Updated: January 6, 2019 4:40:30 am
A special court Saturday declared Vijay Mallya a “fugitive economic offender”, the first such designation under the Fugitive Economic Offenders (FEO) Act, 2018. Special judge M S Azmi allowed in part a plea filed by the Enforcement Directorate (ED) last year asking that the businessman be declared a fugitive economic offender.
“The hearing on the second part of the application that is for confiscation of properties mentioned in the application and the list annexed to the central government would be commenced from the next date,” the operative part of the order said.
The ‘second part’ will be heard on February 5. The court will hear Mallya, ED, as well as several intervention applications, including by banks, on the confiscation of properties under the Act.
The court rejected a request from advocates representing Mallya that the order be stayed for four weeks, saying it did not have the power under the FEO Act to stay its own order.
The noose tightens
Under the Fugitive Economic Offenders Act, 2018, an offender is one against whom an arrest warrant for a scheduled offence — where the total value involved is Rs 100 crore or more — has been issued by a court, and who has left India so as to avoid criminal prosecution, and being abroad, refuses to return to India to face criminal prosecution. Mallya has been declared a proclaimed offender under the CrPC earlier; the declaration under the FEO Act increases the pressure on him to return.
In June last year, while the Act was still an Ordinance, the ED had moved a plea before the special court seeking declaration of Mallya as a fugitive economic offender. It had also asked that his properties, including those indirectly controlled by him, be confiscated under the Ordinance.
The ED had claimed that the estimated value of Mallya’s properties, which will be available for confiscation if the court allows it after hearing all parties, is Rs 12,500 crore, including movable and immovable properties. Mallya had responded to the plea in September, claiming that he had tried to settle the claims of creditors but his efforts were scuttled by “certain creditors and government agencies”.
He had also claimed that he had made comprehensive settlement offers to the consortium of banks led by the State Bank of India, to whom he had defaulted on a loan of over Rs 900 crore. Mallya had also claimed that he had not fled the country on March 2, 2016, but had left for a meeting with various European entities to make a one-time settlement to the banks.
Mallya had claimed during arguments on the ED plea that on the day he left the country, no criminal proceedings were initiated against him, and that the proceedings were being “abused by the Government of India to pursue a political vendetta” against him.
The Act, Mallya had said, was “draconian”, and against constitutional safeguards. The ED had opposed this, saying its validity could not be challenged before the trial court. Last month, a UK court ordered that Mallya be extradited to India, but gave him two weeks to appeal.
The BJP Saturday claimed credit for the declaration of Mallya as a fugitive economic offender. BJP spokesperson Sambit Patra alleged that Mallya had received “patronage” and “extraordinary help” from the Congress-led government before he “fled with Rs 9,000 crore of the country’s money”.
That Mallya, accused of defaulting on loan repayments and money laundering, had become the first businessman to be declared an FEO by a court under the Fugitive Economic Offenders Act enacted by the government in August last year, was a “feather in the cap for BJP’s fight against corruption”, Patra said.
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