Stringent law to deal with fugitive economic offenders
NEW DELHI: In a bid to tighten the noose around fugitives like diamond merchant Nirav Modi and Vijay Mallya, the Cabinet on Thursday approved the Fugitive Economic Offenders Bill that provides for confiscating all assets of absconding fraudsters and loan defaulters to recover dues.
The Union chaired by Prime Minister Narendra Modi also approved setting up of a National Financial Reporting Authority (NFRA) as an independent regulator for the auditors.
The proposed fugitive law aims to impound and sell assets of Nirav Modi-type escapees to recover dues quickly. It also will apply to defaulters who have an outstanding of Rs 100 crore or more and have escaped from the country.
Finance Minister Arun Jaitley said the Bill, which will be taken to Parliament for approval in the second half of the Budget session beginning March 5, defines a fugitive offender as someone against whom a court has issued an arrest warrant for a scheduled offence and who leaves or has left India so as to avoid criminal prosecution, or refuses to return to India to face trial.
The new law is different from the Prevention of Money Laundering Act, which also provides for confiscation of assets of economic offenders, he said. Under PMLA, only profit of crime is confiscated and that too upon conviction. The new law extends to all assets irrespective of whether it is acquired as a result of a crime or not, he said. “This is triggered by the offender being a fugitive”.
“A trial of fugitive will never be complete,” he said, reasoning why confiscation of assets has been provided for. The new law will apply “the moment warrant is issued (and) the court decides the man is not submitting,” he added.
It provides for an application being made before a special court for a declaration that an individual is a fugitive economic offender, attach and confiscate his properties in India and abroad, including benami property, and disposing them off to recover dues. It provides for disentitlement of the fugitive economic offender from defending any civil claim.
“If at any point of time in the course of the proceeding before the declaration, however, the alleged Fugitive Economic Offender returns to India and submits to the appropriate jurisdictional Court, proceedings under the proposed Act would cease by law,” an official statement issued after the Cabinet meeting said.
The Bill has been proposed to address the lacunae in the present laws and lay down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.