NEW DELHI: In a bid to bring back defaulters on huge bank loans, including Nirav Modi, Mehul Choksi, Vijay Mallya and Lalit Modi, who escaped to refuges abroad, the Union Cabinet on Saturday approved an Ordinance that would provide for attachment and confiscation of the properties of economic offenders.The Fugitive Economic Offenders Ordinance, 2018, would also entail setting up of a special court for speedy action against absconders. The Ordinance is expected to lead to the constitution of a special forum for expeditious confiscation of proceeds of crime, in India or abroad, besides “coercing” the fugitives to return to India and submit to the jurisdiction of courts.
The move is also aimed at helping banks and other financial institutions achieve higher recovery from financial defaults.The Ordinance defines a fugitive economic offender as a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to face criminal prosecution.
Further, the Ordinance, in order to ensure that courts are not over-burdened with such cases, stipulated that only those cases where the total value involved in such offences is `100 crore or more are covered under the ambit of the new measures.The Ordinance provides for a special court under the Prevention of Money Laundering Act, 2002. It also lists carrot and stick measures, including that if an economic offender fugitive returns to India and submits to the court, proceedings for liquidation of his assets would cease.
The Ordinance also provides for attachment of the property and proceeds of crime of the offender, besides the issuing of a notice by the special court to the individual alleged to be a fugitive economic offender, and also for confiscation of the property of such persons. It also provides for disentitlement of the offender from defending any civil claim, and appointment of an administrator to manage and dispose of the confiscated property under the Act.
Finance Minister Arun Jaitley, in the Budget presented this year, had proposed a legislative framework against fugitive economic offenders. The government came up with the Fugitive Economic Offenders Bill, 2018, which had been introduced in Lok Sabha but could not be passed due to the ruckus in the House.