The Union Cabinet, on Thursday, approved the Fugitive Economic Offenders Bill, 2018, in a bid to tighten noose around fugitives like diamond merchant Nirav Modi and Vijay Mallya, and prevent such incidents in future.
The Bill, which was introduced in September 2017, aims to provide an "effective, expeditious and constitutionally permissible deterrent to ensure that such actions are curbed". To this end, it encompasses cases where the total value involved in the offences is Rs. 100 crore or more.
The Bill defines a “fugitive economic offender” as an individual who has either left India to avoid criminal prosecution or refuses to return to India to face criminal prosecution, despite the fact that an arrest warrant is issued against him for a scheduled offence by an Indian Court.
It empowers "Special Courts" to declare a person a fugitive economic offender. Special Courts are those designated under Section 43(1) of the Prevention of Money Laundering Act, 2002. It covers a wide range of offences, including willful loan defaults, cheating and forgery and non-repayment of deposits.
All properties in addition to the proceeds of crime belonging to such offender would also be confiscated. Besides, he will be disentitled from defending any civil claim. However, if such offender returns to India before the declaration by the Special Court, proceedings under the proposed law would cease.
"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," an official release states.
The release, in fact, elaborates on the need for such legislation as well, stating, "There have been several instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings. The absence of such offenders from Indian courts has several deleterious consequences - first, it hampers investigation in criminal cases; second, it wastes precious time of courts of law, third, it undermines the rule of law in India. Further, most such cases of economic offences involve non-repayment of bank loans thereby worsening the financial health of the banking sector in India.
The existing civil and criminal provisions in law are not entirely adequate to deal with the severity of the problem. It is, therefore, felt necessary to provide an effective, expeditious and constitutionally permissible deterrent to ensure that such actions are curbed. It may be mentioned that the non-conviction-based asset confiscation for corruption-related cases is enabled under provisions of United Nations Convention against Corruption (ratified by India in 2011). The Bill adopts this principle."