(GIST OF YOJANA) Targeting Economic Offenders [JULY-2018]

(GIST OF YOJANA) Targeting Economic Offenders

[JULY-2018]

Targeting Economic Offenders

The he present economic scenario worldwide is volatile. Coupled with this, our country has thrown open our doors to globaliasation, hence the tremors was, to an extent, cushioned from the tumult that rocked economies the world over. After liberalization we too felt the ripples. Indian businesses have grown, they have spread their wings all over the world and the fund their expansion many have gone to the banks for capital. The erstwhile conservative banks too have given loans to their clients in good faith in expectation of growth. Unfortunately they are now feelings the pinch in many ways.

The government felt that despite the existence of the Indian Penal Code, Prevention of Corruption Act and Prevention of Money Laundering Act, a specific act targeting economic offenders is the need of the hour. Hence, the government announced in the Budget that a specific law targeting fugitive economic offenders was soon to be brought about which would give government powers to sieze properties and appropriate the sale proceeds toward the loan creditors. After Punjab National Bank was hit by the fraud the Union Cabinet immediately approved the bill to deliver a death knell on financial fraudsters and to further boost the confidence of the investors and bank customers in the banking system.

Rationale and Preamble

Due to business deals going awry and inability of the customers to service their loans in time the banking sector has been impacted. Many of these defaulting fraudsters flee the country when they see the writing on the wall. Rather than face the music, these high net worth, big spending businessmen cleverly leave the Indian shores anticipating punitive action before the law enforcing authorities and regulators get after them. The sums of money owed by them, the debts, non payment of overheads may run in to crores of rupees.

The country’s banks, the investigating agencies, the prosecuting agencies all have been taken for a ride by these unscrupulous people who have stashed away their ill gotten wealth in various entities abroad, various assets and bank accounts and who live a merry life of luxury in the comfort of foreign shores away from our country’s jurisdiction. The existing civil and criminal provisions of law are not entirely adequate to deal with these severe problems that have a critical impact on the economy. Tough and stringent measures are taken by confiscation of their ill gotten accumulated assets these absconders will go scot free. Further, this legislation will prove to be a deterrent to those contemplating to take steps to flee to some other country and abscond alter committing economic white collar crimes. Non conviction based asset confiscation for corruption related cases are enabled under provisions of the United Nations Convention. This Bill deals specifically with economic offenders who are fugitives from the law of the land and have escaped before the commencement or during the course of proceedings before criminal and civil courts.

The Fugitive Economic Offenders Bill 2018 was introduced in the Lok Sabha on 12th March, 2018. The preamble of the Bill clearly says “To provide 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 India and for matters connected therewith or incidental thereto.

The Bill

This Bill brings under purview those cases where the total value of the economic offences is Rs. 100 crores or more. This bill is expected to reestablish the rule of law with respect to absconding fugitive economic offenders who will be forced to return to India and face trial for their offences. The Bill allows for attachment of the properties of the fugitive economic offender. This will go a long way to help banks and other financial institutions to achieve recovery from the absconding defaulter.

Powers of the Director

The Director or any other officer authorised by him will have the powers vested in a Civil Court. He can, on the basis of material in his possession and has reason to believe (the reasons of such belief must be recorded in writing) that an individual may be a fugitive economic offender, he may enter any place within the limits of the area; assigned to him or in respect of which he is authorised by any other authority who has jurisdiction of the area.

On entering any such place he may request the proprietor, employee or any other person who may be present there at that time to afford him necessary facility to inspect the records, afford him necessary facility to check or verify the proceeds of crime or any transaction related thereto and request them to furnish necessary information which may be relevant to the proceedings
The Director or other authorised officer acting under this section may place marks of identification on the records inspected, make or cause to be made extracts or copies there from; make an inventory of property checked or verified by him and record any statement of any person present at the property.

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Declaration as Fugitive Economic Offender

After hearing the application the Special Court may declare an individual as a fugitive economic offender. It may confiscate his properties which are proceeds of crime/benami properties in India or abroad or any other property in India or abroad. Upon confiscation all rights and titles of the property will vest in the Central government free from all encumbrances. .

Administrator

Under Section 15 of the Act the Central Government may appoint as many of its officers (not below the rank of Joint Secretary to the Government of India) to perform the functions of an Administrator. The Administrator so appointed shall receive and manage the property in relation to which the order has been made. He shall take such measures as the Central Government may direct to dispose of the property vested in the Central Government. Provided that the Central Government or administrator shall not dispose of any property for a period of 90 days from date of order.

Appeal

An appeal against the order of the Special Court shall lie before the High Court. The Appeal must be preferred within a period of 30 days from date of judgement. The High Court may entertain an appeal after the expiry of the said 30 days if they are satisfied that the appellant had sufficient cause for not preferring the appeal within the due "date. No appeal shall be entertained by the High Court after the expiry of 90 days from date of judgment.

Conclusion

It is hoped that the Bill will help the Central Government recover the properties of those high net worth individuals who have fled from the country to avoid prosecution and other legal proceedings after committing economic frauds. The Exchequer will be bolstered after recovery from the sale proceeds. It is also expected to ac s a deterrent to those who are contemplating or who are in the brink of committing economic offences and evading law.

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