The Fugitive Economic Offenders Bill (FEOB) 2018

 

Context:

The Fugitive Economic Offenders Bill (FEOB) 2018 was cleared at the ongoing monsoon session of Parliament. It is a comprehensive legislation aimed at deterring fugitive economic offenders from evading the process of law in India, and for preserving the sanctity of rule of law. This is a significant initiative by the government towards preserving and promoting transparency, openness and accountability in the Indian economy.

Features of the Bill:

 

FEOB, among other things, provides for the declaration of an individual as a fugitive economic offender and the consequent confiscation and disposal of his properties.

Authorities are also empowered to attach his properties during the pendency of proceedings. Action may be taken against properties that are proceeds of crime, as well as other owned or benami properties, irrespective of whether they are situated in India or abroad.

The Bill also empowers the authorities to carry out survey, search of places and persons and seizure of records, property and proceeds of crime.

The Bill was deemed necessary because the existing laws were inadequate to effectively and expeditiously deal with the non-performing assets (NPAs) crisis.

 

Several persons who have borrowed huge sums of money, from both public sector and private banks, have become wilful defaulters and moved abroad to evade prosecution in India. The absence of such offenders from Indian courts has several detrimental consequences, which include unnecessary hurdles and inordinate delays in the investigation and judicial process. It also adversely affects the recovery process of banks and financial institutions.

FEOB allows for an individual to be declared a fugitive economic offender if an arrest warrant has been issued against him for any scheduled offences where the value involved is over Rs 100 crore, and he has left the country and refuses to return to face prosecution. This monetary threshold ensures that cases involving huge amounts of money are fast-tracked by the special court. Any case that falls below the threshold will still be adjudicated by ordinary criminal courts under existing criminal laws.

Before conducting survey, search or seizure, the authorities have to record their reasons in writing and their decisions are solely based on the material on record. Therefore, there is no scope for abuse of power by any authority. Once an individual is declared a fugitive economic offender, his properties may be confiscated and disposed of within 90 days.

India being a signatory to the UN Convention Against Corruption is authorised to adopt such a measure, since the convention itself provides for the permanent deprivation of assets when conviction is not possible due to the offender absconding. The confiscation and liquidation of assets is necessary to preserve the financial health of banks and to ensure that they do not have to go through unnecessary delay and hurdles to recover their dues. Further, assets may only be disposed of to the extent of the dues to be recovered. Hence, there is no scope for arbitrary action.

Upon declaration as a fugitive economic offender, he or any company associated with him may also be barred from filing or defending civil claims. Such measures are necessary to pressurise the person into returning to India and facing prosecution in Indian courts. It is also pertinent to note that the bar on civil claims is not absolute. The bar will be lifted as soon as the fugitive economic offender returns to India to face prosecution. So, there is no denial of right to access justice or right to life under Article 21.

The Bill also ensures that all procedures are carried out according to due process. Authorities have to state in the application the reasons for believing that an individual is a fugitive economic offender. The Special Court then applies its wisdom before declaring him as such. Sufficient notice and opportunity to reply are granted to the individual as well as persons interested in his properties to be confiscated. Proceedings are promptly dropped if the fugitive economic offender enters appearance and certain properties may be exempted from confiscation where other persons have legitimate interests in them. 

Conclusion:

Thus, FEOB lays down an effective mechanism for ensuring that the crooks who siphon off money from Indian coffers are penalised and put behind bars. This is a ground-breaking legislation that has the potential to transform the Indian economic landscape in the years to come.