Government tables bill to impound, sell assets of fugitive fraudsters

The government on Monday tabled a bill that seeks to confiscate all the assets of absconding fraudsters and loan defaulters for recovering dues from them.

The Fugitive Economic Offenders Bill 2018 aims to impound and sell assets of fugitives such as Nirav Modi, who is alleged to be behind the nearly Rs 127 billion fraud at Punjab National Bank.

The law will apply to defaulters who have an outstanding of Rs 1 billion or more and have escaped from the country.

The Bill tabled in the Lok Sabha provides for "measures to deter fugitive economic offenders from evading the process of law in India by staying outside the jurisdiction of Indian courts, to preserve the sanctity of the rule of law in India and for matters connected therewith or incidental thereto".

As per the statement of objects and reasons of the Bill, there have been several instances of economic offenders fleeing the jurisdiction of Indian courts anticipating the commencement of criminal proceedings or sometimes during the pendency of such proceedings.

"The absence of such offenders from Indian courts has several deleterious consequences, such as, it obstructs investigation in criminal cases, it wastes precious time of courts and it undermines the rule of law in India," it said.

It further said that most of such cases of economic offences involve non-repayment of bank loans thereby worsening the financial health of the banking sector in India.

The existing civil and criminal provisions in law are inadequate to deal with the severity of the problem, it said.

"In order to address the said problem and lay down measures to deter economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts, it is proposed to enact a legislation, namely, the Fugitive Economic Offenders Bill, 2018 to ensure that fugitive economic offenders return to India to face the action in accordance with law," it said.

As per the proposed Bill, the fugitive economic offender is defined as an individual who has committed a scheduled offence involving Rs 1 billion or above and absconded from India or refused to come back to avoid or face criminal prosecution.

In such cases, the law proposes to enable authorities to attach the property of fugitive economic offenders and proceeds of crime, and place the burden of proof for establishing that an individual is a fugitive economic offender on the Director or the person authorised by the Director.

It enshrines powers of Director relating to survey, search and seizure and search of persons.

It also gives power for confiscation of the property of a offender and proceeds of crime and disentitlement of the person from putting forward or defending any civil claim.

The proposed law is different from the Prevention of Money Laundering Act, which also provides for confiscation of assets of economic offenders.

Under PMLA, only profit of crime is confiscated and that too upon conviction. The new law extends to all assets irrespective of whether it is acquired as a result of crime or not. This is triggered by the offender being a fugitive.