FUGITIVE OFFENDERS ACT WON’T HELP BANKS
02, Apr 2019
Prelims level : Economics/ Polity and Governance Mains level : GS II - Important aspects of governance, transparency and accountability, e- governance- applications.
Why in News:
- Liquor baron Vijay Mallya’s lawyer reiterated before the Bombay High Court that the Fugitive Economic Offenders Act (FEOA) was a draconian law that wouldn’t help the creditors.
Who is a fugitive Offender?
A fugitive economic offender is a person against whom an arrest warrant has been issued for committing offence like:
counterfeiting government stamps or currency, cheque dishonour for insufficiency of funds money laundering
transactions defrauding creditors
A fugitive economic offender is one who has left the country to avoid facing prosecution, or refuses to return to face prosecution.
What comes under Economic offences?
Offences under the following Acts:
- Negotiable Instruments Act,
- Reserve Bank of India Act, 1934.
- Central Excise Act,
- Customs Act,
- Prohibition of Benami Property Transactions Act,
- Prevention of Money Laundering Act,
- Indian Penal
Fugitive offenders act 2018:
- The act aims to curb the practice of evading the criminal prosecution by the economic offenders who flee from the country to stay out of the jurisdiction of Indian courts.
- The act will give the right to the government to confiscate the property of such economic offenders in India and abroad. The act will also be applicable on the proxy-owned properties of the economic offenders. The act defines the economic offenders as those against whom a legal warrant has been issued, but they refuse to adhere to the summons of the legal authorities.
- The law balances itself with a provision that allows the accused to file an appeal in the High Court to state their case. The act keeps the banks and other financial institutions at the Centre and seeks to help them recover the amount. The act will only be used for economic offences over Rs 100 crores. The act makes provisions for a Court (‘Special Court’ under the Prevention of Money-laundering Act, 2002) to declare a person as a Fugitive Economic Offender.
Significance of the act
- There have been several instances of economic offenders fleeing the jurisdiction of Indian courts, anticipating the commencement, or during the pendency, of criminal proceedings.
- The absence of such offenders from Indian courts has several deleterious consequences— first, it hampers investigation in criminal cases; second, it wastes precious time of courts of law; third, it undermines the rule of law in India.
- The act is expected to re-establish the rule of law with respect to the fugitive economic offenders as they would be forced to return to India to face trial for scheduled offences.
- This would also help the banks and other financial institutions to achieve higher recovery from financial defaults committed by such fugitive economic offenders, improving the financial health of such institutions.
- It is expected that the special forum to be created for expeditious confiscation of the proceeds of crime, in India or abroad, would coerce the fugitive to return to India to submit to the jurisdiction of Courts in India to face the law in respect of scheduled offences.