Under Which Laws Does the CBI Register White Collar Crime Cases?

The Central Bureau of Investigation (CBI) registers white collar crime cases under the Bharatiya Nyaya Sanhita, 2023 (earlier Indian Penal Code, 1860), the Prevention of Corruption Act, 1988, and various special economic and financial laws, depending upon the nature, gravity, and subject matter of the offence.

Introduction

White collar crimes in India are complex, document-driven offences involving fraud, corruption, financial manipulation, and abuse of official or professional position. Given their serious impact on the economy, public institutions, and public confidence, such crimes are often investigated by the Central Bureau of Investigation (CBI), India’s premier investigating agency for serious and sensitive matters.

Unlike ordinary criminal cases, white collar crimes do not fall under a single statute. Instead, the CBI invokes a combination of general penal laws and special statutes while registering and investigating such cases. This blog post provides a detailed, structured, and comprehensive overview of the legal framework under which the CBI registers white collar crime cases in India.

Legal Basis of CBI’s Power to Register Cases

The CBI derives its investigative powers from:

The Delhi Special Police Establishment Act, 1946 (DSPE Act)
Notifications issued by the Central Government
Consent of the State Government or orders of constitutional courts

Once jurisdiction is established, the CBI registers cases under appropriate substantive laws depending on the nature of allegations.

Primary Penal Law: Bharatiya Nyaya Sanhita, 2023

The Bharatiya Nyaya Sanhita, 2023 (BNS), which has replaced the Indian Penal Code, 1860, is the primary penal law under which most white collar crime offences are registered.

Key BNS Provisions Commonly Invoked by the CBI

1. Cheating and Dishonest Inducement

Section 318(4) BNS (earlier Section 420 IPC)
Used in cases involving fraudulent inducement causing wrongful loss and gain, such as bank frauds and investment scams.

2. Criminal Breach of Trust

Sections 316–318 BNS (earlier Sections 405–409 IPC)
Applied where public servants, bankers, or corporate officials misappropriate entrusted property.

3. Criminal Conspiracy

Conspiracy provisions are often invoked when multiple accused act together to commit financial crimes.

4. Forgery and Falsification of Documents

Sections 334–338 BNS (earlier Sections 463–471 IPC)
Used in cases involving fake documents, forged agreements, manipulated balance sheets, and false records.

5. Using Forged Documents as Genuine

Frequently applied in banking, procurement, and corporate fraud cases.

Prevention of Corruption Act, 1988

The Prevention of Corruption Act, 1988 (PC Act) is one of the most important statutes under which the CBI registers white collar crime cases.

Scope of PC Act in CBI Cases

The Act covers:

Bribery of public servants
Abuse of official position
Criminal misconduct
Taking undue advantage

The CBI commonly registers cases under the PC Act involving:

Central government employees
PSU officials
Bank officials of public sector banks

Requirement of Sanction

Prior sanction under Section 19 of the Prevention of Corruption Act is mandatory for prosecution of public servants.
Absence of valid sanction can vitiate the entire proceedings.

Companies Act, 2013

The Companies Act, 2013 is invoked in cases involving corporate frauds affecting public interest.

Relevant Offences

CBI may register cases involving:

Fraud under company management
False statements in prospectus
Falsification of accounts
Diversion and siphoning of funds

In serious cases, investigation may also be conducted by the Serious Fraud Investigation Office (SFIO), but the CBI can invoke penal provisions along with the Companies Act.

Banking and Financial Laws

White collar crimes involving banking transactions are often registered under:

Banking Regulation Act
Reserve Bank of India guidelines (as part of evidence)

While these laws are regulatory in nature, substantive offences are usually coupled with BNS and PC Act provisions.

Prevention of Money Laundering Act, 2002 (PMLA)

Although the Enforcement Directorate (ED) is the primary agency under the PMLA, CBI-registered offences often act as predicate or scheduled offences for money laundering proceedings.

Thus, while the CBI may not directly prosecute under PMLA, its cases form the foundation for ED action.

Information Technology Act, 2000

In modern white collar crimes involving digital evidence, cyber manipulation, and electronic records, the CBI may invoke provisions of:

Information Technology Act, 2000

This is particularly relevant in:

Online frauds
Electronic fund transfers
Email and data manipulation

Special and Sector-Specific Laws

Depending on the nature of the offence, the CBI may also invoke:

Public procurement guidelines
Defence procurement rules
Sector-specific financial regulations

These laws often supplement penal provisions rather than replace them.

Registration of Case: PE and RC

Preliminary Enquiry (PE)

In sensitive white collar crime cases, especially corruption matters, the CBI conducts a Preliminary Enquiry to verify allegations.

Regular Case (RC)

Upon finding sufficient material, the CBI registers a Regular Case, equivalent to an FIR, under appropriate laws.

Combination of Multiple Laws in a Single Case

A typical CBI white collar crime case may involve:

BNS provisions for cheating and forgery
PC Act provisions for corruption
Companies Act provisions for corporate fraud

This multi-law approach ensures comprehensive prosecution.

Judicial Approach Towards Legal Provisions in CBI Cases

Courts have consistently held that:

Economic offences are grave in nature
Multiple statutory provisions can be invoked if ingredients are satisfied
Criminal law should not be misused to convert civil disputes into criminal cases

High Courts frequently examine whether essential ingredients of invoked offences are made out.

Conclusion

CBI registers white collar crime cases under a combination of general penal laws and special economic statutes, primarily the Bharatiya Nyaya Sanhita, 2023 and the Prevention of Corruption Act, 1988, along with sector-specific laws such as the Companies Act and IT Act. This layered legal framework enables the CBI to effectively investigate complex economic offences involving corruption, fraud, and abuse of authority. Understanding the statutory basis of such cases is essential for legal practitioners, corporates, and individuals dealing with CBI investigations, as it directly impacts investigation strategy, defence, and judicial scrutiny.

Disclaimer: This information is intended for general guidance only and does not constitute legal advice. Please consult with a qualified lawyer for personalized advice specific to your situation.

Advocate J.S. Rohilla (Civil & Criminal Lawyer in Indore)

Contact: 88271 22304