The Union Cabinet has approved the Fugitive Economic Offenders Bill, 2017 on 1st March 2018
The Bill would help in laying down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.
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.
Economic offences are those that are defined under the Indian Penal Code, the Prevention of Corruption Act, the SEBI Act, the Customs Act, the Companies Act, Limited Liability Partnership Act, and the Insolvency and Bankruptcy Code.
Offences involving amounts of ₹100 crore or more fall under the purview of this law.
Who is a ‘fugitive economic offender’?
According to Section 4 of the law, a ‘fugitive economic offender’ is “any individual against whom a warrant for arrest in relation to a scheduled offence has been issued by any court in India, who:
(i) leaves or has left India so as to avoid criminal prosecution; or
(ii) refuses to return to India to face criminal prosecution.”
How is a person declared an offender?
A Director, appointed by the central government, will have to file an application to a Special Court to declare a person as a ‘fugitive economic offender’.
Under Clause (2) of Section 6, the application must contain:
“(a) reason/s for the belief that an individual is a fugitive economic offender;
(b) any information available as to the whereabouts of the fugitive economic offender;
(c) a list of properties or the value of such properties believed to be the proceeds of crime, including any such property outside India for which confiscation is sought;
(d) a list of properties owned by the person in India for which confiscation is sought;
(e) a list of persons who may have an interest in any of the properties listed under sub-clauses (c) and (d).”
The Director has the power to attach any property the accused holds.
What does the offender have to do?
The Court will issue a notice to the person named a ‘fugitive economic offender’. Within six weeks from the date of notice, the person will have to present themselves at “a specified place at a specified time”. If the offender fails to do so, they will be declared a ‘fugitive economic offender’ and their properties as listed in the Director’s application will be confiscated.
Once property is confiscated, can the offender file a civil claim?
No. Section 11 of the Act disqualifies those declared as offenders from either filing or defending a civil claim in court.
What happens to the properties?
The Special court will appoint an ‘administrator’ to oversee the confiscated property. This person will be responsible for disposing of the property as well, and the property will be used to satisfy creditors’ claims.
After two instances of businessmen fleeing the country to avoid being arrested for economic fraud, Finance Minister Arun Jaitley had announced in last year’s Union Budget that the government would soon bring about a law that would allow the state to take possession of properties belonging to such offenders.
Salient features of the Bill:
Application before the Special Court for a declaration that an individual is a fugitive economic offender;Attachment of the property of a fugitive economic offender;Issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender;Confiscation of the property of an individual declared as a fugitive economic offender resulting from the proceeds of crime;Confiscation of other property belonging to such offender in India and abroad, including benami property;Disentitlement of the fugitive economic offender from defending any civil claim; andvii. An Administrator will be appointed to manage and dispose of the confiscated property under the Act.
If at any point of time in the course of the proceeding prior to 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. 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. Further, provision has been made for appointment of an Administrator to manage and dispose of the property in compliance with the provisions of law.
Implementation strategy and targets:
In order 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, the Bill is being proposed. The Bill makes provisions for a Court ('Special Court' under the Prevention of Money-laundering Act, 2002) to declare a person as a Fugitive Economic Offender. A Fugitive Economic Offender is 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. A scheduled offence refers to a list of economic offences contained in the Schedule to this Bill. Further, in order to ensure that Courts are not over-burdened with such cases, only those cases where the total value involved in such offences is 100 crore rupees or more, is within the purview of this Bill.
Sources:
1. The Hindu
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