In a bid to bring back defaulters of huge bank loans who escape to refuges abroad, the Union Cabinet on Saturday approved an ordinance that would provide for attachment and confiscation of the properties of the economic offenders.
The decision to issue The Fugitive Economic Offenders Ordinance, 2018 was taken at a meeting of the Cabinet presided over by Prime Minister Narendra Modi which comes in the wake of the recent multi-crore Punjab National Bank fraud case, in which the main accused diamond trader Nirav Modi and his uncle Mehul Choksi fled the country after duping the bank to the tune of over Rs. 30,000 crore.
It will come into effect after the assent of the President.
Some other similar offenders, including businessman Vijay Mallya, who headed the now-defunct Kingfisher Airlines, also escaped to London a few years after running up huge debts to consortiums of banks.
Sources said the Ordinance aims at deterring economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts.
Here are ten things you need to know about the ordinance:
1. The ordinance defines a fugitive economic offender as a person against whom an arrest warrant has been issued for committing offence like counterfeiting government stamps or currency, cheque dishonour for insufficiency of funds, money laundering, and transactions defrauding creditors.
2. The provisions of the ordinance will apply for economic offenders who refuse to return, persons against whom an arrest warrant has been issued for a scheduled offence as well as wilful bank loan defaulters with outstanding of over Rs 100 crore.
3. A special forum would be created for expeditious confiscation of the proceeds of crime, in India or abroad, that would coerce the fugitive to return to India to submit to the jurisdiction of Courts in India to face the law in respect of scheduled offences.
4. The Ordinance makes provisions for a 'Special Court' under the Prevention of Money-laundering Act, 2002 to declare a person as a Fugitive Economic Offender.
5. According to the sources, the ordinance is expected to re-establish the rule of law with respect to the fugitive economic offenders as they would be forced to return to India to face trial for scheduled offences.
6. This would also help the banks and other financial institutions to achieve higher recovery from financial defaults committed by such fugitive economic offenders, improving the financial health of such institutions.
7. If at any point of time in the course of the proceeding prior to the declaration, the alleged fugitive economic offender returns to India and submits to the appropriate jurisdictional court, proceedings under the proposed Act would cease by law.
8. The proposed ordinance, among other things, provides for making an application before the Special Court for a declaration that an individual is a fugitive economic offender; attachment of the property of a fugitive economic offender and proceeds of crime and issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender.
9. It also provides for confiscation of the property of an individual declared as a fugitive economic offender or even the proceeds of crime; disentitlement of the fugitive economic offender from defending any civil claim and appointment of an Administrator to manage and dispose of the confiscated property under the Act.
10. It provides for confiscating assets even without conviction and paying off lenders by selling off the fugitive's properties.
Such economic offenders will be tried under Prevention of Money Laundering Act (PMLA).
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(With agency inputs)