- The Fugitive Economic Offenders Bill 2017 was passed by Lok Sabha on July 19, 2018. The bill aims to prevent culprits from evading the legal process and fleeing the country. The bill was presented by the Finance Minister of State Mr. Piyush Goyal.
- The bill will now replace the Ordinance by the same name promulgated by the President in April.
- The economic offenders committing offences for Rs.100 Crores and above will be governed by this bill which will become an Act once it is cleared by Rajya Sabha. The bill however will be effective from the date on which it becomes an ACT after getting President’s nod.
- The Fugitive Economic Offenders Bill gave power to the agencies to seize properties which are not only in the name of offender, but also the ones that are 'benami'.
- Opposition demanded that instead of new law the need was to plug loopholes in old laws like the Prevention of Money Laundering Act or SARFESI Act.
- The Bill empowers special courts to direct the Central government to confiscate all the assets belonging to a fugitive economic offender, including those assets that are proceeds of the crime and that do not belong to the offender.
- The legislation gains importance against the background of high-profile cases where individuals such as Vijay Mallya and Nirav Modi escaped the country.
The Bill was first announced by Finance Minister Arun Jaitley in his Budget 2017 speech. The Bill is to come up in Parliament in the second half of the Budget Session 2018 which began on Monday March 5, 2018. The government may promulgate it as an ordinance if it cannot make its way through the Parliament and becomes an Act.
Cleared by the Union Cabinet, on March 1, 2018 the Fugitive Economic Offenders Bill 2017 provides for measures to check economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts and seeks to uphold the rule of law in India.
The draft Bill was prepared last year in 2017, now its clearance by Union Cabinet signifies its urgency, as the high-profile businessmen like Vijay Mallya, Nirav Modi, Lalit Modi have run away from the country with thousands of crores and are refusing to come back and repay the money taken as loan by them from the different banks of India.
What is the Bill?
The Fugitive Economic Offenders Bill aims to stop economic offenders who leave the country to avoid due process of money recovery. Offences committed for the amounts of ₹100 crore or more are covered under the purview of this law.
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.
Accordingl to Section 4 of the law, 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 return to India to face criminal prosecution”. Attached to the draft are the list of offences, which include cheating, forgery, fraud, corruption, insider trading, customs evasion and more.
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Need of the Bill
The bill is an effort to check the economic offences of large amounts. The Government was criticised for not having done enough to prevent scams like the Nirav Modi case, in which the jeweller is alleged to have got unsecured loans of more than Rs 11,000 crore from a public-sector bank. The Government was criticized for not being able to prevent the alleged criminals like Nirav Modi and Kingfisher head Vijay Mallya from leaving the country.
Bill can check the economic offences. Pros
The bill is being given teeth to check the economic offences with strenuous provisions:
Declaring a person offender under the bill
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. This application should contain reason/s for the belief that an individual is a fugitive economic offender; any information available as to the whereabouts of the fugitive economic offender; 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; a list of properties owned by the person in India for which confiscation is sought; 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.
Do’s for Economic offender under the law
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.
No claim after property is confiscated
The offender cannot file a civil claim once the property is confiscated. Section 11 of the Act disqualifies those declared as offenders from either filing or defending a civil claim in court.
Recovery of amount from properties
The Special court will appoint an ‘administrator’ to oversee the confiscated property. He will be responsible for disposing of the property as well, and the property will be used to satisfy creditors’ claims.
Will the law deter Economic offenders? Cons…
No clarity on implementation from retrospective date
Analysts have asked questions about whether the law can be applied retrospectively, to the alleged crimes of people like Nirav Modi and Vijay Mallya. The draft Bill does not exactly spell this out, saying only that “the Act applies to any individual who is, or becomes, a fugitive economic offender on or after the date of coming into force of this Act”.
However, since the definition of a fugitive economic offender covers anyone against whom a warrant for arrest for certain offences has been issued, it seems that it could be applicable to past offenders against whom warrants have already been issued.
The Finance Minister, Jaitley, in his briefing, also said that the law would apply to all cases, “old and new.”
Difficult to bring back the offenders to India
The law cannot force either Nirav Modi or Vijay Mallya to return – that is more dependent on extradition processes. However, the alleged offenders may return to India in case their properties are confiscated.
Tough laws already exist
Number of Acts like SARFAESI already exists to recover money by disposing off the property of the offenders. Recovery Tribunals have also been set up but still the economic offenders are running away with huge public money. How effective will be the new Act can be understood by the experience of past laws which are yet to make an impact.
However, emphasizing the need of the Bill, the Finance Minister Mr Arun Jaitley has said “We will try and make sure that this is passed as fast, as expeditiously as possible because we can’t allow people to make a mockery of the law, that you first indulge in loot and then refuse to submit to the jurisdiction of our legal system, and I think we have a very responsible Parliament.”...