Showing urgency in dealing with absconding loan defaulters, the government has come out with a series of rules to operationalise the fugitive economic offenders law, for which an ordinance was promulgated by the President last week.
The Fugitive Economic Offenders Ordinance 2018 is aimed at deterring economic offenders from evading the process of law by remaining outside the jurisdiction of Indian courts.
The law seeks to expedite recovery of losses incurred by banks and other entities by confiscating their properties.
The fugitive economic offenders law comes in the backdrop of alleged fraudsters like Nirav Modi running away from the country after cheating Punjab National Bank to the tune of about $2 billion.
The notifications regarding rules, issued by the finance ministry, spell out the process for declaration of fugitive economic offender, issuance of attachment order, and management of confiscated properties, among others.
As per one of the notifications, only officers of the rank of Assistant Directors or above in the Enforcement Directorate could exercise the power to search and seize record/property which may be useful for proceedings under the fugitive law.
Special Directors of Enforcement of ED's regional offices will function as administrator of confiscated properties, said another notification.
On management of confiscated property, the rules said that the administrator will arrange for the proper maintenance and custody of the immovable properties.
In case, the property confiscated consists of cash, government or other securities, bullion, jewellery or other valuables, the administrator would deposit them for safe custody in the nearest government treasury or a branch of the RBI or SBI or any authorised bank.
The ordinance, which got nod of the President on April 21, makes provisions for 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," said a finance ministry statement.
However, only cases of frauds, cheque dishonour or loan default of over Rs.200 crore will come under this ordinance.
The government expects the new law will help the banks and other financial institutions to achieve higher recovery from financial defaults committed by fugitive economic offenders, improving the financial health of such institutions.