime is carried out, specifically the means
which are non-physical in nature.

15
Id.
16
SUTHERLAND, Supra note 9, 9
17
BENSON & SIMPSON, Supra note 5, 7
18
H.EDELHERTZ, NATURE AND IMPACT AND PROSECUTION OF WHITE COLLAR CRIME, 5 (1970)
 He had mentioned about four types of white collar crime, the first category includes
personal crimes which is done specifically for the purpose of personal gain and done in a context
which is of non-business nature, the second category includes abuses of trust where the crimes
are done by persons in the course of occupation and persons who are operating the portion of
inside business by violating their duty towards the employer of loyalty and fidelity, the third
category includes business crimes where the crimes are done in furtherance of the business, but
that is not the main purpose of such business and lastly, the fourth category includes the con
games where white collar crime is done as a main business or it is the main activity of the
business.19
The theory of Edelhertz had also attracted many critics and one of the main
contentions of those critics is regarding the offense based approach of Edelhertz.20
According to many critics if empirical research is conducted then it can be found that if
the theory of Edelhertz is followed, which means if the offense based approach is followed then
in that case in most of the cases it resulted in such studies where the studies do not include the
particular offenses and the particular offenders which actually had drawn the attention of
Sutherland in the very first place and it deviates from the concept of Sutherland.21
If the above mentioned two approaches, one of which is offender based and the other is
offense based approach regarding the white collar crime is reconsidered, it can be clearly
understood that they are not contradictory, rather they are mutually exclusive, both of these
approaches actually emphasize on different aspects governing the characteristics or the social
status of the persons who had a tendency to commit these type of crimes.22
There can be a numerous motives behind committing the white collar crimes, there
may be a motive to pursuit a high social status, there may be motive of social recognition or
there may be motive of pursuing high career ambition or sometimes there may be pressure to
perform or some peer pressure or there may be some obedience towards the authority or motive
of revenge or there may be some other situations which may result in occurrences of white collar
crimes in the society.23

19
Id. 8
20
BENSON & SIMPSON, Supra note 5, 13
21
Id.
22
Id.
23
STEFAN HEISSNER, MANAGING BUSINESS INTEGRITY, PREVENT, DETECT AND INVESTIGATE WHITE COLLAR CRIME
AND CORRUPTION, 54-57 (2015)
 To control the rise of white collar crimes in the society, there is a need for effective
check and guard. The white collar offenders should be deterred from committing this crime,
besides, there should be shaming of these offenders as well as monetary penalties should be
awarded to the offenders and there should be rehabilitation of white collar offenders also.24

4. Conceptualizing Socio Economic Offences and Indian legislations

After discussing the concept of white collar crime, the concept of socio economic offences
is needed to be discussed.
In this context first, the concept of socio economic offences given by the 47th Law
Commission Report in India is very important and needed to be discussed as in this report the
salient features of these social and economic offences are discussed in a detailed manner.25It
could therefore, be submitted that socio-economic offences does not only extend the scope of the
subject matter of white-collar crime, as conceived by Sutherland and as appreciated by others24 ,
but is also of wider import.

A
I

c II
B

24
HAZEL CROAK, UNDERSTANDING WHITE COLLAR CRIME, 11-12(2001)
25
Law Commission Report, 47, 2
 Diagram 4.1
A. Socio-economic offences
B. White -collar crimes
C. Offences of strict liability.
I. Status of offenders
II Disqualification of mens rea
In the diagram just referred to, mens rea is represented by (II) signifying the intersectional
point, where the three circles i.e. white collar crime, socio-economic offences and offences of
absolute liability find their common denominator. To state that mens rea plays a central role is
to say the obvious, but for reason of placing the concept of mens rea within the framework of
socio-economic offences, definitely something has to be said about it.

According to the above mentioned Law Commission Report, there are salient features of
social and economic offences,26 firstly, in these type of offences the particular motive of the
criminal is not lust or hate rather the motive is avarice, secondly, if the background of these types
of offences can be seen then it can be understood that the background is non-emotional which is
not the same in cases of murder, rape etc. if compared with these types of offences, as in the cases
of social and economic offences, generally there is no existence of any emotional reaction
between the offender and victim, thirdly, usually in these types of offences the victim is a large
portion of the public, especially the consuming public and though even if there is no harm to any
particular person, but the harm is caused to the society which have a very large impact upon the
society, fourthly, the mode of these type of offences is fraud generally and not force, fifthly, the
act which results in commission of these type of offences is generally a deliberate and wilful act,
sixthly, the interest which needed to be protected if there is commission of these type of offences
are two-fold, as social interest is protected while preserving the property or health or the wealth of
the individual members and while preserving the whole economic system of a country and also
protecting the social interest which is in the augmentation of wealth of the whole country.27

26
Id.
27
Law Commission Report, 47, 2
 Now, as previously there is a discussion regarding the concept of white collar crime,
before going into the details of socio economic offences there is a need to discuss the difference
which is underlying between the two concepts of white collar crime and socio economic offences.
White collar crime is clearly such types of crimes which is committed by a person in
the course of his occupation and by a person belonging to upper class of society, now if a big
corporation evades tax accordingly, it comes under the purview of white collar criminal but if a
person for his personal use smuggles illegally some costly sets of television, then he doesn’t come
under the purview of a white collar criminal as there is no connection between the crime and his
occupation,28 but he will fall under the category of the offender who has committed social and
economic offences.29
So, the basic difference is, if the person does not belong to the high status or does not
do the act in his course of occupation, he will not come under the purview of white collar
offender, but then also he will come under the purview of offender committing socio economic
offences as he had done such an act which affected the health or the material welfare of the
society as a whole and which also affected the country’s economy as a whole.30
If the historical development of these socio economic offences in India can be
traced, it can be found that after the World War, there is scarcity of essential things and which
resulted in increasing demand of such things and avarice was breeding among the businessmen,
and there was a development regarding these types of offences, then after the freedom and
Partition of India, for lack of good legal and administration control this problem increased and
after the urbanization took place, these offences became rampant in India and the Govt. started to
recognize these problems and appointed different committees to investigate the matter and tried to
control the situation by implementing some measures as can be found from the reports of these
committees.
It is clear from the above discussion that these offences are different if compared to the
other offences. The two distinguishing features of these offences are the gravity of these offences
having a strong adverse impact in the society and thereby causing a great harm to the society as a
whole, and the nature of these offences are also peculiar if compared to the other offences as these

28
Id., 4
29
Id.,
30
Id.
offences are done in a planned way and it is done in secrecy in a sophisticated manner by some
shrewd persons only for the purpose of their profit.31
So, from the above discussion it is clear that this particular type of offences actually not
only cause harm to the public welfare, but also harms the nation’s welfare as a whole.32

4.1 Different Types of Socio Economic Offences

While discussing the categories of Social and economic offences, The Law
Commission in its 47th report had mentioned the categories falling under the purview of these
offences as mentioned in the 29th Report of the Law Commission.33
In 29th report some categories are mentioned which are dealt with in the report. They are
discussed in a brief manner here under for the sake of understanding the concepts of different
types of social and economic offences in India.
As per the report, the offences which actually prevent the economic development of
the country and thereby consequently creates danger for the economic health of a country comes
under the first category, in second category there are offences of evasion of tax, in third category
there are the offences related to misuse of the position by the public servants, under fourth
category the offences which is similar to the nature of breaches of the contracts which
consequently results in delivery of such goods which are not accordingly falling under the
specifications are included, in the fifth category the offences relating to hoarding as well as black
marketing comes, the sixth category mentions about the offences relating to adulteration of foods
as well as drugs, in the seventh category the offences of theft and the misappropriation in relation
to public property and funds are included, in the eighth and the last category comes the offences
related to trafficking in the sector of licenses as well as permits etc.34
If the first category of the social and economic offences is discussed, it can be found
that it is very wide category where the test is only to determine whether the economic
development and the economic health of a country is being endangered for the commission of the
offence or not35.

31
Id., 11
32
Id.
33
Id., 3
34
Id.
35
Supra note 2, 47
 The second category deals with evasion of taxes36 which is particularly dealt with by
Income Tax Act, 1961.37 There are cases where the tax evasion has correctly and firmly
disapproved by the court.38 It is pertinent to mention here that tax evasion actually shows the
defects which are actually present in the enforcement of the law.
The third category deals with the misuse of the position by the public servants where
by the misuse the public servants actually commits one of the social and economic offences, and
they specifically misuse their public position while making contracts and dealing with the matters
relating to disposal of public property.39
The fourth category specifically deals with the situations where the individuals or
industrial or commercial undertakings deliver the goods which are not in accordance with the
previously agreed specifications while fulfilling the contracts which are entered into with a public
authority.40
The fifth category deals with the concepts of hoarding, profiteering and black-
marketing. Profiteering means the act of selling anything in such a rate which is in excess to the
controlled price of that thing, and by the term hoarding the acts of storing anything in excess to
the permissible quantity is meant and by the term black-marketing the concept of suppression of
some actual facts in relation to the acquisition or disposal of the things which are controlled by
some different special laws, comes into picture.41 So, it is crystal clear by the above mentioned
acts actually the economic growth of the country is endangered which actually affects the
economic health of a country. There are special legislations also relating to the above mentioned
acts in India which actually tries to deal with these types of social and economic offences in this
country.
The sixth category deals with adulteration. Now, adulteration of food and drug has
become a very common problem. It had started after the industrialization took place in the 20 th
century.42 It is not only the problem in India, rather there are so many countries suffering from the
same problem, as USA is suffering from the problem of adulteration in relation to genetically

36
Id., 19
37
Income Tax Act, 1961
38
Latilla V Inland Revenue Commissioner, Law Reports 1943 Appeal Cases, 381
39
Supra note 2, 61
40
Id., 62
41
Id., 69
42
Hennessy etal., Systemic Failure in the Provision of Safe Food, Food Policy, 28(1):82
modified crops.43 In India there are several laws which dealt with the problems of food
adulteration and drug adulteration.
Previously, the Prevention of Food Adulteration Act, 1954 used to deal with the offences
of food adulteration in India.44 There are many cases45 which are decided according to the
provisions of this Act. Afterwards as there were so many loopholes in the Act of 1954, the Act of
2006 came into force. The Food Safety and Standards Act, 2006 tried to cure the loopholes
present in the previous Act.46
This Act provides for the establishment of Food Safety and Standards Authority in India,
which Authority tried to cure the problem which previously existed and also tried to deal with the
cases of food adulteration afterwards.47
The Acts related to drug control in India tries to curb the problem of drug adulteration
in India.
The seventh category deals with the offences which are related to theft as well as
misappropriation of the properties or funds which actually belongs to the public. Previously the
Indian Penal Code48, with the help of Prevention of Corruption Act, 194749 and some special
enactments enacted to deal with the problems, tried to fight with these offences and tried to curb
the problem. But as there were many loopholes in the previous Act of 1947, the Act was amended
and the Prevention of Corruption Act, 198850 came into force to effectively fight with these evils.
The eighth and the last category deals with the offences related to trafficking in licenses
or permits etc. By the concept, the acts which include the outright sale of the licenses as well as
permits are meant, where by these licenses and permits any other person is allowed, apart from
the person who is intended, to enjoy the benefits accruing from the licenses as well as permits.51
The laws relating to the imports try to control the situation relating to these offences in India.
So, these are the different categories of social and economic offences which are
causing harm to the country.

43
M.R. Grossman, Genetically Modified Crops in the United States: Federal Regulation and State Tort Liability,
ENVLEREUK, 18 (2003)
44
Prevention of Food Adulteration Act, 1954
45
Municipal Corporation of Delhi V Surja Ram, (1965) CrLJ 571
46
Food Safety and Standards Act, 2006
47
Id.
48
Indian Penal Code, 1860
49
Prevention of Corruption Act, 1947
50
Prevention of Corruption Act, 1988
51
Supra note 2, 74
 5. Legal Control Mechanism in India to Combat Socio Economic offences

The typology of socio-economic offences are different the legal control mechanism also
differs for each offences. Legal control mechanisms to combat socio-economic offences are
discussed below:

To deal with the tax evasion government has implemented,

T

. The Act applies to Indian residents and seeks to replace the Income Tax (IT) Act, 1961 for
the taxation of foreign income. It penalizes the concealment of foreign income, and provides for
criminal liability for attempting to evade tax in relation to foreign income. A flat rate of 30 per
cent tax would apply to undisclosed foreign income or assets of the previous assessment year. No
exemption, deduction or set off of any carried forward losses (as provided under the IT Act)
would apply. This would apply from April 1, 2016 onwards. The total undisclosed foreign
income and asset of an individual would include: (i) income, from a source located outside India,
which has not been disclosed in the tax returns filed; (ii) income, from a source outside India, for
which no tax returns have been filed; and (iii) value of an undisclosed asset, located outside India.
A one-time compliance opportunity to persons who have any undisclosed foreign assets (for all
previous assessment years) will be provided for a limited period. Such persons would be
permitted to file a declaration before a tax authority, and pay a penalty at the rate of 100%. The
relevant tax authorities and their jurisdiction would be as specified under the IT Act. They would
have powers of inspection of documents, and evidence. The proceedings are to be judicial.

Penalty for offences: Undisclosed foreign income/assets will attract penalty for nondisclosure of
foreign income or assets would be equal to three times the amount of tax payable, in addition to
tax payable at 30%. Failure to furnish returns will attract penalty for not furnishing income tax
returns in relation to foreign income or assets is a fine of Rs 10 lakh. This would not apply to an
asset, with a value of five lakh rupees or less. If a person who has filed tax returns does not
disclose his foreign income, or submits inaccurate details of the same, he has to pay a fine of Rs
10 lakh. This would not apply to an asset, with a value of five lakh rupees or less. Any person,
who continues to default in paying tax that is due, would be liable to pay an amount equal to the
amount of tax arrears. Miscellaneous penalties are levied if a person fails to abide by the tax
authority in (i) answering questions, (ii) signing off on a statement, (iii) attending or producing
relevant documents, he is to pay a fine between Rs 50,000 to two lakh rupees. The punishment
would be rigorous imprisonment from three to 10 years, and a fine for wilful attempt to evade tax.
The punishment would be rigorous imprisonment from three months to three years, and a fine for
wilful attempt to evade payment of tax or non disclosure of foreign assets in returns: The
punishment is rigorous imprisonment of six months to seven years, and fine for Failure to furnish
returns. The punishment is rigorous imprisonment of six months to seven years, and fine
Punishment for abetment. For any offence under this Act, every person responsible to the
company is to be liable for punishment. His liability is absolved if he proves that the offence was
committed without his knowledge. ”

The implementation of the Food Safety and Standards Act, 2006 has consolidates eight
“

laws52 governing the food sector and establishes the Food Safety and Standards Authority (FSSA)
as the regulator. It requires all food business operators (including small businesses and street
vendors) to obtain a licence or registration. The Regulations under FSSA related to procedure for
obtaining a licence or registration was notified on August 1, 2011. According to the Regulations,
all food business operators had to get a licence or registration within one year of the notification.
Due to opposition from several food business operators (see here and here), the FSSA has
now extended the deadline for getting a licence or registration by another six months (till
February 2013). However, some of the key concerns regarding the law have not yet been
addressed.
The organised as well as the unorganised food sectors are required to follow the same food
law. The unorganised sector, such as street vendors, might have difficulty in adhering to the law,
for example, with regard to specifications on ingredients, traceability and recall procedures and
does not require any specific standards for potable water (which is usually provided by local
authorities). It is the responsibility of the person preparing or manufacturing food to ensure that
he uses water of requisite quality even when tap water does not meet the required safety
standards. It excludes plants prior to harvesting and animal feed from its purview. Thus, it does
not control the entry of pesticides and antibiotics into the food at its source. The power to suspend

52
(a) The Prevention of Food Adulteration Act, 1954. (b) The Fruit Products Order, 1955. (c) The Meat Food
Products Order, 1973. (d) The Vegetable Oil Products (Control) Order, 1947. (e) The Edible Oils Packaging
(Regulation) Order, 1998. (f) The Solvent Extracted Oil, De oiled Meal, and Edible Flour (Control) Order, 1967. (g)
The Milk and Milk Products Order, 1992. (h) Any other order issued under the Essential Commodities Act, 1955,
relating to food.
the license of any food operator is given to a local level officer. This offers scope for harassment
and corruption. The Act requires a food business operator to get different licenses if articles of
food are manufactured or sold at different premises. Newspapers reported that this provision was
challenged in the Madras High Court53 but a stay order on the Act and its Rules was refused.
Since in India traditionally infants/children are fed milk, adulteration of milk and its products is a
concern and stringent measures need to be taken to combat it. The consumption of adulterated
milk and adulterated milk products is hazardous to human health. As directed by Supreme Court
by order dated 10.12.2014,54 it will be in order that the Union of India come up with suitable
amendments in the Food Safety and Standards Act, 2006 and the respondent-Union of India shall
also make penal provisions at par with the provisions contained in the State amendments as
indicated. ”

Corruption is an important materialization of the failure of moral principles. Anti-corruption

interventions made so far are seen to be unsuccessful and there is widespread public scepticism
about them. The interventions are seen as mere posturing without any real intention to bring the
corrupt to book. They are also seen as handy weapons for partisan, political use to harass
opponents. Corruption is so deeply entrenched in the system that most people regard corruption as
inevitable and efforts enshrined in the prevention of Corruption Act, 1988 as futile.55 In this
regard the Commission56 has recommended that: The offences should be classified into four
categories, first, gross perversion of the Constitution and wilful violation of the oath of
democratic institution office. Second, abuse of authority by favouring or harming or harassing
someone. Third, obstruction or perversion of justice by unduly influencing law enforcement
agencies and prosecution is a common occurrence in our country. Last, squandering public
money, including ostentatious official life-styles etc.57 The Prevention of Corruption Act (PCA)
discusses various offences and penalties but bribe giving is not defined separately as an offence.58

53
M/s Rajputana Distributers v/s Deputy Commissioner of Customs and Other, W.P. No. 19279/2011 of, the
directions/order dated 23.09.2011. See, The order passed in Writ Petition No. 2027 of 2012 in the matter of Food
Lever India Pvt. Ltd. had not become operational in view of the Order of Stay granted during the pendency of the
Writ Appeal by the Hon’ble Division Bench. Subsequent to the order of Division Bench, directing / permitting the
Food Lever India Pvt. Ltd. to re-export the imported food article and the same having been re-exported on the
conditions imposed by the Customs authorities, the very Writ Appeal itself was disposed.
54
Swami Achyutanand Tirth & Ors vs Union Of India, W. P. No. 159 0f 2012.
55
The Prevention of Corruption Act, 1988, Section 6.
56
Government of India, Second Administrative Reforms Commission (ARC), 4th Report on Ethics in Governance, 5-
6.
57
The Fourth Report of 2nd ARC, op. cit., (para 3.2.1.10).
58
The Prevention of Corruption Act, 1988, Section 7.
The Commission suggests that section 7 of this Act needs to be amended and include collusive
“

bribery as a special offence. If it causes a loss to the state, public or public interest then the
punishment should be double.59 It is provided in Prevention of Corruption Act that the previous
sanction of the competent authority is necessary before a court takes cognizance of the offences.60
But the Commission has opined that prior sanction should not be necessary for prosecuting a
public servant who has been trapped red-handed or in case of possessing assets disproportionate
to the known sources of income. The Presiding Officer in a Legislature should be designated as
the sanctioning authority for MPs and MLAs respectively. The Commission suggested that there
is a need to delegate the power of sanctioning authority to a Committee of Central Vigilance
Commissioner and Departmental Secretary. In the case of differences between two, the matter
should be resolved at the level of Central Vigilance Commission. When the sanction is required
against Secretary, then the empowered committee should comprise Cabinet Secretary and the
Central Vigilance Commissioner. The sanction granting order should be issued within two
months. In case of refusal, the reasons should be placed before the respective Legislature
annually. Such arrangements may be introduced at the state level.61 A new chapter of the penalty
and pay damages in criminal cases of corrupt public servants should be introduced in Prevention
of Corruption Act. The decision of the Government on this recommendation is pending. To speed
up the trial under the Prevention of Corruption Act needs to be fixed a time limit for various
stages of trial and proceedings of courts by amending the criminal procedure code day-to-day
basis. The Supreme Court and the High Courts may provide some guidelines to preclude
unwarranted adjournments and avoidable delays.62 Private sector service providers and NGOs
receiving substantial funding should be covered under the Prevention of Corruption Act63 Again
the decision of the Government is pending about this recommendation. Discretion should be
eliminated from all the government offices having public interface. Decision making on important
matters should be assigned to a committee instead of an individual. It is again accepted that the
illegal acquired property must be forfeited and the Corrupt Public Servants (Forfeiture of
Property) Act be enacted without further delay. Supervisory officers should be primarily
responsible for curbing corruption through annual performance report. If any officer, who gives a

59
The Fourth Report of 2nd ARC, op.cit (para 3.2.2.7).
60
The Prevention of Corruption Act, 1988, Section 19.
61
The Fourth Report of 2nd ARC, op. cit (para 3.2.3.2).
62
Ibid (Para 3, 2, 5, 6).
63
Ibid, (para 3.3.7).
clean chit to his corrupt subordinate then he should be asked to explain his probation in this
regard.64 Submission and scrutiny of assets and liability statements of public servants should be
ensured and put in the public domain. Annual list of public servants of doubtful integrity should
be prepared in all departments in consultation with the anti-corruption agencies.65 The Benami
Transactions (Prohibition) Act, 1988 precludes the person who acquired the property in the name
of another person from claiming it as his own. It is accepted by the Government that steps should
be taken for immediate implementation of the Benami Transactions (Prohibition) Act, 1988.66
The whistleblowers of government and corporate sector, who expose false claims, fraud or
corruption be protected by ensuring confidentiality and anonymity, protection from victimization
in career and other administrative measures to prevent bodily harm and harassment.67 A law on
`Serious Economic Offences should be enacted and the definition of this law may include the
involvement of a sum exceeding Rs 10 crore, widespread public concern, require highly
specialized knowledge of financial market, significant international dimensions where the
requirement of legal, financial investment and investigative skills be brought together.68Serious
Frauds Investigation Office (SFIO), which was set up in 2003 as a specialized multi-disciplinary
organization to deal with cases of serious corporate frauds should be attached with the `Serious
Frauds Office‟ (SFO). A serious frauds monitoring committee69 (SFMC) should be constituted to
oversee the investigation and prosecution of such offences headed by Cabinet Secretary. When
the pubic functionary is involved in a serious fraud, the SFO shall send a report to the Rashtriya
Lokayukta and act according to the provided directions.70 The Commission suggested that
accepting money or any other valuable consideration to speak or vote in a particular manner in the
Parliament should be considered into the corrupt acts. For this purpose Article 105(2) of the
Constitution which provides immunity to MPs or MLAs under Parliamentary privileges must be
amended. Same arrangement should be made in Article 194(2) for members of the State
legislatures. ”

64
Ibid, (para 3.4.10).
65
Ibid, p. 154.
66
Ibid, (para 3.5.4).
67
Ibid, (para 3.6.4).
68
Ibid, (para 3.7.19).
69
The Chief Vigilence Commissioner, Home Secretary, Finance Secretary, Secretary Banking/Financial Sector; a
Deputy Governor, RBI; Secretary, Department of Company Affairs; Law Secretary and Chairman Security Exchange
Board of India (SEBI) etc. should be its members.
70
The Fourth Report 2nd ARC, op. cit., (para 4.7.19). [26] Ibid, (para 3.9.4).
 6. Summary
There are some problems relating to these types of offences, which are generally found
while dealing with these types of problems. One of the problem is in these types of offences
sometimes it is difficult to decide that who will be responsible while the offence is done at the
decision making level of the firms, because in many cases it can be seen that decision making is
fragmented and not there in the hands of a single person, besides, the persons who are making the
decision can practice some concerted ignorance so that they can shield themselves from the
criminal liability.71 Besides, as it can be found from the legislations which are trying to deal with
these types of offences in India, they are regulatory in nature in many cases and therefore, it is for
control and for monitoring regarding the behaviour of different institutions and as they are
regulatory in nature in most of the situations, the control has a tendency to become more
persuasive in nature rather than becoming more punitive in nature, which is needed to control the
situation for example, the provision of recall of products as existing in the legislations dealing
with the food adulteration.72
It is clear from the above discussion that these specific offences are different from the
other types of offences as these offences cause harm in a greater magnitude if compared to the
magnitude of the traditional crime and these offences do not represent the cases of positive
aggression or the cases of invasion, though these offences generally do not create a direct or
immediate injury, but actually they create such type of great danger, the probability of which
should be tried to be minimised by the application of law73 and the laws which are dealing with
these particular types of offences should be more stringent so that the problems can be reduced to
a greater extent, here it is necessary to mention that the laws which deal with these offences are
not stringent enough to deal with the situation which is prevailing in India regarding these
offences.
Another problem which also persists is that the maximum punishment which are
prescribed for these types of offences are not high enough to deal with the situation effectively,
actually by the maximum punishment it should be effectively reflected that that there is social

71
BENSON & SIMPSON, Supra note 5, 186
72
Id., 189
73
Supra note 24, 12
disapproval of high level regarding these types of offences, but unfortunately, that cannot be seen
from the situation prevailing now in this country.74
Another problem which also persists is that these offences are dealt with the courts
while dealing with offences of other nature also, so, actually there are no specials courts which are
established for the purpose of effectively and exclusively deal with these types of offences only,
and it creates a significant problem as the courts which are already over burdened with other cases
have to deal with these offences, which are actually different in nature if compared to the other
type of offences.75
In these type of offences, there is every chance of getting away from the ambit of the
punishment of the offenders as in many cases dealing with these type of offences, it can be seen
that the offenders who actually involve themselves in these type of offences belong to a higher
strata and having a political power to use and get away from the altar of justice by destruction of
the evidences available against them, so, in these type of offences, there is a very need for speedy
disposal of the cases coming before the courts, but unfortunately the situation prevailing in India
shows that the cases are not disposed off in a speedy manner, as is required to deal with the
situation.
Besides, in many cases of these offences, it can be seen that they are committed by
different corporations or business organizations in the course of their business and many times it
is also seen that they are repeatedly committing the same offences, but no stringent action is taken
against them, so that their practice to commit these types of offences can be checked effectively
and controlled to some extent.
After discussing the problems as mentioned in the above discussion, it is clear that some
changes are needed in the legislations so that the problem of socio economic offences can be dealt
with effectively.
Some suggestions are mentioned here which are needed to be implemented in the current
scenario.
The legislations which are dealing with these particular types of offences should be
made in a less regulatory in nature and rather more punitive in nature.
The laws which are dealing with these types of offences should be made more stringent
so that the evil can be controlled to a great extent.
74
Id., 14
75
Id., 15
 The maximum punishment which is there to deal with the offences should be increased76
as it is necessary, so that the offenders who had a tendency to commit these types of offences can
be deterred.
Some specials courts should be established which should particularly and exclusively deal
with these types of offences77 and not with any other types of offences, so these special courts
will be less burdened if compared to the courts which are over burdened with other cases.
There should be effective and speedy disposal of these types of cases, so that the
offender cannot get away from the purview of justice.
Where it is found that these offences are committed by business organizations or
commercial institutions and they are repeating these types of offences, the organizations should
be awarded community sentences apart from heavy monetary penalties, so that they think twice
before indulging in such acts which result in repetition of these types of offences.
While concluding it can be stated that in India, there are several problems of poverty, ill
nourishment as well as exploitation which are coming in the way of economic development of
this country,78so, apart from these, if these offences continue to harm the economic development
of the country, then India will not be able to develop as a whole. So, by some stringent action in
the part of the Govt. and by initiative of the people of India these problems of socio economic
offences can be cured to a great extent.

76
Supra note 24, 14
77
Id., 15
78
Id., 11