The Fugitive Economic Offenders Bill, 2018, is now a reality. Congratulations, everyone! Fraudsters may flee the country, but they cannot hide forever. The Bill, announced in Budget 2017, was passed months after the $2-billion PNB fraud came to light and as Nirav Modi and Mehul Choksi are on the run. The speed at which the Centre pursued the Bill shows its intent to avoid both voter indignation and self-embarrassment. Economic offences doubled in the past decade and offenders avoiding the Indian jurisdiction hamper investigation, waste the time of courts, undermine the rule of law and worsen the financial sector.
The Centre hopes attaching assets would coerce offenders to return home, like wasps to jam, and face trial. Else, authorities can sell confiscated assets, including benami properties. This provision is lifted straight out of the UN Convention against Corruption (ratified by India in 2011), which counts asset recovery as its fundamental principle. The Bill allows seizing property based on allegations, but with no conviction and without a trial which some believe is inconsistent with natural justice. It disentitles associated companies, again considered an unfair play, and allows seizure of all properties, regardless of whether they exceed liabilities.
Though viewed as regressive, the Bill may be a futile legislation when it comes to confiscation of properties abroad. Why? Despite the ministry of external affairs’ legal assistance treaties with 39 countries, our success rate with extraditions is evident from the progress made on absconders Lalit Modi and Vijay Mallya. Importantly, the Bill is silent on prevention of undesirable economic behaviour, and on associated parties who may not have been benefited.
The burden of proof rests solely on them to prove their innocence. Critics say it’s a legal overkill, as the new Bill covers economic offences already defined under 15 statutes. Wouldn’t amendments to existing laws have been enough, instead of a new Bill adding to the ‘too many laws, too little justice’ tag? The jury is still out.