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The Indian law ministry gave its endorsement to a legislative proposal that will empower the government to seize property of economic offenders and defaulters who attempt to escape from the country, albeit with a new provision.
The law ministry seeks the insertion of a "Saving Clause" in the Fugitive Economic Offenders Bill 2017 before it is submitted for deliberations in the upcoming winter session of Parliament. This clause will provide for certain exceptions, one of which is that the enactment of the new law will respect vested rights, or those existing rights already protected by prior economic laws.
The draft bill will be applicable in cases where the value subject matter of the offenses exceeds Rs 100 crore.
The legislative proposal was drafted following the sponsor speech delivered by Finance Minister Arun Jaitley regarding the 2017-2018 budget, as he promised the enactment of a new law that will empower the government to freeze assets of economic fugitives and order its forfeiture.
Under the draft proposal, a “fugitive economic offender” means any individual against whom a warrant for arrest in relation to an economic offense has been issued and the person has left the country and refuses to return to India to face criminal prosecution.
In India’s current legal system, the laws by which economic offenders can be prosecuted include the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (SARFESI), Recovery of Debts Due to Banks and Financial Institutions Act (RDDBFI), and the Insolvency and Bankruptcy Code (IBC).
The law ministry also observed the existence of provisions that will still promote the constitutional rights of an alleged offender, such as the provisions on a hearing granted to the alleged offender with the assistance of a counsel of his own choice, service of summons to him, and a remedy to appeal a court judgment to the High Court.Also, the bill provides for the appointment of an administrator to dispose of the assets for purposes of satisfying amounts due to the creditors.
Recently, there have been instances where big-time offenders, including economic offenders, were able to escape the country after having successfully perpetrated economic fraud in some government and financial institutions.Vijay Mallya, the 61-year-old chairperson of the defunct Kingfisher Airlines, owes over Rs 9,000 crore to various Indian financial institutions.He escaped from India after his fraudulent activities were discovered by the authorities.