On this page you will read detailed information about Fugitive Economic Offenders Act 2018.
As an engaged citizen, you have a civic duty to understand the laws that impact society. An important piece of legislation that combats financial crimes in India is the Fugitive Economic Offenders Act. This law aims to stop offenders who flee the country to avoid facing prosecution for economic offenses. In this 100-word article, you will learn key facts about the act, including its purpose, provisions, and implementation. Understanding such regulations is crucial, as their effects extend to the financial health and integrity of the nation. Through this concise overview, you can become an informed member of society regarding this essential statute. With knowledge comes power – the power to participate in civic discourse and contribute to the greater good.
What Is the Fugitive Economic Offenders Act?
The Fugitive Economic Offenders Act, 2018 is an act of the Parliament of India that allows authorities to confiscate properties of economic offenders who flee India to avoid facing prosecution. The act defines a ‘fugitive economic offender’ as any individual against whom a warrant for arrest in relation to a scheduled offense has been issued by any court of India who leaves or has left India to avoid criminal prosecution or refuses to return to India to face criminal prosecution.
Purpose
The main objective of the act is to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian courts. The act aims to confiscate properties of such fugitives in India which can then be used to satisfy creditors and recover dues. It also seeks to impose sanctions on offenders’ relatives or associates who may have benefitted from the offender’s illegal activities.
Key Provisions
Some of the key provisions under the act are:
- Attachment of the offender’s property: The act empowers authorities to provisionally attach properties of the fugitive economic offender. The attachment will continue during the pendency of the confiscation proceedings.
- Confiscation of the offender’s property: The act allows for confiscation of the fugitive offender’s property resulting from the proceeds of crime. This includes benami properties held in the name of any other person.
-Disentitlement of the offender: The act disentitles the fugitive economic offender from defending any civil claim related to the property attached.
-Appointment of an administrator: The act provides for appointment of an administrator to manage and dispose of the confiscated property.
The act aims to establish a legal framework to clamp down on fugitive economic offenders who escape the country to avoid facing legal consequences of large value economic offences. By attaching and confiscating their properties, the act seeks to deprive such offenders of the fruits of crime and making it difficult for them to escape the clutches of law.
In the previous post, we had shared information about What Is the Rowlatt Act? Understanding India’s Controversial Legislation, so read that post also.
Why Was the Fugitive Economic Offenders Act Passed in India?
The Government of India passed the Fugitive Economic Offenders Act in 2018 to address the issue of economic offenders evading legal proceedings by fleeing India. The Act aims to deter economic offenders from evading the process of law in India by confiscating their assets.
Confiscate Assets of Absconding Economic Offenders
The Act empowers authorities to confiscate properties of economic offenders who refuse to appear before the competent legal authority. The economic offenders can be declared as fugitive economic offenders if they fail to present themselves for criminal prosecution. The authorities can then attach and confiscate the property of economic offenders in India and abroad. This deters offenders from avoiding legal prosecution and fleeing the country.
Expedite Legal Proceedings
The Act aims to expedite legal proceedings against fugitive economic offenders. It establishes Special Courts to ensure timely conclusion of proceedings. The Special Courts are empowered to declare a person as a Fugitive Economic Offender and order confiscation of property. This speeds up the legal process against economic offenders evading prosecution.
Cooperation from Foreign Jurisdictions
The Act enables the Central Government to enter into reciprocal arrangements with other countries to enforce confiscation orders, recover penalties or enforce any other civil claim. This ensures cooperation from foreign jurisdictions in legal proceedings against fugitive economic offenders.
Protect the Financial System
By deterring economic offenders, the Fugitive Economic Offenders Act aims to protect the financial system and economy. It gives authorities more power to confiscate assets and take strict action against offenders, which helps strengthen the financial system. Overall, the Act was passed to address the limitations in existing laws in confiscating properties of economic offenders evading legal prosecution. It aims to bring such offenders to justice and protect public money.
Key Provisions of the Fugitive Economic Offenders Act
Attachment of Properties
The Fugitive Economic Offenders Act allows authorities to attach properties of economic offenders evading prosecution, including those of their family members. The Act empowers authorities to attach any property which they believe has been acquired through the proceeds of the crime. The attachment of properties will continue during the pendency of the proceedings related to the scheduled offence before a special court and shall continue during trial and pendency of appeal.
Declaration as Fugitive Economic Offender
The special court may declare a person as a fugitive economic offender if:
- An arrest warrant has been issued against him/her for any scheduled offence and he/she has left India to avoid criminal prosecution or refuses to return to India to face criminal prosecution.
- The scheduled offence involves an amount of at least Rs. 100 crore or more.
- The special court has reason to believe that the person has absconded or has left India to avoid criminal prosecution.
Once declared as a fugitive economic offender, properties attached can be confiscated by the government. The burden of proof for establishing that the attached property is not involved in money laundering or acquired through the proceeds of crime will be on the fugitive economic offender.
Disentitlement from Defending Civil Claims
The Act disentitles fugitive economic offenders from defending any civil claim. The special court may disallow any person declared as a fugitive economic offender from filing or defending any civil claim related to any property or asset. This provision will prevent economic offenders from frustrating proceedings against themselves by filing frivolous petitions and complaints.
The Fugitive Economic Offenders Act aims to curb economic offences like frauds, money laundering and tax evasion by fugitive economic offenders who flee the country to escape legal action. By disentitling them from defending civil claims and attaching their properties, the Act makes it difficult for them to enjoy the proceeds of crime. Overall, the Act enhances the effectiveness of other laws like the Prevention of Money Laundering Act in curbing economic offences.
Process for Declaring an Individual a Fugitive Economic Offender
As per the Fugitive Economic Offenders Act, 2018, the process to declare an individual as a fugitive economic offender is as follows:
Issue of Summons
Once an individual is identified as a fugitive economic offender, the prosecuting agencies issue a summons directing the individual to appear at a specified place and time. The summons outline the allegations and charges against the individual. Failure to appear in response to the summons can result in the individual being declared a fugitive economic offender.
Attachment of Property
If the summons remain unanswered, the prosecuting agencies may attach any property belonging to the fugitive economic offender or held on their behalf. This includes any assets acquired from the proceeds of the scheduled offense as well as any assets that may have been transferred to any person other than the fugitive economic offender.
Declaration as Fugitive Economic Offender
Upon attachment of property, the prosecuting agencies file an application before a Special Court seeking a declaration that the individual is a fugitive economic offender. The Special Court examines the application and considers any evidence submitted by the prosecuting agencies. If satisfied, the Special Court declares the individual as a fugitive economic offender within 6 months from the date of filing the application.
Disentitlement of Offender
Once declared a fugitive economic offender, the individual will be disentitled from defending any civil claim against their property. The fugitive economic offender’s property may also be confiscated and vested in the Central Government free from all encumbrances. Any appeals or revisions against the order can only be filed after the appearance of the fugitive economic offender.
In conclusion, the Fugitive Economic Offenders Act aims to address economic offences by disentitling fugitive economic offenders from defending their cases as well as vesting their properties in the Central Government. By systematically attaching the properties of such offenders, the Act seeks to deprive them of the fruits of the crime.
Powers of the Authorities Under the Fugitive Economic Offenders Act
As per the provisions under the Fugitive Economic Offenders Act, the authorities are vested with wide-ranging powers to attach and confiscate the proceeds of crime. ###Attachment of Property The authorities can provisionally attach any property of a fugitive economic offender for a period of 180 days. The attachment shall continue during investigation for an additional 180 days. The attachment may extend up to 365 days during the trial of the case.
Confiscation of Property
The Special Court, established under the Prevention of Money Laundering Act, 2002, is empowered to confiscate properties of fugitive economic offenders. Upon declaration as a fugitive economic offender by the Special Court, the confiscated properties will be vested with the Central Government, free from all encumbrances. The Act allows confiscation of both the proceeds of crime as well as any other property owned by the fugitive economic offender.
Disentitlement of Offender
The fugitive economic offender will be disentitled from defending any civil claim against such offender. Any company or limited liability partnership where the fugitive economic offender is a promoter, manager, or director will also be disentitled from defending any civil claim.
The wide-ranging powers granted to the authorities under the Fugitive Economic Offenders Act serve as an effective deterrent against economic offenders attempting to evade the process of law. The disentitlement provisions debar the offenders from stalling any proceedings through frivolous litigation. The attachment and confiscation of properties cripple the economic strength of such offenders.
The Fugitive Economic Offenders Act aims to provide a comprehensive legal framework to curb the menace of fugitive economic offenders evading the Indian legal system. The powers vested in the authorities contribute significantly towards achieving the objectives of the legislation.
Confiscation of Property Under the Fugitive Economic Offenders Act
The Fugitive Economic Offenders Act allows for the confiscation of properties of offenders who flee India to evade legal prosecution. Under the Act, the Enforcement Directorate can confiscate properties and assets of fugitives to recover losses caused by their criminal offence.
The Enforcement Directorate must file an application in a Special Court to declare an individual as a Fugitive Economic Offender. The Special Court will issue a notice to the fugitive to appear at a specified place within six weeks. If the fugitive fails to appear, the Special Court may declare the individual as a Fugitive Economic Offender.
Once declared as a Fugitive Economic Offender, the Enforcement Directorate can confiscate properties and assets owned by the fugitive or their spouse, including benami properties. The confiscated properties will then be vested with the central government. The government can dispose of the properties to recover losses caused by the offence. Relatives or associates of the fugitive who have knowingly received such properties as gifts may also face confiscation of their properties.
The Act aims to deter economic offenders from evading the legal consequences of their offences by fleeing from India. It deprives fugitives of their ill-gotten properties and assets, preventing them from enjoying the fruits of the offence. The confiscation of properties also allows the government to recover losses caused by the offence.
The Fugitive Economic Offenders Act complements other laws like the Prevention of Money Laundering Act that aim to curb economic offences and recover illegal proceeds. It is a strong measure to bring fugitives to justice and prevent economic offences. Overall, the Act deters potential offenders, deprives fugitives of their illegal gains, and recovers losses caused by the offence.
Challenges in Implementing the Fugitive Economic Offenders Act
The Fugitive Economic Offenders Act allows authorities to confiscate properties and assets of economic offenders who flee India to avoid facing prosecution. However, there are several difficulties in effectively implementing this legislation.
Implementing agencies have to trace and locate the absconding offenders, who often hide their foreign assets under layers of corporate veils across jurisdictions. Locating such concealed assets requires cooperation from foreign governments and agencies, which can be challenging to obtain. Another hurdle is that some countries do not recognize money laundering as an extraditable offense, and do not view tax evasion as a serious criminal offense.
Even after foreign assets are located, repatriating them to India is an arduous process. It requires navigating complex international laws and procedures around asset recovery and confiscation. Repatriation also depends on whether India has an extradition treaty with the country where the assets are located. If not, the only option left is lenghty civil litigation, which can span over years without any guarantee of success.
Domestically, limited expertise and resources in investigating economic offenses and tracing assets pose difficulties. The implementing agencies require experienced officers, access to foreign databases and cooperation from foreign counterparts. However, such capabilities and partnerships take time to develop.
The law also faces legal challenges to its constitutional validity and potential abuse. Strict safeguards and oversight are needed to avoid harassment of individuals or politically motivated misuse. The legislation needs to strike a balance between confiscating illegal assets and protecting civil liberties.
In summary, while the Fugitive Economic Offenders Act is a step in the right direction, realizing its objectives will require surmounting challenges around international cooperation, legal and operational capabilities, and possibility of misuse. With diligent and fair implementation, the law can effectively curb the menace of economic fugitives and send a strong message about India’s commitment to curb corruption and black money.
Famous Cases Under the Fugitive Economic Offenders Act
Vijay Mallya is perhaps the most well-known case under the Fugitive Economic Offenders Act. Mallya, once known as the “King of Good Times,” was the chairman of United Breweries Group, which owned Kingfisher Airlines. Kingfisher Airlines collapsed in 2012 under the weight of its debts, owing creditors over ₹9,000 crore. Mallya fled India in 2016 to avoid legal prosecution, settling in the UK.
In 2018, Mallya became the first person to be charged under the new Fugitive Economic Offenders Act. The Enforcement Directorate seized Mallya’s assets in India worth ₹9,990 crore. Mallya continues to fight extradition to India from the UK. His case highlighted the need for stronger laws to confiscate the assets of economic offenders who flee the country.
Another high-profile case was that of Nirav Modi, a luxury diamond jeweler. Modi allegedly defrauded Punjab National Bank of ₹14,000 crore through fraudulent loans and letters of undertaking. When the scam was discovered, Modi had already left India. Modi was located in the UK, where he was arrested and faces extradition to India. The Enforcement Directorate seized Modi’s assets worth ₹1,723 crore under the Fugitive Economic Offenders Act.
A more recent case was that of Jitendra Virwani, promoter of Embassy Group, who allegedly defrauded a consortium of banks of ₹2,000 crore. The CBI filed a case against Virwani under the Fugitive Economic Offenders Act in 2021. Virwani is believed to have fled to Dubai to avoid prosecution. The Enforcement Directorate has begun the process to attach Virwani’s Indian assets.
These high-profile cases highlighted how unscrupulous promoters were able to defraud Indian banks and investors of vast sums of money before escaping abroad. The Fugitive Economic Offenders Act provided legal provisions allowing the government to confiscate assets and properties of such economic offenders in India, even when they are absconding outside the country. This Act acts as an effective deterrent against such large-scale frauds.
Fugitive Economic Offenders Act FAQs
The Fugitive Economic Offenders Act allows authorities to confiscate properties of economic offenders who flee India to avoid facing prosecution. As an Indian citizen, it’s important to understand this law and how it may impact you.
The objective of this Act is to deter economic offenders from evading the process of law by fleeing the country. It aims to confiscate properties of such fugitive economic offenders to recover losses caused to banks and financial institutions.
A fugitive economic offender is any individual who has committed a scheduled offense involving an amount of 100 crore rupees or more and has fled India to avoid prosecution. Scheduled offenses refer to offenses under laws such as the Indian Penal Code, Prevention of Corruption Act, Customs Act, Companies Act, and Insolvency and Bankruptcy Code.
Once an individual is declared a fugitive economic offender, the following actions can be taken:
I) Confiscation of properties in India and abroad, including benami properties.
II) Disentitlement of the offender from defending any civil claim.
III) Appointment of an administrator to manage and dispose of confiscated properties.
The properties of a fugitive economic offender can be confiscated through a confiscation order passed by a Special Court designated under the Prevention of Money Laundering Act, 2002. The confiscation order is passed after considering an application by the Director appointed under the Act. Confiscated properties are vested in the Central Government free from all encumbrances.
The Fugitive Economic Offenders Act aims to strengthen the government’s resolve to eliminate corruption and black money from the economy. By understanding the provisions and objectives of this law, we can support the authorities in this mission. At the same time, we must be vigilant to prevent potential misuse, ensuring that principles of natural justice and human rights are upheld.
Conclusion
In conclusion, the Fugitive Economic Offenders Act is a strong step by the Indian government to deter economic offenders from evading the legal system. As citizens, we must support the authorities in identifying and prosecuting such individuals. Economic offenses erode taxpayer money and public trust in institutions. While the Act’s provisions may seem harsh to some, its aim is to prevent further harm and recover losses. We must have faith that checks and balances in our democracy will prevent overreach. With good faith efforts on all sides, the Act can restore confidence and integrity in the financial system. Stay engaged, know your rights, but also recognize that at times, extraordinary measures are needed for the greater good.
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