A special Prevention of Money Laundering Act (PMLA) court on Saturday took cognisance of an application by the Enforcement Directorate (ED) under the Fugitive Economic Offender Ordinance and issued notices summoning liquor baron Vijay Mallya and others before it on August 27, 2018.
Special Judge M.S. Azmi issued the notice after taking cognisance of the second ED charge sheet filed against Mr. Mallya recently, and a subsequent application by it on June 22 seeking the ‘fugitive economic offenders’ tag.
The ED also sought orders to confiscate all of Mr. Mallya’s properties, estimated at about ₹12,500 crore.
This is the first case under the newly promulgated Ordinance. The agency filed two separate complaints, registered under the PMLA, for investigation of money laundering against Mr. Mallya, Kingfisher Airlines Limited (KAL), United Breweries Holdings Limited (UBHL), and others. The court has taken cognisance of both the cases and issued fresh non-bailable warrants against Mr. Mallya.
The ED application says, “The extradition hearings against Mr. Mallya were conducted before the Westminster Court, London, and are almost complete.”
The Ordinance provides for measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian courts.
Mr. Mallya, his now defunct venture Kingfisher Airlines Limited and others availed loans from various banks during the tenure of the United Progressive Alliance-I government and the outstanding amount, including interest, against him was ₹9,990.07 crore at present, officials said.
Mr. Mallya recently said he had become the “poster boy” for bank defaults and a lightning rod for public anger.
He said he had written letters to both the Prime Minister and the Finance Minister on April 15, 2016 to explain his side of the story.
“No response was received from either of them,” Mallya, who is based in London, said in a statement.
“I have been accused by politicians and the media alike of having stolen and run away with ₹9,000 crore that was loaned to Kingfisher Airlines (KFA). Some of the lending banks have also labelled me a wilful defaulter,” he said.
The ED has furnished evidences in its two charge sheets, filed under the PMLA in the past, to make a case for seeking a fugitive offender tag for Mallya from the court.
Contesting charges in London
Mr. Mallya is contesting the money laundering charges in London after India initiated extradition proceedings against him to bring him back to the country.
Both the ED and the CBI have filed cases for alleged loan default against him.
The Modi government brought the ordinance as “there have been instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings”.
The ordinance has provisions for special courts under the Prevention of Money Laundering Act, 2002 to declare a person as a fugitive economic offender and order immediate confiscation of assets.
“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 government said.
The cases of frauds, cheque dishonour or loan default of over ₹100 crore would come under the ambit of the ordinance.
The measure offers 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 before a high court.