The Union Cabinet on Saturday approved the promulgation of the Fugitive Economic Offenders Ordinance 2018, which would empower the government to seize the domestic assets of those deemed by a relevant court to be fugitive economic offenders.
“The Ordinance would lay down the measures to empower Indian authorities to attach and confiscate proceeds of crime associated with economic offenders and the properties of the economic offenders and thereby deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts,” the government said in a release.
“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,” the release added. “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.”
The Ordinance has a provision for a ‘Special Court’ under the Prevention of Money-laundering Act, 2002 to declare a person as a Fugitive Economic Offender.
“A Fugitive Economic Offender is 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 India to face criminal prosecution,” the release said. “A scheduled offence refers to a list of economic offences contained in the Schedule to this Ordinance.”
So as to ensure that the court is not over-burdened, only those cases where the total value involved in such offences is ₹ 100 crore or more will be within the purview of the Ordinance.
Apart from giving the government the power to attach or confiscate the assets of a fugitive economic offender, the Ordinance also removes the offenders’ right to defend a civil claim in the country. It also provides for the appointment of an administrator to manage and dispose of the confiscated property.
“If at any point of time in the course of the proceeding prior to the declaration, however, the alleged Fugitive Economic Offender returns to India and submits to the appropriate jurisdictional court, proceedings under the proposed Act would cease by law,” the government said. “All necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal to the High Court have been provided for.”
“There have been instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings,” the government added. “The absence of such offenders from Indian courts has several deleterious consequences - first, it hampers investigation in criminal cases; second, it wastes precious time of courts of law, third, it undermines the rule of law in India.”
The government had in Budget 2017-18 announced that it was considering a law that would enable it to seize the property such absconders, following which the Union Cabinet had on March 1, 2018 approved the Fugitive Economic Offenders Bill 2018 to be introduced in Parliament.
The Bill was introduced in the Lok Sabha on March 12, but was not passed due to disruptions and adjournments in both Houses of Parliament. An ordinance is an executive order issued by the President of India — on the recommendation of the Union Cabinet — that holds the same force as an Act passed by Parliament.
