Introduction
The Fugitive Economic Offenders Act was passed in 2018 to prevent the economic offenders from escaping prosecution. It introduce new laws and addressing the issue of economic crimes. In India, there has been an increase in cases of economic offenders leaving the country. But the provisions in the existing laws were insufficient to deal with such offenders. Thus having an adverse effect on the economy.
The new Act defines ‘fugitive economic offender’ as a person against whom an arrest warrant in relation to a Scheduled Offence has been issued by any Court in India. Who has left India in order to avoid any criminal action that could have been taken against him. Or has left for a foreign country and refuses to return to face prosecution.
What are Economic Crimes?
Economic crimes are the crimes involving the unlawful conversion of the ownership of someone else’s property. Especially for personal use and benefit. Such crimes can be carried out by individuals, organizations, or even by groups. It include crimes like money laundering, excise frauds, loans, and mortgage fraud among other similar crimes. Economic crimes lead to significant damage to the economy and adversely affect its growth and development. On the international level, such crimes lower the confidence in the financial stability. Also credibility of the nation. And this impacts the global competitiveness as it makes the nation look unattractive to foreign as well as domestic investors. The passing of the Fugitive Economic Offenders Act has help in dealing with cases of economic crimes to a great extent.
Provisions under the Fugitive Economic Offenders Act
Declaration of fugitive economic offender-
A person is declare a fugitive economic offender if an arrest warrant issue for an offense for which the value involve. is more than 100 crores rupees and he leaves the country to escape prosecution. An application is to be file in a Special Court (as under the Prevention of Money-Laundering Act, 2002). For such declaration, containing details of the properties to be confiscated, along with the person’s whereabouts. Then, the person is require to appear at a specified place before the court. At least six weeks from the issue of notice and if he appears, proceedings will be terminate. If the person fails to appear in person or through his counsel, he may be declare as a fugitive economic offender.
Attachment of property of offender-
The Act provides for the attachment of the property of the offender, in India, or a foreign country by the Director or any other person assigned by him. But not someone below the rank of deputy director, after permission by a special court. All the rights of the confiscate properties vest with the Central Government. It can appoint an Administrator to manage the property and dispose of it after ninety days accordingly. The Act also includes Benami property which implies that it will apply to any property which is the subject matter of a Benami transaction. Including proceeds from any such property. Therefore, the power of attachment extends to Benami property as well and powers of search and seizure are also available for all such properties. The exemption is available for properties where the interest of certain persons may be involve like secured creditors.
Rights available to economic offender-
All rights are available to an economic offender in terms of letting him represent himself through a counsel, allowing him time to file the reply, a proper serving of summons to him, irrespective of his location. Whether in India or abroad and also right to appeal to the High Court have been provide. After the declaration of the person as a fugitive economic offender, he is prevent from filing or defending any civil claim before any court or tribunal in India.
Case Study
Vijay Mallya, an Indian businessman and former Member of Parliament, is the first person to be declare a fugitive economic offender under the Fugitive Economic Offenders Act. An application was file by the Enforcement Directorate in Mumbai before a special court. It is to declare Mallya a fugitive economic offender. He owes Indian banks a sum of approx. Rs. 9000 crores for the failed brand Kingfisher. The declaration made it possible for the government to confiscate his assets. And was able to sell some of his properties. Mallya had tries to challenge the plea because of which he was declare as a fugitive economic offender, but it was turn down.
Vijay Mallya had inherited UB Spirits, a Kingfisher beer brand, and turned it around into India’s biggest spirits maker. However, most other businesses were not as successful as UB Spirits, and Kingfisher Airlines became the biggest failure over time. It was start in 2005, but fail in 2012 after the debts began to increase rapidly. And continuing the business became impossible. Mallya fled from India in 2016, after which it became difficult to prosecute him or recover the amount, although the banks had moved the Debt Recovery Tribunal. Then in 2019, after the Fugitive Economic Offenders Act, it became possible to declare him an offender and speed up his extradition and money recovery process. He is accused of money laundering and fraud which are the emerging economic crimes in our country.
Conclusion
The Act was pass to keep in mind the prosecution of big economic offenders who start fleeing from the country to escape the legal process. The increase in economic crimes has left a huge impact on the banking industry. But the Act now ensures that economic offenders return to India and are subject to prosecution as per the law. There have been several cases of offenders escaping the jurisdiction of Indian courts. Either before the commencement of any proceedings against them or during the pendency of proceedings. Such instances hamper the investigation process, waste time of courts, and thus compromise with the law. Therefore, such economic offenders needs to be prevent from escaping prosecution with effective laws.
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