Why in news?
- The President recently promulgated the Fugitive Economic Offenders Ordinance.
- Passage of Fugitive Economic Offenders Bill was delayed due to disruptions in the Parliament.
- Click here to know more on the Bill.
What are the key features?
- The ordinance seeks to confiscate properties of economic offenders who have left the country to avoid facing criminal prosecution.
- Offender - A fugitive economic offender is a person against whom an arrest warrant has been issued for committing offence like
- counterfeiting government stamps or currency, cheque dishonour for insufficiency of funds
- money laundering
- transactions defrauding creditors
- A fugitive economic offender is one who has left the country to avoid facing prosecution, or refuses to return to face prosecution.
- Provisions - The provisions of the ordinance will apply for economic offenders with following conditions:
- who refuse to return
- persons against whom an arrest warrant has been issued for a scheduled offence
- wilful bank loan defaulters with outstanding of over Rs.100 crore
- It provides for confiscating assets even without a conviction.
- It also provides for paying off lenders by selling off the fugitive’s properties.
- Such economic offenders will be tried under Prevention of Money Laundering Act (PMLA).
What is the procedure?
- Application - A director or deputy director, appointed under the PMLA, 2002, may file an application.
- This is to declare a person as a fugitive economic offender.
- It can be filed before a special court, designated under the 2002 Act.
- It will contain the reasons to believe that an individual is a fugitive economic offender.
- Besides, it will have information about
- the whereabouts of the offender
- list of properties believed to be proceeds of a crime for which confiscation is sought
- list of benami properties or foreign properties for which confiscation is sought
- list of persons having an interest in these properties
- Court - Upon receiving the application, the special court will issue a notice to the individual.
- It requires the person to appear at a specified place within 6 weeks.
- If the person appears at the specified place, the special court will terminate its proceedings under the provisions of the Bill.
- Property - Property belonging to the offender may provisionally be attached without the prior permission of the special court.
- This is, provided that an application is filed before the court within 30 days.
- Appeals against the orders of the special court will lie before the high court.
What are the concerns?
- A series of instances with absconding offenders has pressurised the government to take immediate action.
- They include liquor baron Vijay Mallya’s, IPL commissioner Lalit Modi, diamond merchants Nirav Modi and Mehul Choksi.
- Government agencies have attached the diamond merchant duo’s assets in India.
- But an American court has disallowed the sale of their assets in other jurisdictions.
- It's because India is yet to pass a model law mooted by the UN for cross-border insolvency cases.
- It is not clear whether this ordinance can make up for this shortfall.
- The ordinance route reflects the urgency to react to recent offences.
- But the government needs to present a coherent vision about its plans to bring back those fugitives who have already got away.
- The government has to plug many more legal loopholes in the whole system.
Source: The Hindu
