In a move to bring back huge bank loan defaulters who escaped the country and took refuge abroad, the Union Cabinet on Saturday approved the Fugitive Economic Offenders Ordinance, 2018 that would provide for attachment and confiscation of the properties of the offenders. According to sources, the proposed Bill is expected to be passed in the Monsoon Session of Parliament.
The decision was taken up at the Cabinet meeting headed by Prime Minister Narendra Modi against the backdrop of the recent multi-crore Punjab National Bank (PNB) fraud case, in which main accused diamond trader Nirav Modi and his uncle Mehul Choksi fled the country after duping the bank to the tune of over Rs 30,000 crore.
The Fugitive Economic Offenders Bill was introduced in the lok Sabha on March 12 but could not be passed due to logjam in Parliament over various issues. As far as the Bill is concerned, sources said the Ordinance aims at deterring economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.
“Under the Ordinance, a special forum would be created for expeditious confiscation of the proceeds of crime, in India or abroad, that would coerce the fugitive to return to India to submit to the jurisdiction of courts in India to face the law in respect of scheduled offences,” it said.
A fugitive economic offender is described as a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution.
The provisions of the Ordinance will apply to economic offenders who refuse to return, persons against whom an arrest warrant has been issued for a scheduled offence as well as wilful bank loan defaulters with outstanding of over Rs 100 crore. It, however, provides for confiscating assets even without conviction and paying off lenders by selling off the fugitive’s properties.
Such economic offenders will be tried under Prevention of Money laundering Act (PMlA).
like Nirav Modi, similar offender Vijay Mallya, who owned the now-defunct Kingfisher Airlines, also escaped to london a few years after running up huge debts to consortiums of banks.
Sources, however, said the Ordinance is expected to re-establish the rule of law with respect to the fugitive economic offenders as they would be forced to return to India to face trial for scheduled offences. “This would also help the banks and other financial institutions to achieve higher recovery from financial defaults committed by such fugitive economic offenders, improving the financial health of such institutions,” it added.
If at any point of time in the course of the proceeding prior to the declaration, the alleged fugitive economic offender returns to India and submits to the appropriate jurisdictional court, proceedings under the proposed Act would cease by law.
“All necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal to the High Court have been provided for,” sources said.
According to the Ordinance, a director or deputy director appointed under the PMlA, 2002, may file an application before a special court (designated under the 2002 Act) to declare a person as a fugitive economic offender. The application will contain the reasons to believe that an individual is a fugitive economic offender.
Besides, the application will have information about his whereabouts, a list of properties believed to be proceeds of a crime for which confiscation is sought, a list of benami properties or foreign properties for which confiscation is sought, and a list of persons having an interest in these properties.
Upon receiving the application, the special court will issue a notice to the individual, requiring him to appear at a specified place within six weeks. If the person appears at the specified place, the special court will terminate its proceedings under the provisions of the Bill.
Any property belonging to the fugitive economic offender may provisionally be attached without the prior permission of the special court, provided that an application is filed before the court within 30 days.