Cabinet approves ordinance to crack down on fugitive economic offenders like Nirav Modi

The Union Cabinet has approved the promulgation of Fugitive Economic Offenders Ordinance which would have measures to attach and confiscate proceeds of crime associated with economic offenders like Nirav Modi and deter them from evading the process of Indian law by fleeing the country.

The Ordinance is expected to re-establish the rule of law which would force such offenders to return to India to face trial. This would also help the banks and other financial institutions to achieve higher recovery from financial defaults.

It is expected that a special forum to be created for the 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.

The Ordinance makes provisions for a Court ('Special Court' under the Prevention of Money-laundering Act, 2002) to declare a person as a Fugitive Economic Offender. A Fugitive Economic Offender is a person against whom an arrest warrant has been issued in respect of a scheduled offence and who has left India so as to avoid criminal prosecution, or being abroad, refuses to return to India to face criminal prosecution.

In order to ensure that Courts are not over-burdened with such cases, only those cases where the total value involved in such offences is 100 crore rupees or more, is within the purview of this Ordinance.

Since the approved law would utilise the existing infrastructure of the Special Courts constituted under the Prevention of Money-laundering Act, 2002 and the threshold of scheduled offence is high at Rs. 100 crore or more, no additional expenditure is expected on the enactment of the Ordinance.

Background

There have been instances of economic offenders such as Nirav Modi and Vijay Mallya fleeing the country to fend off criminal proceedings. The existing civil and criminal provisions in thelaw are not entirely adequate to deal with the severity of the problem.

The Fugitive Economic Offenders Bill, 2018 was introduced in Lok Sabha on the 12th March, 2018 and was listed for consideration and passing in Lok Sabha on many occasions after its introduction. The Lok Sabha has since been adjourned sine die and both the Houses of Parliament were prorogued on 6th April, 2018.