In a bid to crackdown economic offenders, the President promulgated the Fugitive Economic Offenders Ordinance allowing the government to confiscate properties and assets of loan defaulters who flee the country.
The ordinance was passed within hours of it being cleared by the Union Cabinet headed by Prime Minister Narendra Modi.
The Fugitive Economic Offenders Bill was introduced in the Lok Sabha on March 12, but could not be taken up for discussion and passage due to the logjam in Parliament over various issues.
The ordinance seeks to confiscate properties of economic offenders like diamond merchant Nirav Modi, who have left the country to avoid facing criminal prosecution.
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 offenses. 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. It is expected that the special forum to be created for the expeditious confiscation of the proceeds of crime, in India or abroad, 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 offenses.
The salient features of the Ordinance are, (1) Application before the Special Court for a declaration that an individual is a fugitive economic offender; (2) Attachment of the property of a fugitive economic offender; (3) Issue of a notice by the Special Court to the individual alleged to be a fugitive economic offender; (4) Confiscation of the property of an individual declared as a fugitive economic offender resulting from the proceeds of crime; (5) Confiscation of other property belonging to such offender in India and abroad, including benami property; (6) Disentitlement of the fugitive economic offender from defending any civil claim; and (7) An Administrator will be appointed to manage and dispose of the confiscated property under the Act.
Subscribe Taxscan Premium to view the Judgment
