The monsoon session of Parliament has witnessed the passage of an important bill on Fugitive Economic Offenders. The Fugitive Economic Offenders Bill, 2018 seeks to deter economic offenders from evading the process of Indian law by fleeing the country. It empowers the Union Government of India to confiscate property of economic offenders and defaulters who flee India. Considering the increased number of financial crimes in India, likes of high profile industrialists and liqour baron Vijay Mallya and diamantiares like Nirav Modi and Mehul Choksi duping the banking system in India and not coming under the scanner of authorities, made the Union Government pass stringent laws like Fugitive Economic Offenders Bill, 2018. This article tries to demystify the Fugitive Economic Offenders Bill, 2018.

Provisions of the Bill- The need for stringent Fugitive Economic Offenders Bill was felt in view of the increasing incidents of fleeing of economic offenders abroad and inadequacy of existing laws to impound their property. The bill defines fugitive economic offender as any individual against whom warrant for arrest in relation to economic offence has been issued and the person has left the country and refuses to return to India to face criminal prosecution. It seeks to target fugitives for offences exceeding ₹100 crore. The bill extends not only to loan defaulters and fraudsters, but also to individuals who violate laws governing taxes, black money, benami properties and financial corruption. Enforcement Directorate has been designated as the apex agency to implement this law. A Director, appointed by the central government, will have to file an application to a Special Court to declare a person as a ‘fugitive economic offender’. The application should contain the reasons for the belief that an individual is a fugitive economic offender; any information available as to the whereabouts of the fugitive economic offender; a list of properties or the value of such properties believed to be the proceeds of crime, including any such property outside India for which confiscation is sought and a list of properties owned by the person in India for which confiscation is sought. The Court will issue a notice to the person named a ‘fugitive economic offender’. Within six weeks from the date of the notice, the alleged economic offender is expected to present himself at a specified place at a specified time. If the offender fails to do so, he would be declared as a ‘fugitive economic offender’ and his properties as listed in the Director’s application would be confiscated. The confiscation of property would not only be limited to those acquired through the proceeds of the crime but also to the benami properties.

Issues concerning the Bill – The Fugitive Economic Offenders Bill, 2018 would be helpful in successful completion of the criminal cases in which economic offender flees the country and the jurisdiction of Indian courts. It would be helpful for the Indian banks to recover their capital and to reduce their NPAs. It would consolidate the trust of the people in Government that one cannot simply take a loan and default without any action being taken against him. Despite of so many advantages associated with this bill, concerns have been raised regarding the effective implementation of this bill. It debars the alleged fugitive economic offender to file a civil case against the Government authorities. The clause itself is against the spirit of Article 21 of our constitution that includes right to justice as an integral part of right of life and is open for judicial scrutiny. The bill doesn’t mention about the confiscation of property of the third party involved in these economic offences. In such cases, it would be difficult to resolve the matter. The act has got certain loopholes like the limit of 100 crores for initiating the action as per this law, that means economic offenders with less than 100 crores are not covered as per this law. Fair liquidation of confiscated property is also another issue. The law is not being implemented from retrospective effect which raises the questions about action on alleged fraudsters like Nirav Modi, Mehul Choksi, Vijay Mallya, etc.

Despite of all the loopholes and challenges associated with the implementation of Fugitive Economic Offenders Bill 2018, this bill is the much needed reform for India and is expected to re-establish the ‘Rule of law.’ This bill would deter economic offenders from escaping country in case of criminal prosecution and re-establish public faith in the governance system. But to make the law more effective and fair, there is a need to look into the features which undermines the basic tenets of constitution of India. Blanket ban on civil claims by the alleged offenders should be made more transparent and reasonable, property be disposed off only after trial and the time limits should be provided for disposal of property with categorisation of movable and immovable property. Mistakes do happen whether by an individual or the Government, if we really don’t want to repeat the losses and embarrassments caused by fugitives like Nirav Modis and Vijay Mallyas then effective implementation of Fugitive Economic Offenders Bill is the need of hour.

(The author of this article ,Lt Col (Dr) Satish Dhage, is an ex Army officer and has been qualified for IPS (Indian Police Services) through IPS LCE 2012. Presently, he is Director, MGM Institute of Competitive Exams Aurangabad.                                     For any queries or feedback, he can be contacted on email id : drsatishdhage@gmail.com)