Who is a Fugitive Economic Offender?
A fugitive economic offender is an individual who has committed some specific offences involving an amount of one hundred crore rupees or more and has absconded India or refused to come back to India to avoid or face action at law in India. Hence, a fugitive offender term applies solely to those that owe one hundred crore rupees or more within the domestic territory of India. There are many instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or throughout the pendency, of criminal proceedings. The absence of such offenders from Indian courts hampers investigation in criminal cases, wastes precious time of courts of law and undermines the rule of law in India. Further, most such cases of economic offences involve non-repayment of bank loans thereby worsening the money health of the banking sector in India. The prevailing civil and criminal provisions in law don’t seem to be entirely equal to affect the severity of the matter. It is, therefore, felt necessary to produce an efficient, prompt and constitutionally permissible deterrent to make sure that such actions square measure checked. Within the recent past, there are instance of big-time economic wrongdoer, fleeing the country to flee reach out of jurisdiction of Indian courts. Recently, Vijay Mallya, Chief of erstwhile Kingfisher Airlines who owes over Rs. 9,000crore to various Indian banks and after that the Nirav Modi defaulting Punjab National Bank worth more than Rs. 12,000crore had fied India to escape legal proceeding.
The Union cabinet gave its assent to a Bill that’s aimed toward punishing those who are accused of committing financial crimes in India so fleeing the country; The Fugitive Economic Offenders Bill is aimed squarely at the likes of Nirav Modi and Vijay Mallya. As per the draft Bill, a fugitive economic offender is “any individual against whom a warrant for arrest in relation to a schedule offence has been issued by any court of India who, either leaves or has left India to avoid criminal prosecution or refuses to come back to India to face criminal prosecution”. Attached to the draft are the list of offences, which includes cheating, forgery, fraud, corruption, insider trading, customs evasion and more. The Fugitive Economic Offenders Bill, 2018 was introduced on the twelfth day of March, 2018 within the House of the people, the Bill couldn’t be taken up for consideration and passing in the House of the People, Parliament isn’t in session and also the President is satisfied that circumstances exist that render it necessary for him to require immediate action, now therefore, in exercise of the powers conferred by clause (1) of article 123 of the Constitution, The president signed the Ordinance inside hours of it being cleared by the Union cabinet headed by Prime Minister Narendra Modi.
The main objective of THE FUGITIVE ECONOMIC OFFENDERS ORDINANCE, 2018 re-establish the rule of law with relevancy of the fugitive economic offenders as they’d be forced to come to India to face trial for scheduled and this would facilitate the banks and other financial institutions to realize higher recovery from money defaults committed by such fugitive economic offenders, improving the financial health of such institutes. It’s expected that the special forum to be created to expeditious confiscation of the proceeds of crime, in India or abroad, would hale the fugitive to come back to India to submit to the jurisdiction of Courts in India to face the law in respect of scheduled offences.
According to Section 2(f) of Fugitive Economic Offenders Ordinance, 2018
“fugitive economic offender means the Fugitive Economic Offenders Ordinance, 2018 section 2(f) “fugitive economic offender” means any individual against whom a warrant for arrest in relation to a Scheduled Offence has been issued by any Court in India, who—
(i) has left India so as to avoid criminal prosecution; OR
(ii) being abroad, refuses to return to India to face criminal prosecution and ‘Scheduled Offence’ means in relation to which the arrest warrant is issued, refers to an offence specified under the Schedule of the Ordinance, where the total value involved in such offence is INR 100 crore or more.
These ‘Scheduled Offences’ include:
- Cheating and counterfeiting-Indian Penal Code, 1860 (IPC);
- Dishonour of cheques -Negotiable Instruments Act, 1881;
- Customs evasion – Customs Act, 1962;
- Insider trading – Securities and Exchange Board of India Act, 1992;
- Money-laundering – Prevention of Money Laundering Act, 2002 (PMLA);
- Illegal gratification/ bribery to public officials – Prevention of Corruption Act, 1988 (PoCA);
- Conducting of business for a fraudulent or unlawful purpose – Companies Act, 2013.
A director or deputy director (appointed below the interference of Money-Laundering Act, 2002) could file associate application before a special court (designated below the 2002 Act) to declare someone as a fugitive economic offender. The application might contain:
- the explanations to believe that a individual may be a fugitive economic offender,
- any data regarding his whereabouts,
- Listing of properties believed to be proceeds of a crime for which confiscation is sought,
- A listing of benami properties or foreign properties
- A listing of persons having an interest in these properties.
Upon receiving related application, the special court can issue a notice to the individual:
- requiring him to appear at a specified place on a date which is at least six weeks from the issue of the notice, AND
- Stating that a failure to appear will result in him being declared a fugitive economic offender.
If the person seems at the desired place, the special court can terminate its proceedings in the Ordinance. The director or deputy director might attach any property mentioned within the application with the permission of a special court. Further, these authorities might provisionally attach any property while not the previous permission of the special court, only if they file associate application before the court in thirty days. The attachment can continue for a hundred and eighty days, unless extended by the special court. If at the conclusion of proceedings, the person isn’t found to be a fugitive economic offender; his properties are going to be discharged. After hearing the application, the special court might declare an individual as a fugitive economic criminal. it’s going to confiscate properties which: (i) square measure takings of crime, (ii) square measure benami properties in India or abroad, and (iii) the other property in India or abroad.
Upon seizure, all rights and titles of the property can vest within the central government, free from all encumbrances (such as any charges on the property). The central government can appoint associate administrator to manage and lose these properties. The Ordinance permits any civil court or assembly to forbid an individual, WHO has been declared a fugitive economic offender, from filing or defensive any civil claim. Further, any company or indebtedness partnership wherever such an individual may be a majority shareowner, promoter, or a key social control person (such as a decision maker or CEO), can also be barred from filing or defensive civil claims. The director or deputy director can have the powers unconditional in a very civil court. These powers include: getting into an area on the idea that a private may be a fugitive economic wrongdoer, and (ii) directional that a building be searched, or documents be taken over. And if there are any Appeals against the orders of the special court can lie before the tribunal.
So basically the main aim of this ordinance is to empower government to confiscate property of economic offender and defaulters who flee India and improving the financial health of such institutions.
– SONALI SETHI
Adv Sushant Chaturvedi