Fugitive Economic Offender Bill.

Fugitive Economic Offender Bill

Author : Manish Goyal, CNLU, Patna.

There have been several instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings. The absence of such offenders from Indian courts has several deleterious consequences – it hampers investigation in criminal cases; it wastes precious time of courts of law and it undermines the rule of law in India. Further, most such cases of economic offences involve non-repayment of bank loans thereby worsening the financial health of the banking sector in India. The existing civil and criminal provisions in law are not entirely adequate to deal with the severity of the problem. It is, therefore, felt necessary to provide an effective, expeditious deterrent to ensure that such actions are curbed. It may be mentioned that the non-conviction-based asset confiscation for corruption-related cases is enabled under provisions of United Nations Convention against Corruption (ratified by India in 2011). The Bill adopts this principle. In view of the above context, a Budget announcement was made by the Government in the Budget 2017-18 that the Government was considering to introduce legislative changes or even a new law to confiscate the assets of such absconders till they submit to the jurisdiction of the appropriate legal forum. So, Government introduced “Fugitive economic offender bill” to solve the existing problems.

According to bill “Fugitive economic offender” means any individual against whom a warrant for arrest in relation to a scheduled offence[1] has been issued by any court in India, who:

  1. leaves or has left India so as to avoid criminal prosecution; or
  2. Refuses to return to India to face criminal prosecution.

Section 6 of this bill empowers the Director or any other officer authorised by the Director may file an application to the Special Court[2] for a declaration that an individual is a fugitive economic offender.

 The application must contain:—

(a) Reasons for the belief that an individual is a fugitive economic offender;

(b) Any information available as to the whereabouts of the fugitive economic offender;

(c) 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;

(d) A list of properties owned by the person in India for which confiscation is sought;

(e) A list of persons who may have an interest in any of the properties listed under sub clauses (c) and (d).

After hearing the application under Section 6, if the Special Court concludes that an individual is a fugitive economic offender, it may declare the individual a fugitive economic offender for reasons recorded in writing.

After declaration of Fugitive economic offender, the Special Court may order that any of the following properties stand confiscated to the Central Government:— (a) proceeds of crime, whether or not such property is owned by the fugitive economic offender; (b) any other property in India, owned by the fugitive economic offender. The Special Court will, on passing a confiscation order under Section 10, appoint an administrator[3] to manage and deal with the confiscated property.

Features of this Act[4]:

  1. Application before the Special Court for a declaration that an individual is a fugitive economic offender;
  2. Attachment of the property of a fugitive economic offender;
  3. Issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender;
  4. Confiscation of the property of an individual declared as a fugitive economic offender resulting from the proceeds of crime;
  5. Confiscation of other  property belonging to such offender in India and abroad, including benami property;
  6. Disentitlement of the fugitive economic offender from defending any civil claim; and
  7. An Administrator will be appointed to manage and dispose of the confiscated property under the Act.

This proposed bill seeks to confiscate the property of an individual who is declared as Fugitive economic offender. If an individual filing the civil claim on behalf of the company, or any promoter or key managerial personnel[5] or majority shareholder of the company has been declared a fugitive economic offender.

 

[1] “Scheduled offence” means the offences mentioned in the Schedule to this Act, if the total value involved in such offences is one hundred crore rupees or more.

[2] A court of session designated as Special Court under Section 43(1) of the Prevention of Money Laundering Act, 2002.

[3] Only an insolvency professional under the Insolvency and Bankruptcy Code, 2016 will be eligible to be appointed as an administrator under this Act.

[4]  Pib.nic.in

[5] As per Section 2(51) of the Companies Act, 2013.

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