Its passage into law is now being expedited as part of the government’s response to the PNB scam, as per sources.The Bill seeks to deter economic offenders from evading the process of Indian law by fleeing the country.It was drafted in pursuance of Finance Minister Arun Jaitley’s 2017-18 Budget speech promising legislative changes or even new law to confiscate the assets of such fugitives. The Finance Ministry had prepared the draft Cabinet note on the bill and sought the law ministry’s opinion on it.
The Bill defines fugitive economic offender as any individual against whom warrant for arrest in relation to economic offence has been issued and person has left the country and refuses to return to India to face criminal prosecution.The burden of proof for establishing that an individual is fugitive economic offender will be on authorities.The proposed bill will be applicable in cases where the value of offences is over Rs 100 crore.
It will allow Financial Intelligence Unit (FIU), the premier technical snoop wing under the finance ministry, to file an application for declaration of fugitive economic offender for confiscation of their assets.The bill entrusts responsibility to try such cases to the courts under Prevention of Money Laundering Act, 2002 (PMLA).It also has a provision for appointment of an administrator to dispose-off offender's property to pay the creditors.
Besides, it has provisions to override provisions of other existing laws.Once voted into law the new legislation will empower investigating agencies to confiscate, and vest with themselves, any property of the absconding offenders without encumbrances.Also, at the discretion of any Court, such person or any company where the absconder is a promoter or key managerial personnel or majority shareholder, may be “disentitled” from bringing forward or defending any civil claim.
The proposed law comes in the backdrop of the alleged Rs 11,400 crore defrauding of Punjab National Bank (PNB)—India’s second largest public sector bank—by diamond merchants Nirav Modi and Mehul Choksi.Both Modi and Choksi have left the country and are believed to be somewhere in Europe. They have joined a growing list of economic offenders including liquor baron Vijay Mallya who is facing charges of bank loan defaults worth an estimated Rs 9,000 crore.The Bill’s provision is compatible with the provisions of United Nations Convention against Corruption (ratified by India in 2011) that recommends “non-conviction-based asset confiscation for corruption-related cases”.(UNI)