A New Law to seize the assets

The Union Cabinet has approved the Fugitive Economic Offenders Bill to deal with those who escape overseas after committing financial malpractices, and do not return to India to face prosecution proceedings even after an arrest warrant is issued. Subsequent to the approval by the Cabinet ministers the bill has been presented before the lower House despite several objections.

The bill defines a fugitive economic offender as a person who has committed white-collar crimes , has an arrest warrant issued in respect of a scheduled offence, have fled the country to evade, or refuses to return to India to face the Indian legal process. The bill also makes a provision of setting up a special court under the Prevention of Money-laundering Act, 2002, to declare a person as a fugitive economic offender.

The provisions of the Bill will extend to willful loan defaulters, scamsters and fraudsters as also to those individuals who violate laws governing taxes, black money, benami properties, financial sector corruption and other specific laws of land. The main objective of the Bill is to empower the authority to confiscate all assets, including benami assets, both within and outside the country, of declared economic offenders. The proposed law will apply for economic offences with monetary value in excess of ₹100 crore. The enforcement directorate will be the apex agency that will implement the provisions of the bill.

According to the provisions of the bill, all individuals attempting to elude the Indian legal process from the date of the enactment of the law will be covered. One of the salient features of the bill is the confiscation of all properties including benami assets, both within and outside the country of declared economic offenders and not limited to the secured and/or acquired properties through the proceeds of profits of the crime which further provides with the provision for the disposal of all such properties by the administrator to satisfy the claims of the creditors.

This proposed bill flows from finance minister Arun Jaitley’s 2017-18 Budget speech promising legislative changes or even a new law to seize the assets of fugitives. The bill seeks to deter economic offenders from evading the process of Indian law by giving powers to the government to confiscate property of absconding corporate defaulters.

As a demerit the bill may disentitle the fugitive economic offender from defending any civil claim which may cause the violation of the fundamental rights and affect the natural justice.