In a bid to bring back defaulters of huge bank loans who escape the country, the Union Cabinet on Saturday approved an ordinance that would provide for attachment and confiscation of the properties of the economic offenders.
The decision to issue The Fugitive Economic Offenders Ordinance, 2018 was taken at a meeting of the Cabinet presided over by Prime Minister Narendra Modi on Saturday. It comes in the wake of the recent multi-crore Punjab National Bank fraud case, in which the main accused diamond trader Nirav Modi and his uncle Mehul Choksi fled the country after duping the bank, reportedly to the tune of over ₹30,000 crore.
Some other similar offenders, including businessman Vijay Mallya, who headed the now-defunct Kingfisher Airlines, also escaped to London a few years after running up huge debts to consortiums of banks.
Sources said the Ordinance aims at deterring economic offenders from evading the process of Indian law by remaining outside the jurisdiction of Indian courts. 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.
However, if at any point of time in the course of the proceeding prior to the declaration, the alleged fugitive economic offender returns to India and submits to the appropriate jurisdictional court, proceedings under the proposed Act would cease by law.
"All necessary constitutional safeguards in terms of providing hearing to the person through counsel, allowing him time to file a reply, serving notice of summons to him, whether in India or abroad and appeal to the High Court have been provided for," the sources said. They added that 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 ₹100 crore or more, no additional expenditure is expected on the enactment of the Ordinance.
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