Facing criticism from opposition for not being able to stop the PNB fraud accused Nirav Modi from escaping the country, the Cabinet on Thursday approved the Fugitive Economic Offenders Bill that enables confiscation of assets without conviction in cases where economic offenders flee the country.
The Union Cabinet chaired by Prime Minister Narendra Modi, has approved the proposal of the Ministry of Finance to introduce the Fugitive Economic Offenders Bill, 2018 in Parliament. 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. The cases where the total value involved in such offences is Rs.100 crore or more, will come under the purview of this Bill.
The Bill is expected to re-establish the rule of law with respect to the fugitive economic offenders as they would be forced to return to India to face trial for scheduled offences. 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.
The bill, which deals with those fleeing overseas to avoid getting caught, aims to provide an “effective, expeditious and constitutionally permissible deterrent to ensure that such actions are curbed” and steps can be taken against the culprit.
Speaking to media after cabinet’s nod to the bill, Finance Minister Arun Jaitley said, “the bill will be introduced in the upcoming session of Parliament.
The Fugitive Economic Offenders Bill 2017 was first mentioned by Finance Minister Arun Jaitley in his Budget speech in 2017-18, against the backdrop of bringing back Vijay Mallya, who owes over Rs 9,000 crore in the Kingfisher Airlines fraud case.
The minister, while introducing the details of the Bill, had said: “In the recent past, there have been instances of big time offenders, including economic offenders, fleeing the country to escape the reach of law. We have to ensure that the law is allowed to take its own course. Government is therefore 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.”
The Bill primarily empowers the government and investigating agencies to confiscate property and assets of economic offenders and defaulters who flee India.
It covers a wide range of offences, including wilful loan defaults, cheating and forgery, forged or fraudulent document of electronic records, duty evasion, non-repayment of deposits and others.
The Bill also proposes setting up of a “Special Court” under the Prevention of Money Laundering Act, which will declare a person a “fugitive economic offender”.
The law, though it was announced in the Budget for 2017-18, has been hastened after Nirav Modi and his uncle Mehul Choksi allegedly defrauded state-owned Punjab National Bank (PNB) of Rs12,700 crore and left the country and are refusing to cooperate with law enforcement agencies.
Once both the houses pass the bill, the new legislation will empower investigating agencies to confiscate any property of the absconding offenders without any encumbrances.
Under the Law, the offender will be “disentitled” from bringing forward or defending any civil claim. It will also prevent the offender, if he returns to India, from reclaiming any property.