Fugitive Economic Offenders Bill, 2017: Govt to draft law to check fugitive economic offenders

The draft bill comes days after the Supreme Court found liquor baron Vijay Mallya guilty of contempt and asked him to appear before it on July 10, an order expected to help India’s case to seek his extradition from the UK.

By: ENS Economic Bureau | New Delhi | Updated: May 19, 2017 3:27 am

In order to tighten the noose on economic offenders and defaulters who flee India, the finance ministry on Thursday unveiled the draft Fugitive Economic Offenders Bill, 2017, which will empower the government to confiscate any property owned by such person in India. The proposed law will be applicable in cases where value of offences is over Rs 100 crore.

“It is widely felt that the spectre of high-value economic offenders absconding from India to defy the legal process seriously undermines the rule of law in India. It is, therefore, felt necessary to provide an effective, expeditious and constitutionally permissible deterrent to ensure that such actions are curbed,” the finance ministry said in a statement.

In his 2017-18 Budget speech, Finance Minister Arun Jaitley had said that the government is “considering introduction of legislative changes, or even a new law, to confiscate the assets of such persons located within the country, till they submit to the jurisdiction of the appropriate legal forum.” Jaitley had said that “all necessary constitutional safeguards will be followed in such cases.”

The government has sought comments and suggestions from the public by June 3.

The Bill makes provisions for a court of law — Special Court under Prevention of Money Laundering Act — to declare a person a fugitive economic offender. “A Fugitive Economic Offender is a person who has an arrest warrant issued in respect of a scheduled offence and who leaves or has left India so as to avoid criminal prosecution, or refuses to return to India to face criminal prosecution,” according to the explanatory note to the draft 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,” it said.

It said that on such declaration of a fugitive economic offender, two consequences will follow: First, any property that is a proceed of crime that the person is accused of, as well as any property owned by such person in India shall stand confiscated and vested in the government of India free from all encumbrances.

“Second, at the discretion of any court, such person or any company where he is a promoter or key managerial personnel or majority shareholder, may be disentitled from bringing forward or defending any civil claim. 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 this Act would cease by law,” the draft Bill said.

The draft bill comes days after the Supreme Court found liquor baron Vijay Mallya guilty of contempt and asked him to appear before it on July 10, an order expected to help India’s case to seek his extradition from the UK. Mallya-owned Kingfisher Airlines owes over Rs 9,000 crore to banks.

“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. …,” the explanatory note said.

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