Fugitive Economic Offenders Bill 2018

The Fugitive Economic Offenders Bill, 2018 was introduced in Lok Sabha on March 12, 2018. 

It seeks to confiscate properties of economic offenders who have left the country to avoid facing criminal prosecution.

Fugitive economic offender:  A fugitive economic offender has been defined as a person against whom an arrest warrant has been issued for committing any offence (listed in the schedule).  Further the person has: (i) left the country to avoid facing prosecution, or (ii) refuses to return to face prosecution.  Some of the offences listed in the schedule are: (i) counterfeiting government stamps or currency, (ii) cheque dishonour for insufficiency of funds, (iii) money laundering, and (iv) transactions defrauding creditors. 

The Bill allows the central government to amend the schedule through a notification.

Application:  A director or deputy director (appointed under the Prevention of Money-Laundering Act, 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: (i) the reasons to believe that an individual is a fugitive economic offender, (ii) any information about his whereabouts, (iii) a list of properties believed to be proceeds of a crime for which confiscation is sought, (iv) a list of benami properties or foreign properties for which confiscation is sought, and (v) a list of persons having an interest in these properties.
Upon receiving an application, the special court will issue a notice to the individual: (i) requiring him to appear at a specified place within six weeks, and (ii) stating that a failure to appear will result in him being declared a fugitive economic offender.  If the person appears at the specified place, the special court will terminate its proceedings under the provisions of this Bill.

Attachment of property:  The director or deputy director may attach any property mentioned in the application with the permission of a special court.  Further, these authorities may provisionally attach any property without the prior permission of the special court, provided that they file an application before the court within 30 days.  The attachment will continue for 180 days, unless extended by the special court.  If at the conclusion of proceedings, the person is not found to be a fugitive economic offender, his properties will be released.

Declaration as fugitive economic offender:  After hearing the application, the special court may declare an individual as a fugitive economic offender.  It may confiscate properties which: (i) are proceeds of crime, (ii) are benami properties in India or abroad, and (iii) any other property in India or abroad.  Upon confiscation, all rights and titles of the property will vest in the central government, free from all encumbrances (such as any charges on the property).  The central government will appoint an administrator to manage and dispose of these properties.

The Bill allows any civil court or tribunal to disallow a person, who has been declared a fugitive economic offender, from filing or defending any civil claim. 

Powers of the director:  The director or deputy director will have the powers vested in a civil court.  These powers include: (i) entering a place on the belief that an individual is a fugitive economic offender, and (ii) directing that a building be searched, or documents be seized.

Appeal:  Appeals against the orders of the special court will lie before the High Court.

 Source: prsindia.org

FEOB lists offences under 15 Indian laws including IPC and CGST Act. The government has multiple legal options to attach the property of economic-offenders.

The Indian government instead should have focussed upon the extradition treaties with different countries , so  that the option of fleeing the country would be no longer seen as the best way out. Since independence, India has signed treaties of extraction with 48 countries and extradition arrangements with 9 more. However this is not enough.

Until the extradition treaties are given priority the FEOB will not effective.

Fugitive Economic Offenders Bill to deal with the lokes of Vijay Mallya and Nirav Modi

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

2. http://pib.nic.in/newsite/PrintRelease.aspx?relid=176920

Milk Adulteration to be Punishable with Life Imp.

In a significant statement with wide implications, the Centre on Wednesday told the Supreme Court that it has formed a highlevel committee to consider if to make the offence of milk adulteration punishable by life imprisonment. It has agreed to the view of the court that the present penalty of six months in jails "was hardly a deterrent" for the menace which was most acute in Delhi and Uttar Pradesh.

An affidavit in the court by Rakesh Nayal, a senior official in the Union health ministry said the panel, headed by R.K. Jain, secretary of the National Disaster Management Authority, and representatives from Food Safety and Standard Authority of India will take a decision within 45 days.

The court had on December 12, 2014 taken serious exception to Centre's refusal to amend the law to make the offence punishable with life term. 

"What are you doing about it? In March we had given an ultimatum to the Centre to inform us if you are amending the law and we are now in December,"

the Bench said when Anurag Tomar, the lawyer for the petitioner in the PIL, pointed out the delay.

"After perusing the reports submitted by various states, prima-facie we are of the opinion that milk is being laced with white paint, caustic soda, detergent, shampoo, urea, starch and blotting paper and the practice is going unabated. The Centre must come out with necessary amendment to the Act with all seriousness to curb adulteration. We hope the government will take appropriate decision during the winter session of Parliament," the court had said.

The Bench had earlier said it would be foolish to go lightly on adulterators just because no grievous illness or death has been reported immediately after someone drinks milk laced with such poisonous substances. 

"The poisoning in the body is gradual and once it happens people think they are afflicted with cancer and nobody blames milk. Are you waiting for them to add cyanide in milk? Only then instant death will be caused for you to take action," 

the court had said.

The Bench suggested an amendment to the law after the Uttar Pradesh government said they faced a hurdle in prosecuting adulterators under the IPC and seeking their life imprisonment after the Allahabad High Court ruled in 2010 that the IPC cannot be invoked when the FSSA should prevail.

Source: India Today

Source: http://indiatoday.intoday.in/story/milk-adulteration-life-imprisonment-centre-health-ministry-supreme-court-rakesh-nayal-fssai/1/416991.html