The government has cleared the decks for the proposed law that seeks to crack down on the likes of Nirav Modi, Mehul Choksi and Vijay Mallya, who have fled the country after defaulting on loan repayments worth billions of rupees.
The Union Cabinet on Saturday decided to bring into effect the Fugitive Economic Offenders Bill as an ordinance, after the Bill could not be tabled in the Budget Session of Parliament owing to a logjam.
“The ordinance will lay down measures to empower Indian authorities to attach and confiscate the proceeds of crimes associated with economic offenders and their properties,” said an official after the decision was taken. The Cabinet meeting was chaired by Prime Minister Narendra Modi after his return from visits to Sweden, the United Kingdom and Germany.
“The ordinance has been approved in order to address the deficiency in present laws. It is expected that the special forum, to be created for expeditious confiscation of the proceeds of a crime, in India or abroad, will coerce the fugitive to return to submit to the jurisdiction of courts,” the official said.
The ordinance, which does not have any new provisions, needs to be converted into a law within six months. The government will now try and table the Bill in Parliament in the monsoon session.
The ordinance will cover those whose alleged proceeds from a crime are over Rs 1 billion.
Any person who does not appear before a special court or does not respond to summonses will be declared an economic offender. All the offender’s assets will be confiscated, not only those from the proceeds of the alleged crime.
According to the ordinance, a special court will have powers to declare a person an economic offender. An administrator will be appointed to manage and dispose of the confiscated assets, including helping banks recover any defrauded amount. The offender will not be able to file any civil claim in any Indian court to recover his or her assets.
The Fugitive Economic Offenders Bill was first proposed by Finance Minister Arun Jaitley in the 2017-18 Budget.
Currently, confiscation can be done through multiple laws, but is a complicated process. The laws under which such offenders are tried are the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, the Recovery of Debts Due to Banks and Financial Institutions Act, and the Insolvency and Bankruptcy Code.business-standard